| Obviously, the destruction caused by Hurricane Katrina | | | | period since it is clear the fuel issues will not be |
| has had a major impact on fuel supplies. The IRS is | | | | overcome by the deadline. |
| temporarily waiving regulations that ban the sale of | | | | While the penalties associated with dyed diesel are |
| certain diesel fuels to address shortages. | | | | waived, the IRS has chosen to keep a basic diesel fuel |
| Dyed Diesel Fuel No Longer Banned | | | | tax in place. All sales of dyed diesel fuel are subject to |
| Diesel fuel comes in two general forms, clear and | | | | a 24.4 cent tax per gallon. Either the retailer or |
| dyed. Dyed diesel is not environment friendly. Under | | | | purchaser can pay. The IRS, however, has indicated |
| laws passed by Congress, the IRS effectively bans | | | | that it will waive any penalties and interest |
| the sale of dyed diesel fuel for use on highways. Put | | | | assessments associated with failure to make |
| another way, the trucking industry must use clear | | | | bi-weekly deposits of the tax. In addition, users of dyed |
| diesel for transports. | | | | diesel fuel need not concern themselves with any EPA |
| In the wake of serious fuel shortage issues caused by | | | | restrictions related to its use during this temporary |
| Hurricane Katrina, the IRS is immediately waiving the | | | | waiver. |
| tax penalties applicable to the use of dyed diesel on | | | | In Closing |
| highways. This surprisingly quick policy decision is a | | | | Typically criticized for reacting slowly, the IRS should |
| reflection of exploding fuel prices and a stark lack of | | | | be commended for taking quick steps to free up fuel |
| supply. | | | | from a tax perspective. To support the trucking |
| The order issued by the Commissioner of the IRS is | | | | industry, let us hope the deadlines are extended well |
| only effective until September 15, 2005 at this time. It is | | | | past September 15, 2005. |
| anticipated that the Commissioner will extend this time | | | | |