The IRS has announced temporary nationwide tax penalty relief for the highway use of dyed diesel fuel. It’s retroactive to Oct. 1, 2026, and applies through Dec. 31, 2026. Dyed diesel fuel, normally used for heavy construction and farming equipment, generally triggers federal excise tax and penalties when used on public roads. During the relief period, the IRS will suspend certain penalties, enforcement activities and recordkeeping requirements. But state taxes and penalties may still apply. Additional IRS guidance on tax payment deferrals and reporting is expected. Contact us for details on how the relief may affect your business.
