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Sec. 6715. Dyed Fuel Sold For Use Or Used In Taxable Use, Etc.

I.R.C. § 6715(a)
Imposition of penalty. --
If --
I.R.C. § 6715(a)(1)
any dyed fuel is sold or held for sale by any person for any use which such person knows or has reason to know is not a nontaxable use of such fuel,
I.R.C. § 6715(a)(2)
any dyed fuel is held for use or used by any person for a use other than a nontaxable use and such person knew, or had reason to know, that such fuel was so dyed,
I.R.C. § 6715(a)(3)
any person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye or marking done pursuant to section 4082 in any dyed fuel, or
I.R.C. § 6715(a)(4)
any person who has knowledge that a dyed fuel which has been altered as described in paragraph (3) sells or holds for sale such fuel for any use which the person knows or has reason to know is not a nontaxable use of such fuel,
then such person shall pay a penalty in addition to the tax (if any).
I.R.C. § 6715(b) Amount Of Penalty. --
I.R.C. § 6715(b)(1) In General. --
Except as provided in paragraph (2), the amount of the penalty under subsection (a) on each act shall be the greater of --
I.R.C. § 6715(b)(1)(A)
$1,000, or
I.R.C. § 6715(b)(1)(B)
$10 for each gallon of the dyed fuel involved.
I.R.C. § 6715(b)(2) Multiple Violations. --
In determining the penalty under subsection (a) on any person, paragraph (1) shall be applied by increasing the amount in paragraph (1)(A) by the product of such amount and the number of prior penalties (if any) imposed by this section on such person (or a related person or any predecessor of such person or related person).
I.R.C. § 6715(c) Definitions. --
For purposes of this section --
I.R.C. § 6715(c)(1) Dyed Fuel. --
The term “dyed fuel” means any dyed diesel fuel or kerosene, whether or not the fuel was dyed pursuant to section 4082.
I.R.C. § 6715(c)(2) Nontaxable Use. --
The term “nontaxable use” has the meaning given such term by section 4082(b).
I.R.C. § 6715(d) Joint And Several Liability Of Certain Officers And Employees. --
If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.
I.R.C. § 6715(e) No Administrative Appeal For Third And Subsequent Violations.--
In the case of any person who is found to be subject to the penalty under this section after a chemical analysis of such fuel and who has been penalized under this section at least twice after the date of the enactment of this subsection, no administrative appeal or review shall be allowed with respect to such finding except in the case of a claim regarding--
I.R.C. § 6715(e)(1)
fraud or mistake in the chemical analysis, or
I.R.C. § 6715(e)(2)
mathematical calculation of the amount of the penalty.
(Added Pub. L. 103-66, 13242 as section 6714; Redesignated Pub. L. 104-188, title I, 1703, August 20, 1996, 110 Stat. 1755 ;Pub. L. 105-34, titleX, Sec. 1032(e)(1), Aug. 5, 1997, 111 Stat 788; Pub. L. 108-357, title VIII, Secs. 855(a), 856(a), (b), Oct. 22, 2004, 118 Stat. 1418.)
Background Notes
EFFECTIVE DATE
Section applicable on January 1, 1994.
AMENDMENTS
2004 - Subsec. (a)(3). Pub. L. 108-357, Sec. 856(b), amended par. (3) by substituting “alters, chemically or otherwise, or attempts to so alter,” for “alters, or attempts to alter,”.
Subsec. (a). Pub. L. 108-357, Sec. 856(a), amended subsec. (a) by striking “or” at the end of par. (2); by inserting “or” at the end of par. (3); and by adding par. (4).
Subsec. (e). Pub. L. 108-357, Sec. 855(a), added subsec. (e).
1997 - Subsec. (c)(1). Pub. L. 105-34, Sec. 1032(e)(11), inserted “or kerosene” after “diesel fuel”.
1996 - Section 6715. Pub. L. 104-188, Sec. 1703(n)(9)(A), redesignated section ‘6714’ as section ‘6715’.
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 856 of Pub. L. 108-357 effective on the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by Sec. 855(a) of Pub. L. 108-357 effective for penalties assessed after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendment by Sec. 1032(e)(11) of Pub. L. 105-34 effective on July 1, 1998.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by section 1703(n)(9)(A) of Pub. L. 104-188, effective as if included in the provision of the Revenue Reconciliation Act of 1993 to which such amendment relates.
FLOOR STOCK TAXES
Sec. 1032(g) of Pub. L. 105-34 provided that:
“(g) Floor Stock Taxes.--
“(1) Imposition of tax.--In the case of kerosene which is held on July 1, 1998, by any person, there is hereby imposed a floor stocks tax of 24.4 cents per gallon.
“(2) Liability for tax and method of payment.--
“(A) Liability for tax.--A person holding kerosene on July 1, 1998, to which the tax imposed by paragraph (1) applies shall be liable for such tax.
“(B) Method of payment.--The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe.
“(C) Time for payment.--The tax imposed by paragraph (1) shall be paid on or before August 31, 1998.
“(3) Definitions.--For purposes of this subsection--
“(A) Held by a person.--Kerosene shall be considered as “held by a person” if title thereto has passed to such person (whether or not delivery to the person has been made).
“(B) Secretary.--The term “Secretary" means the Secretary of the Treasury or his delegate.
“(4) Exception for exempt uses.--The tax imposed by paragraph (1) shall not apply to kerosene held by any person exclusively for any use to the extent a credit or refund of the tax imposed by section 4081 of the Internal Revenue Code of 1986 is allowable for such use.
“(5) Exception for fuel held in vehicle tank.--No tax shall be imposed by paragraph (1) on kerosene held in the tank of a motor vehicle or motorboat.
“(6) Exception for certain amounts of fuel.--
“(A) In general.--No tax shall be imposed by paragraph (1) on kerosene held on July 1, 1998, by any person if the aggregate amount of kerosene held by such person on such date does not exceed 2,000 gallons. The preceding sentence shall apply only if such person submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph.
“(B) Exempt fuel.--For purposes of subparagraph (A), there shall not be taken into account fuel held by any person which is exempt from the tax imposed by paragraph (1) by reason of paragraph (4) or (5).
“(C) Controlled groups.--For purposes of this paragraph--
“(i) Corporations.--
“(I) In general.--All persons treated as a controlled group shall be treated as 1 person.
“(II) Controlled group.--The term “controlled group” has the meaning given to such term by subsection (a) of section 1563 of such Code; except that for such purposes the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in such subsection.
“(ii) Nonincorporated persons under common control.--Under regulations prescribed by the Secretary, principles similar to the principles of clause (i) shall apply to a group of persons under common control where 1 or more of such persons is not a corporation.
“(7) Coordination with section 4081.--No tax shall be imposed by paragraph (1) on kerosene to the extent that tax has been (or will be) imposed on such kerosene under section 4081 or 4091 of such Code.
“(8) Other laws applicable.--All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4081 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply with respect to the floor stock taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section 4081.”