Trump directs IRS penalty relief for dyed diesel highway use through year-end

The IRS is being directed to waive specified penalties for highway use of dyed diesel through year-end.

Executive Order 14435 directs the Treasury secretary to have the IRS announce that penalties will not be imposed when dyed diesel is sold for highway use or used on a highway from October 5 through December 31. The order also covers related deposit penalties.

The underlying tax is not automatically forgiven.

Treasury must determine whether existing law permits it to defer payment of specified diesel excise taxes incurred during the covered period. If it finds that authority, the deferred amounts would not accrue penalties or interest. Treasury guidance must identify the eligible taxpayers, covered liabilities, conditions and eventual payment date.

The order was signed October 5 and filed for public inspection Thursday. It is scheduled for Federal Register publication Friday.