IRS Information Letter: Diesel Fuel Dyed By Mechanical Injection Not Subject to Excise Tax (IRC §4082)

No tax is imposed if diesel fuel is dyed “by mechanical injection,” the IRS determined. Taxpayer intended to seek a letter ruling that corporation was in compliance with Treasury regulations when it dyes undyed diesel fuel, but the IRS stated that the determination was primarily one of fact and not appropriate for a letter ruling. The IRS directed Taxpayer to temporary regulations regarding mechanical injections (T.D. 9199) and Notice 2005-80, providing transition rules. [IRS Info. Letter 2019-0022]

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