http://www.irs.gov/newsroom/article/...147221,00.html

MikeyB

 

I figured I'd just post it here:

IRS Waives Diesel Fuel Penalty Due to Hurricane Katrina

IR-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.

 

What they are saying is there will be no penalty for using red but that it will be sold with the taxes added on. No advantage to go out and buy red fuel.

 

The only thing it does is help keep fuel from becoming hard to find. Around here in the midwest red fuel is very comon due to all the farmers. Now if road fuel was to become scarse we could fill up with red fuel and not be sitting along side the road. The only real problem i see is that the red fuel is residual in the fuel system and it will keep recontaminating the road fuel for a very long time after you stop running it. It getts in your filters and then realeased and returned back to the tank contaminating road fuel. It takes several tanks and a few filter changes to get out. If they pull you over after the penaltys are reaplied and test you will they give you a ticket then for having the stuff in your tank? Even residual contamination will show on there test espesalie if they use the sniffer.

 

My understanding was that last year after the same laws rules were enacted after the Florida hurricanes was that residue red enforcement was lax. All it takes is a simple lab test that determines the percentage red in the tank and gets run with every red dipped tank to get you off the hook.

 

Save your fuel receipts if there are any questions.

MikeyB