IRS waives Form 720 filing and recordkeeping for dyed diesel used on highways through December 31

The paperwork goes the same way as the penalties. In IR-2026-125, issued Wednesday, the IRS said it will not challenge missed filings or missing records when the only liability involved is section 4041(a) tax on taxable uses of dyed diesel between October 1 and December 31.

That covers filing a Form 720 solely to report the tax, reporting it on a Form 720 that is otherwise due, and keeping records only to support it. No civil penalties or additions to tax apply to those failures, and nothing has to be filed or reconstructed after the year ends.

Anyone filing Form 720 for other excise taxes must keep doing so. The agency said it is weighing a grace period for red dye left in fuel tanks once the relief ends.

An October 14 release suspended the related penalties and said further guidance on postponing the tax payments would follow.