Dyed Fuel and IRS Inspections

[Retro]

I'm sure this has been covered here before but I thought I would pass info on again just to remind folks to be careful. In our area of the Pacific Northwest an IRS agent has taken it upon himself to make up the federal deficit with increased farm inspections. This agent is taking a very strict interpretation of the dyed fuel rules and is asserting there can be no dyed fuel in any vehicle used on a public road. That includes FARM EXEMPT vehicles in Washington State. He's claiming farmers now have to buy non-dyed fuel for any piece of farm equipment that may access a public road and submit an application for a road tax refund from both the State and Feds for the portion of fuel used off-road.

I've attached some IRS documents so you can determine your own level of risk. Hopefully you have inspectors in your area that are a little more sensible when it comes to tractors, combines, etc, getting from the farm to a field or from field to field.

Good luck out there!

 

[zmoz]

Sounds like somebody needs to take that guy to court. I don't know what the law is in WA but in Oregon that's a load of BS, he would simply be outright wrong 100%, and inspectors aren't allowed to make up their own rules.

If he's trying to enforce things that aren't laws then go over his head. He has to prove you guilty, not the other way around.

 

[thatguy]

I believe that its a EPA rule that you cant run dyed fuel in a "highway vehicle" The fine is like $10,000 if caught (but im not sure if its enforced).. The exemption to this is for vehicles that are oversize/overweight such as cranes (defined in the attachment on page 2, #1 "specifically designed mobile machinery...")

I know here in VA you can't run a 'farm use' pickup/truck on dyed fuel, but you can farm equipment (tractors, combines, etc)..

brian

 

[daman1]

Yep here in MI NO red in any OTR vehicles.

 

[LBrown59]

Yep here in MI NO red in any OTR vehicles.

Are you talking about OTR = On The Road
or are you talking about OTR = Off The Road?

1*I believe that its an EPA rule that you cant run dyed
fuel in a "highway vehicle"

2*The exemption to this is for vehicles that are oversize/overweight such as cranes (defined in the attachment on page 2, #1 "specifically designed mobile machinery...")

3*I know here in VA you can't run a 'farm use' pickup/truck on dyed fuel, but you can farm equipment (tractors, combines, etc)..

brian

1*You can run dyed fuel in any vehicle if you keep it off the highways. The issue is where a vehicle is used not what it is used for nor who uses it or who owns it.
Also this is not a state or IRS income tax matter nor is it an EPA issue.
It is only a highway tax situation .

2* see 1
3* see 1

 

[daman1]

ANY vehicle driven on the public roads, that includes,P/U trucks,big trucks,cars.

 

[FlaDon]

Are you talking about OTR = On The Road
or are you talking about OTR = Off The Road?


1*You can run dyed fuel in any vehicle if you keep it off the highways. The issue is where a vehicle is used not what it is used for nor who uses it or who owns it.
Also this is not a state or IRS income tax matter nor is it an EPA issue.
It is only a highway tax situation .

2* see 1
3* see 1

Actually, it's worse than that. It is a transportation tax. Applies to railroads too.

 

[RickB]

Sounds like somebody needs to take that guy to court. I don't know what the law is in WA but in Oregon that's a load of BS, he would simply be outright wrong 100%, and inspectors aren't allowed to make up their own rules.

If he's trying to enforce things that aren't laws then go over his head. He has to prove you guilty, not the other way around.

You guys need to bone up on FEDERAL law before you start spouting off here.

 

[SteveInMD]

This doesn't make sense to me. The Taxable Fuel Inspection Notice says they can detain boats for inspection. Every marina I've ever been to only sells dyed fuel. I don't get it.

It was my understanding that you can used dyed fuel on the road, but you have to document your usage and pay the taxes.

 

[thatguy]

Are you talking about OTR = On The Road
or are you talking about OTR = Off The Road?


1*You can run dyed fuel in any vehicle if you keep it off the highways. The issue is where a vehicle is used not what it is used for nor who uses it or who owns it.
Also this is not a state or IRS income tax matter nor is it an EPA issue.
It is only a highway tax situation .

2* see 1
3* see 1

You are correct in that as long as you dont take the vehicle on the road your OK.. I was refering to ppl taking their 'farm use' (unlicensed) vehicles on the road to get supplies, go to market, etc..

"Also this is not a state or IRS income tax matter"

I didnt say it was an 'income tax matter' - Here in VA the DMV collects the fuels tax that goes toward the highway maintenance fund - so that makes it a state tax matter, just not income tax..

The fuels tax the IRS imposes is an 'excise' tax, not income..

I was wrong on the EPA statement in some ways.. The EPA restricted the use of 'high sulfur' fuel in a highway vehicle - and now that most diesel fuel is low or ultra low it probably doesnt come into play anymore..

b