IRS stops trucks to test fuel

January 25, 1995|By Michael James | Michael James,Sun Staff Writer

Siphons in hand, Internal Revenue Service inspectors are cracking down on truckers driving on Maryland highways with untaxed fuel in their tanks.

It's a far cry from Prohibition-era investigations, when IRS agents and Elliot Ness brought down Al Capone's mob. But tax evasion is tax evasion, and the government is going after violators with hefty fines.

Two IRS "diesel fuel inspectors" -- a newly created title in the agency -- siphoned fuel from 30 trucks stopped yesterday along Interstates 83 and 70, and identified three that might have been using untaxed fuel.

Such fuel is easily identifiable because it is dyed red or blue, according to government regulations, and cannot be used on public highways.

Since August, when they started the crackdown, Maryland IRS agents have inspected more than 600 trucks and businesses and issued about $30,000 in fines for untaxed fuel. Dyed fuel, which can be used for farm machinery and heating oil, has more pollutants than does normal diesel fuel and also can trigger environmental fines.

But the IRS is primarily involved because trade in untaxed fuels -- an enterprise linked to organized crime -- is estimated to cost state and federal governments hundreds of millions of dollars annually.

"Organized crime will sell the untaxed fuel at regular taxed rates, and pocket the extra money," said Paul M. Harrington, IRS director for Maryland and the District of Columbia, who went to yesterday's inspections. "We want to let people know we're out here and we're checking the fuel tanks."

The sight of IRS agents on the roadside was a shock to many truckers.

"The IRS? Out here?" said Bob Williams, a truck driver for 38 years who pulled over for an inspection along I-70 in West Friendship. "You just never know what to expect anymore. I guess as long as they don't find nothing wrong, it's OK by me."

Mr. Williams, who was hauling television picture tubes from Indianapolis, to Finley, Ohio, watched intently as IRS inspectors Craig Blackburn and Keith Felix siphoned his tank. His fuel was the proper yellow color and he left unfined.

"I wouldn't use any illegal fuel. It's not worth the fine you'd get, because the IRS will always find out what you owe," Mr. Williams said.

Most truckers, although surprised to see federal agents at inspection sites, have been cooperative, Mr. Blackburn said.

"But we still have those who get a little disgruntled with the government. You don't associate the IRS with diesel fuel," he said.

Diesel fuel is assessed a 48-cent tax per gallon. In a truck that holds 300 gallons of diesel, an operator could save $150 on a fill-up by buying untaxed fuel.

IRS officials said the unscrupulous refueling can undercut legitimate businesses that pay fuel taxes. "It basically puts the fuel-tax paying trucker at a disadvantage," Mr. Harrington said.

But the penalties can be severe. If caught with dyed fuel, a trucker faces a $1,000 fine or a $10 fine per gallon -- meaning up to a $3,000 fine in some cases.

In yesterday's operation, fuel from the three trucks in possible violation will be tested at a lab to determine if it is in fact dyed. If it is, the drivers will be fined.

Also, because dyed fuel is higher in sulfur content and is a potential contributor to acid rain, environmental fines can be imposed. Violations of the Clean Air Act are punishable by a fine of up to $25,000. IRS officials said they typically fine individual truckers rather than their companies, because it is assumed that drivers fill their own fuel tanks. But that policy was criticized by some truckers.

"If you find the dye, I have a real problem with fining the driver. A $3,000 fine could wipe somebody out, and they may not have known they pumped dyed gas in the first place," said Scott Hansson, a Carlisle, Pa., trucker who passed yesterday's inspection.

George McCoy, an independent trucker from Huntington, W.Va., said he didn't mind the IRS enforcement. "There's a lot of people who'll cut corners if they can, and that hurts the rest of us," he said. "It's human nature. If people can buy it cheap and sell it high, they'll do it."

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