Fuel Tax Evasion

Revenues from motor fuel and other highway use taxes provide the primary source of funding for our nation’s transportation system, and ensuring all of these taxes are collected, remitted, and credited to the Highway Trust Fund is a priority for FHWA. Loss of revenue due to tax evasion is an on-going issue that is being addressed at Federal and State levels. Revenue and enforcement agencies are working together in various joint Federal/state and intergovernmental motor fuel tax compliance projects to address the issue of motor fuel tax evasion through audit and enforcement efforts as well as through advances in technology.

Numerous research projects have tried to determine losses resulting from motor fuel tax evasion. Estimates have been made by non-FHWA sources during Congressional testimony, through econometric and statistical analyses, as well as through revenue modeling. However at the Federal level and in many States, moving the point of taxation to the terminal rack has reduced the risk of evasion for some of the schemes. Additionally, with the electronic reporting and tracking of fuel movements, both Federal and State revenue agencies are able to react more quickly to evasion schemes. Reliable estimates of evasion are not available.

PUBLICATIONS

For more information about the Fuel Tax Evasion Program, contact Michael Dougherty

About Us

Mr. Michael Dougherty is a Program Analyst on the Fuel Tax Evasion Program Team in FHWA's Office of Policy and Governmental Affairs. His primary responsibility is to oversee the Highway Use Tax Evasion programs including the various projects at the Internal Revenue Service (IRS) and the Intergovernmental Fuel Tax Evasion Enforcement Grants issued to State and/or Tribal agencies. He began is service with the FHWA in October 2007. Prior to that he worked for the Comptroller of Maryland for 25 years in various excise tax areas, principally motor fuel taxes. As Assistant Director of the Motor Fuel Tax Section, he oversaw the accounting and audit functions, and assisted with drafting and tracking legislation. Mr. Dougherty received his bachelor's degree in Business Administration from Towson University, Towson, Maryland.