Prime Is Suing the IRS for $11 Million Over Fuel Tax It Paid on Reefer Diesel. The Same Credit It Is Fighting For Is One Small Carriers Can Claim Too.

Insight summary

• •Prime Inc. is suing the IRS for over $11 million to recover federal excise tax paid on diesel fuel used solely for refrigeration units on its trucks.
• •The company argues that diesel powering reefer units is off-highway fuel and should not be taxed as highway fuel because it doesn’t propel the vehicle.
• •The federal fuel excise tax funds highway infrastructure and is currently 24.3 cents per gallon on undyed diesel.
• •This tax credit is available to all businesses, including small carriers and owner-operators, for fuel used in non-propulsive equipment like reefers.
• •Eligible claimants must file IRS Form 4136 or other forms such as 8849 or 720 Schedule C, noting the new 2024 requirement to attach documentation supporting the fuel tax credit.
• •The IRS has increased enforcement due to widespread abuse of the fuel tax credit, emphasizing proper documentation.
• •Prime has exhausted refunds through administrative channels and now pursues a federal lawsuit, seeking refund, legal fees, and interest.