US cracks down on firms not paying fuel import tax

Thu Jul 29, 2004

WASHINGTON, July 29 (Reuters) - The Treasury Department issued guidelines on Thursday to crack down on U.S. importers of fuel that don't pay the taxes due on gasoline, diesel fuel and kerosene shipments.

The regulations from the Internal Revenue Service come as the United States has become more dependent on foreign petroleum supplies to meet domestic demand. U.S. imports of crude oil and refined petroleum products last week reached a record 11.3 million barrels a day.

"Some of the fuel dealers liable for the tax on imported gasoline, diesel fuel and kerosene are not registered as required under IRS regulators and are not paying the tax on imported fuel," said Greg Jenner, Acting Assistant Secretary for Tax Policy.

The IRS said those importers not registered and avoiding paying the tax have an unfair advantages over their competitors following the rules and are also depriving the government trust fund that pays for highway and mass transit projects of revenue.

The agency did not estimate how much money is lost or how many unregistered dealers there are.

The regulations say that importers and the unregistered dealers acting on their behalf when buying foreign fuel are jointly liable for the tax.

Under present rules, the IRS will be able to collect any tax that is not paid by either the importer or the unregistered dealer by charging the importer's customs bond.

"Nonregistered fuel dealers can expect to see stepped-up enforcement of compliance with the laws governing imported fuel," said IRS Commissioner Mark Everson.

The IRS said importers can avoid liability for the tax by doing business only with fuel dealers that are registered with the agency.

The new regulations have a certification procedure so importers can verify a fuel dealer's registration.

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