Reasonable Cause Exception for Fuel Tax Claims

IRC §6675

Avoid a penalty equal to twice the excessive amount claimed for non-taxable fuel use (e.g., farming or non-highway use) by demonstrating the claim was due to reasonable cause.

Eligibility

Taxpayers who made excessive claims under sections 6416(a)(4), 6420, 6421, 6427, or 6435 but can prove the error was not due to willful neglect.

Frequently Asked Questions

Who is eligible for the Reasonable Cause Exception for Fuel Tax Claims?

Taxpayers who made excessive claims under sections 6416(a)(4), 6420, 6421, 6427, or 6435 but can prove the error was not due to willful neglect.

How does the Reasonable Cause Exception for Fuel Tax Claims work?

Avoid a penalty equal to twice the excessive amount claimed for non-taxable fuel use (e.g., farming or non-highway use) by demonstrating the claim was due to reasonable cause.

What law authorizes the Reasonable Cause Exception for Fuel Tax Claims?

The Reasonable Cause Exception for Fuel Tax Claims is authorized under IRC §6675 of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §6675

Source: Internal Revenue Code, Title 26, United States Code

§ 6675. Excessive claims with respect to the use of certain fuels(a) Civil penaltyIn addition to any criminal penalty provided by law, if a claim is made under section 6416(a)(4) (relating to certain sales of gasoline), section 6420 (relating to gasoline used on farms), 6421 (relating to gasoline used for certain nonhighway purposes or by local transit systems), 6427 (relating to fuels not used for taxable purposes), or 6435 (relating to eligible indelibly dyed fuel) for an excessive amount, unless it is shown that the claim for such excessive amount is due to reasonable cause, the person making such claim shall be liable to a penalty in an amount equal to whichever of the following is the greater:(1) Two times the excessive amount; or (2) $10. (b) Excessive amount definedFor purposes of this section, the term “excessive amount” means in the case of any person the amount by which—(1) the amount claimed under section 6416(a)(4), 6420, 6421, 6427, or 6435, as the case may be, for any period, exceeds (2) the amount allowable under such section for such period. (c) Assessment and collection of penaltyFor assessment and collection of penalty provided by subsection (a), see section 6206. (Added Apr. 2, 1956, ch. 160, § 3, 70 Stat. 90; amended June 29, 1956, ch. 462, title II, § 208(d)(2), 70 Stat. 396; Pub. L. 89–44, title II, § 202(c)(3)(A), June 21, 1965, 79 Stat. 139; Pub. L. 91–258, title II, § 207(d)(8), May 21, 1970, 84 Stat. 249; Pub. L. 95–618, title II, § 233(b)(2)(D), Nov. 9, 1978, 92 Stat. 3191; Pub. L. 97–424, title V, § 515(b)(11)(A)–(C), Jan. 6, 1983, 96 Stat. 2182; Pub. L. 109–59, title XI, § 11163(d)(2), (3), Aug. 10, 2005, 119 Stat. 1975; Pub. L. 119–21, title VII, § 70525(b)(3), July 4, 2025, 139 Stat. 283.)

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Legal Sources

US Code (Official) — 26 USC §6675 → Cornell Law Institute — 26 USC §6675 → Search IRS.gov for IRC §6675 → Treasury Regulations (26 CFR) →

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