Seems like their are a lot of myths floating around about $10,000 fines etc. I decided to look around. The federally mandated fine is $1000 or $10 per gallon of tank capacity, whichever is higher. So you could get a $10,000 fine only if you have a 100 gallon tank. Looking around it seems like some states have a higher fine though none were over $2500 or $10 per gallon. Nevada was $1000 or 27¢ per gallon, go figure. Some states had a straight $2500 fine with no per gallon charge.
September 15, 2002 (Washington, DC)
U. S. DOT PUSHES STATES TO TEST FUEL IN TRUCK POWER UNITS:
The U. S. DOT is providing money to state transportation enforcement officials to test commercial motor vehicle power units for illegal use of non-taxable dyed diesel fuel. Dyed diesel fuel is marked with a red dye and is designated by both state and federal laws for use in off road vehicles only. The IRS has determined that power units on commercial motor vehicles do not qualify as a non-taxable use. This is true for petroleum cargo tanks with a power units regardless of whether the power unit has a separate fuel tank or relies on fuel from the cargo tank lading itself. Under IRS regulations, a power unit attached to any vehicle capable of being registered for on-road use must use clear, taxable diesel fuel. According to the IRS, it does not matter if the vehicle is used in an off road setting. If the vehicle with the power unit is designed for on-road use, then clear taxable diesel fuel must be used at all times The DOT said random roadside testing will be conducted throughout the country. A special federally funded pilot project is currently underway in Georgia. The visual test takes approximately 60 seconds to administer and involves inserting a small glass pipe in the fuel tank of the power unit. The glass pipe is designed to extract several millimeters of fuel to be observed visually by the enforcement officer for evidence of red dye. If red dye is found, a larger sample will be taken and sent to the IRS as evidence. The enforcement officer will not fine or ticket the driver for any fuel violations at the time of the inspection. The IRS will notify the driver of the fine at a later date. The standard fine is $1000 or $10 per gallon of tank capacity whichever is higher.