IRS waves Red Diesel penalties till 9/15/05!!!

[JFirebaugh]

Hi all,



Here is the text of the IRS website as of Friday Sept 2nd on using Red Diesel in your truck. Perhaps this will help some in the affected areas! Pay the tax of $24. 4 cents per gal. and they won't fine you! It's too bad they won't also forget the tax too!



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IRS Waives Diesel Fuel Penalty Due to Hurricane Katrina



The IRS link: http://www.irs.gov/newsroom/article/0,,id=147221,00.html



IRS-2005-89, Sept. 2, 2005

WASHINGTON — 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 August 25, 2005, in Florida, August 30, 2005, in Alabama, Louisiana, and Mississippi, and August 31, 2005, in the rest of the United States, and will remain in effect through September 15, 2005.



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.

 

[SRadke]

OK but... . how do you get this red dye out of your fuel system after the tax has been reinstated? A little red goes a long way.



-Scott

 

[Kissfan113]

I agree with Scott, how do you get the red out, seems like a steep slippery slope with sharp rocks at the bottom. The red will stay in the truck after the reenstatement of the penalties and then we get tested and fined. Not to look a gift horse in the mouth or anything and i probably will take full advantage on this but ...

 

[DIESELMAN]

OK, I've read this twice, WTF???



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.



... . So you can get relief from the tax penalties on using fuel that is normally not taxed as long as a person whom you have no relationship to pays the tax on that fuel that isn't taxed even if they don't deposit that tax, as long as you pay that tax which results in the same price because you or that person you don't know payed that tax even if they didn't report that tax was paid???



Yep, this sounds like the IRS to me!

 

[BigEasy]

OK but... . how do you get this red dye out of your fuel system after the tax has been reinstated? A little red goes a long way.

It isn't near as sensitive as you think... we haul red fuel in a tanker, then put clear in it on the next load. Did it all the time over the last 6 years while I was hauling fuel.

 

[BigEasy]

... . So you can get relief from the tax penalties on using fuel that is normally not taxed as long as a person whom you have no relationship to pays the tax on that fuel that isn't taxed even if they don't deposit that tax, as long as you pay that tax which results in the same price because you or that person you don't know payed that tax even if they didn't report that tax was paid???



Yep, this sounds like the IRS to me!

They're not repealing the tax, they're allowing us to run Red, to keep from having shortages... that's all.

 

[DIESELMAN]

They're not repealing the tax, they're allowing us to run Red, to keep from having shortages... that's all.

AND... . Reserving the right to penalize you anyway if you use fuel that the tax wasn't paid on, you the purchaser, not necessarily just the retailer. The retailer can charge you the tax, pocket the tax, not file the report, and watch you get fined when he gets caught for not paying the tax at a later date. - Selective Enforcement - yeah, I trust the IRS.

 

[BDanner]

Just use the stained fuel excuse through the year.



"Officer Barney, I only drive the truck a few miles a month. "



In my area only the CDL driver get stopped for inspections. Weight, brakes, licenses and permits checked.



The locals publish the results of these stops in the local journal with chest thumping victory as politicians do to validate their worth and show us how they have protected you from yourself!



Bruce

 

[BigEasy]

In six years of driving all over the lower 48, the only places I've ever seen tanks dipped were NJ and VA...

 

[HeavyHauler]

OK, I think I finally understand this situation, but what would keep someone from not reporting how much red fuel they purchased and not paying the 24. 4 cent/gallon tax? I've never bought any off-road fuel so I don't know how it works. Do you have to fill out a form at the station or something or is this just on the honor system?



If you didn't ultimately pay the tax, how would the IRS find out that you ever bought any red fuel?

 

[Steve St.Laurent]

If someone dipped your tank and then they checked and you hadn't filed the proper report with the tax paid.

 

[2broke2smoke]

In six years of driving all over the lower 48, the only places I've ever seen tanks dipped were NJ and VA...

You don't drive in WV much then ...



i've had three friends get checked and they have set up road blocks at the local stock yards in Buckhannon WV for the last 2 years and dipped EVERY diesel truck that went out

 

[BigEasy]

You're right... I didn't haul thru WV too much.

 

[DIESELMAN]

If someone dipped your tank and then they checked and you hadn't filed the proper report with the tax paid.

It says that any reseller may sell red without recourse, or telling you.



I am just being lawyerly here, specifically vague in a very precise manner, it says that if the operator OR reseller paid the tax, I didn't check if Shell paid their tax the last time I bought fuel, did you? It gives resellers the right to put and sell red fuel without notifying operators, commercial or otherwise, who purchase fuel from them, and gives a vague pass on tax fine liability while reserving the right to fine anyone later for not paying the tax.



I know they have the best of intentions, and that no one is going to be fined for red anytime soon, I just think the text of the rule and finding is typical of seminar educated buearucrats in government.