IRS Waives Dyed Diesel Penalties, But Taxes Remain
Tax attorney Nicole Elliott was quoted in a Transport Topics article about temporary IRS relief for dyed diesel fuel sold or used for highway travel. The IRS announced on October 14, 2026, that it will not impose federal excise tax penalties from October 1 through December 31, 2026, and will suspend ordinary collection and enforcement procedures, federal roadside inspections and certain recordkeeping requirements during that period. Nicole, who recently co-authored a Holland & Knight alert examining the scope of the relief and its implications for taxpayers, clarified that truckers, fuel retailers and other taxpayers must still evaluate their federal excise tax obligations and maintain the records necessary to determine any amounts owed – the levy was created via statute, so it can be rescinded only via a statute, which falls under congressional purview instead of U.S. Department of the Treasury of IRS authority.
"That relief did not eliminate the underlying tax liability because Treasury and the IRS lack authority to eliminate a tax imposed by statute; only Congress can do so," she said.