Countywide : IRS Cracks Down on Untaxed-Fuel Users

Truckers would be well advised to check the color of their diesel fuel this week before turning into freeway weigh stations, where the Internal Revenue Service on Monday began looking for fuel tax evaders.

Officials at the IRS regional office in Laguna Niguel, which has jurisdiction over five Southern California counties, said they have sent a specially trained team of six agents into the field to issue citations to anyone using tax-free diesel fuel on the highway.

The untaxed fuel, which is legally used only by off-road vehicles such as farm tractors, is easy to detect, they say, because it is dyed, usually red, while the taxed fuel is clear or slightly yellow.

While the IRS has been making a nationwide effort since September to stop the illegal use of lower-priced, untaxed fuel, this is the first such crackdown in Southern California, said IRS spokeswoman Judith Golden.

The purpose of the enforcement action, called Operation Red Alert, Golden said, is not only to salvage an estimated $800 million per year in fuel taxes being avoided by truck drivers, but to reduce air pollution. The untaxed fuel, she said, is “high in sulfur content and in violation of the federal Clean Air Act.”

Truckers found with red-dyed diesel fuel face a first-time penalty of $1,000 or $10 per gallon, whichever is greater, Golden said.

Truckers also will be held accountable for paying the 24.4-cent-per-gallon federal excise tax on the diesel fuel.

Jesse Cota, director of the IRS Laguna Niguel district, said truckers “have a responsibility to read the fuel pump label and make sure they do not buy dyed fuel for their trucks.”