Daily Tax Report ®

Case: Butane as Taxable Fuel Ineligible for Alternative Fuel Mixture Credit (S.D. Tex.) (IRC §6426)

March 26, 2020, 5:00 AM

Producer of a mixture of butane and gasoline not entitled to an alternative fuel mixture credit for the butane, a magistrate judge for a district court recommended. Taxpayer paid quarterly excise taxes but then sought a refund claiming the alternative fuel mixture credit under tax code Section 6426(e). The IRS denied the refund claim. The court found persuasive the IRS’s reasoning in Revenue Ruling 2018-2 that found butane to be a taxable fuel under Section 4083 and not an alternative fuel. [Vitol, Inc.v. United States, No. H-18-2275 (S.D. Tex. Feb. 25, 2020)]


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