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IRS Waives Diesel Fuel Penalty in 12 States and D.C.

MAY 13, 2021

IR-2021-108

DATED MAY 13, 2021
DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2021-19584
  • Tax Analysts Electronic Citation
    2021 TNTF 93-39
    2021 TPR 20-15
Citations: IR-2021-108

IRS grants dyed diesel fuel penalty relief due to disruptions of the fuel supply chain

May 13, 2021

WASHINGTON — The Internal Revenue Service, in response to disruptions of the fuel supply chain, will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the States of Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia.

This relief is retroactive to May 7, 2021, and will remain in effect through May 21, 2021.

This penalty relief is available to any person that sells or uses dyed diesel fuel for highway use. In the case of the operator of the vehicle in which the dyed diesel fuel is used, the relief is available only if the operator or the person selling such fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use.

The IRS will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510, Excise Taxes, 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, for home heating use, and to local governments.

The IRS is closely monitoring the situation and will provide additional relief as needed.

DOCUMENT ATTRIBUTES
  • Institutional Authors
    Internal Revenue Service
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2021-19584
  • Tax Analysts Electronic Citation
    2021 TNTF 93-39
    2021 TPR 20-15
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