Taxpayer Denied Fuel Tax Refunds – Court Sided with IRS

The Tax Court in a recent decision has determined that a heavy duty tractor trailer is not a vehicle designed for off-highway transportation and has denied the taxpayer a refund of diesel fuel tax. In the case, Myles Lorentz, Inc v. Commissioner,  the taxpayer had heavy duty tractor trailers which were modified to hold extremely large loads.  The taxpayers maintained that together they were considered one vehicle that had been specially modified  for off highway use and that its design substantially impaired its ability to travel on public highways due to the excessive weight of the tractor and trailer.

The court disagreed with the taxpayer and stated in fact the tractor and the trailer were two separate vehicles and that the tractor’s special design did not limit it to only off highway usage and that the tractors were not substantially impaired for on highway use since that could fit and operate on a highway at regular speeds.

This ruling may impact your ability to claim fuel tax refunds or use of dyed fuels in certain vehicles.  Please contact us so we can assist you in determining if you are in compliance.


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