IRS granting dyed diesel penalty relief as a result of Hurricane Ian


IR-2022-169, September 30, 2022

WASHINGTON — The Internal Revenue Service, in response to disruptions resulting from Hurricane Ian, will not impose a penalty when dyed diesel fuel with a sulfur content that does not exceed 15 parts-per-million is sold for use or used by emergency vehicles on the highway in the state of Florida.

This relief begins on September 28, 2022, and will remain in effect through October 19, 2022.

This penalty relief is available to any person that sells or uses dyed diesel fuel in an emergency vehicle for highway use. In the case of the operator of the emergency 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 tax for dyed diesel fuel sold for use or used in an emergency vehicle on the highway in the state of Florida during the relief period. 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.