How do fry-powered drivers avoid paying tax evasion penalties?

How do you avoid paying a tax evasion penalty? That is, you're not paying a road use tax because you're making your own diesel fuel. Sam Alabama


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Tax evasion? That’s quite an accusation. Thanks, Sam, for your concern over how I complete my 1040. Are you an IRS agent, or just a dutiful citizen worried the federal government might implode if it doesn’t get the extra $32 a year I might owe it?

First, some background for other readers out there—and some instructions for grease-powered drivers. When you pay for unleaded gas at the pump, you’re also paying “road use” taxes levied by the state and federal governments. State taxes vary, but the federal government charges 24.4 cents per gallon, and the money is supposed to go to road, bridge, and highway upkeep. So if you’re making your own fuel or burning straight vegetable oil, you might not be properly rendering unto Caesar like you should.

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It’s such an arcane legal hiccup that even Governor Arnold Schwarzenegger, who drives a Hummer converted to run on grease he gets from Costco, was unaware of it until a Los Angeles Times reporter told him. (Darn that liberal media.) I certainly didn’t know about road taxes when I converted my 1985 Mercedes diesel to run on waste French fry oil. (Would you feel more comfortable if I call it freedom fry oil, Sam?)

Not that ignorance of the law gives me immunity, of course. I now understand that we grease-powered drivers need to fill out IRS form 637 each year, and form 720 quarterly in order to meet our federal road tax requirements. Fortunately, Illinois, Indiana, Texas, and my home jurisdiction of North Carolina now exempt grease-power drivers from state taxes, so I’m off the hook there.

I might be wrong on this point, and I’m certainly not advocating that anyone should break the law, but I think the feds have bigger fish to, um, fry. I don’t see Uncle Sam busting a handful of patriotic nerds doing their part to wean the country off foreign oil by powering their cars with onion ring dregs. Now if I were actually selling the stuff, that would be a different matter altogether.

Sam, I can understand if you think I’m not paying my fair share of the road maintenance burden if I’m somehow not going through the immense hassle of calculating my federal tax, filling out the proper forms, and sending the government quarterly checks that equate to about the cost of a Happy Meal. But if we start nailing grease-power drivers, there are other asphalt freeloaders who should be punished too. I’m thinking of the people who drive plug-in electric cars, mopeds, and those Vespa motor scooters. And don’t forget bicyclists, pedestrians, and bus riders. Come to think of it, Prius drivers get such good mileage, they’re not paying their share of road taxes, either. Those deadbeats!

To even out the system, maybe we should also reward owners of the biggest, gas-hogging SUVs. Like if your vehicle gets less than 15 miles per gallon, perhaps you’re allowed to use the highway HOV lanes with only a single occupant. Just a thought. I hope I answered your question, Sam.

Useful Links:

IRS form 637 IRS form 720

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