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HVUT Penalties


Trucks

Though there are many ways to evade the HVUT, documented cases are reasonably rare. This page highlights three HVUT evasion cases: (a) a case in Montana of international carrier evasion, (b) a case of re-titling vehicles to avoid providing proof of payment in Illinois, and (c) a case of false exemption in Washington. A description of each case follows.

International carrier evasion of HVUT. One joint border inspection program conducted in Montana suggests that HVUT evasion by international carriers may be a problem. The investigation, which took place between September 1995 and September 1996, represented a cooperative effort between the State of Montana, the IRS, U.S. Customs, the Montana and Idaho National Guard, the U.S. DOT, and the Alberta Treasury. Inspections of fuel loads, cargos, vehicle safety, driver logs, fuel use, licensing of vehicles, and registration of vehicles were conducted at numerous ports of entry, including the ports of Sweetgrass, Roosville, Del Bonita, and Whitlash.

Under the joint border inspection project, 1,188 commercial vehicles were inspected. Of those vehicles inspected, 512 (43 percent) were not in compliance with the federal HVUT, four commercial vehicles (0.3 percent) were operating with dyed fuel in their supply tanks, and 26 (2.2 percent) were not in full compliance with IFTA and IRP regulations. During the operation, 36 fuel tankers were checked and 22 (61 percent) were guilty of dyed fuel violations, including improper invoicing or the mislabeling of the fuel. The border project yielded $1.4 million in state and federal assessments, averaging $86,609 per day.

Re-titling vehicles to avoid the HVUT. In November 2001, an owner of a small trucking company was found guilty of HVUT evasion. The owner of the trucking company told the court he evaded HVUT by re-titling his heavy vehicles each year in Illinois. He specifically changed the names of ownership from himself to his company and back again. By continually changing the ownership name, he was able to avoid providing proof that he had paid the HVUT for 11 years.

False exemption. A Native-American member of a western Indian Tribe claimed an exemption for HVUT and diesel fuel tax using the Native American exemption in 26 CFR 41.6001-2 for tribal use. The individual used his logging truck to deliver logs to off-reservation mills. The treaty contained no express exemptive language. The case was found in favor of the U.S. government.

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