IRS Waives Diesel Fuel Penalty Due to Hurricane Katrina
IR-2005-89, Sept. 2, 2005
The Internal Revenue Service, in response to shortages of clear diesel fuel
caused by Hurricane Katrina, will not impose a tax penalty when dyed diesel fuel
is sold for use or used on the highway.
This relief applies beginning
This penalty relief is available to any person that sells or uses dyed fuel
for highway use. In the case of the operator of the vehicle in which the dyed
fuel is used, the relief is available only if the operator or the person selling
the fuel pays the tax of 24.4 cents per gallon. The IRS will not impose
penalties for failure to make semimonthly deposits of this tax. IRS Publication
510, Excise Taxes for 2005, has information on the proper method for reporting
and paying the tax.
Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt
from excise tax, such as to farmers for farming purposes and to local
governments for buses.
Finally, the Internal Revenue Service will not impose the recently enacted
tax penalty on a failure to meet the requirements of EPA highway diesel fuel
sulfur content regulations if EPA has waived those requirements.