IRS Issues Dyed Diesel Penalty Waiver For States Impacted by Colonial Pipeline Shutdown

May 14, 2021

The Internal Revenue Service has issued a penalty waiver dyed diesel is sold for use or used on the highway in the States of Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia. This waiver is in response to the shutdown of the Colonial Pipeline. It applies from May 7, 2021 through May 21, 2021.

This penalty waiver is available to any person that sells or uses dyed diesel fuel for highway use. In the case of the operator of the 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. There will be no penalties for failure to make semimonthly deposits of this tax.