The Internal Revenue Service has published temporary regulations governing credits to taxpayers with respect to certain previously taxed dyed fuel.

The One, Big, Beautiful Bill Act added section 6435 to the Internal Revenue Code to allow recovery of the amount of the section 4081 tax paid with respect to diesel fuel or kerosene that later qualifies as exempt from section 4081 tax under section 4082(a). Under sec. 6435, a person who removed eligible indelibly dyed diesel fuel or kerosene (eligible dyed fuel) from a terminal is now allowed to claim a payment (without interest) equal to the amount of the section 4081 tax previously paid with respect to such dyed fuel.

Section 6435 is effective for eligible dyed fuel removed on or after December 31, 2025.

In addition, the IRS has published a proposed rule to make the temporary regulations into a final rule on this refund procedure.