Fuel Tax Evasion-Intergovernmental Enforcement Effort


To increase intergovernmental activities and enforcement efforts among public agencies to reduce Federal fuel tax evasion. Funds made available shall be used only to expand or enhance intergovernmental efforts to increase motor fuel tax enforcement and payments; to supplement motor fuel tax examinations and criminal investigations; and to increase research and training in the area of Federal fuel tax evasion.

General information about this opportunity
Last Known Status
Program Number
Federal Agency/Office
Agency: Department of Transportation
Office: Federal Highway Administration (FHWA)
Type(s) of Assistance Offered
Program Accomplishments
Fiscal Year 2014: Funding awarded in FY 2014 was for States participating in the Joint Operations Center for National Fuel Tax Compliance (JOC). This is a joint project involving FHWA, the Internal Revenue Service (IRS), and several States. The State’s fuel tax data is combined with Federal fuel tax information along with data from a number of other government and private sources. The funds from this program were used to support the participating State’s expenses, including personnel, travel and equipment. This was the last year for which participating States received automatic funding for their participation, which was authorized through an agreement between the IRS and the US DOT. Fiscal Year 2015: No Current Data Available Fiscal Year 2016: No Current Data Available
Moving Ahead for Progress in the 21st Century Act (MAP-21) , Public Law 112-141, 23 U.S.C 143.
Who is eligible to apply/benefit from this assistance?
Applicant Eligibility
States, and the District of Columbia,.
Beneficiary Eligibility
States, and the District of Columbia.
No Credentials or documentation are required. This program is excluded from coverage under 2 CFR 200, Subpart E - Cost Principles.
What is the process for applying and being award this assistance?
Pre-Application Procedure
Preapplication coordination is not applicable. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.
Application Procedure
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. Applicants must submit all proposals electronically through www.Grants.gov.
Award Procedure
Awards are scheduled to be made for Fiscal Year 2015. FHWA and IRS will jointly recommend and approve projects for Federal funding for fuel tax evasion intergovernmental enforcement efforts. States selected to receive funding will enter into negotiations with FHWA and be required to enter into a project agreement with FHWA.
May 14, 2015 to Jul 17, 2015 Not available at this time.
Approval/Disapproval Decision Time
The approval/disapproval time will take approximately 1 month.
How are proposals selected?
Applicants are encouraged to submit innovative proposals to reduce fuel tax evasion and increase collaboration and coordination among several public agencies. Priority will be given to proposals that involve more than one public agency. FHWA and the IRS will review the proposals using a scoring process that includes consideration of completeness of the application, enforcement potential, innovation, intergovernmental inclusion, and risk of success.
How may assistance be used?
State agencies can use the funds: to expand efforts to enhance motor fuel tax enforcement; to supplement motor fuel tax examinations and criminal investigations; to develop automated data processing tools to monitor motor fuel production and sales; to evaluate and implement registration and reporting requirements for motor fuel taxpayers; to reimburse State expenses that supplement existing fuel tax compliance efforts; to analyze and implement programs to reduce tax evasion associated with other highway use taxes; to support efforts between States and Indian tribes to address issues relating to State motor fuel taxes; and to analyze and implement programs to reduce tax evasion associated with foreign imported motor fuel. An approved indirect cost rate by the entity’s cognizant agency is required before claiming indirect costs under a Federal award (2 CFR 200, Appendix VII, States and Local Government and Indian Tribe Indirect Cost Proposals). Allowable activities are included in the defining statute at the United States Code, Title 23, Section143. Pre-award costs are not allowed under this program.
What are the requirements after being awarded this opportunity?
Annual reports will required for each project and will be outlined in the project agreement. Cash reports are not applicable. Progress reports are not applicable. Expenditure reports are not applicable. Performance monitoring is not applicable.
In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503.
Participating agencies must keep records of expenditures/accomplishments as applicable.
Other Assistance Considerations
Formula and Matching Requirements
Statutory formulas are not applicable to this program.
Matching requirements are not applicable to this program.
MOE requirements are not applicable to this program.
Length and Time Phasing of Assistance
The program is currently authorized for fiscal year 2015. There is no statutory expiration of the funds once awarded. Method of awarding/releasing assistance: lump sum.
Who do I contact about this opportunity?
Regional or Local Office
Headquarters Office
Michael Dougherty, 1200 New Jersey Ave. S.E., Washington, District of Columbia 20590 Email: michael.dougherty@dot.gov Phone: (202) 366-9234.
Website Address
Financial Information
Account Identification
(Project Grants) FY 14 $9,192,975; FY 15 est $2,000,000; and FY 16 est $10,000,000 - The FY 2015 budget line item is for the Highway Use Tax Evasion program. The source of funds for this program is a deduction (set-aside) of not more than $10 million per year from the funds authorized for FHWA administrative expenses. Of the amount set-aside, $2 million must be reserved to make grants for intergovernmental enforcement efforts, including research and training. . The 2014 allocated amount was not fully awarded, and the balance is carried forward for the 2015 awards.
Range and Average of Financial Assistance
Minimum: $10,000; Maximum $250,000.
Regulations, Guidelines and Literature
Not Applicable.
Examples of Funded Projects
Fiscal Year 2014: Funding for this program was provided to participating pilot States in the Joint Operations Center (JOC) for National Fuel Tax Compliance through the pilot phase of that program. These funds were used to pay for the costs associated with the States’ analysts and auditors for the program, who were required to travel to the JOC National Data Center, in Crystal City, VA, for extended training. Due to changes in the requirements for advertising and awarding grants, the balance of the 2014 funds will be combined with the FY 2015 funds for the 2015 advertised opportunity. Fiscal Year 2015: Final grants will not be awarded until all applications are reviewed after the July 17, 2015 deadline, and approved by FHWA Administrators. Several of the awards will likely be used to start or enhance existing programs. Funds will likely also be used to expand auditing and tracking programs, including enhancements to data systems. Fiscal Year 2016: It is likely that the awards will involve various enforcement programs and enhancements to data systems. One problem that still causes fuel tax evasion is the use of dyed diesel fuel on the highway. When diesel fuel leaves the bulk terminal, fuel to be used in a non-taxable fashion (off-highway use) is injected with a red dye. At both the Federal and State level, fuel taxes are not imposed on dyed fuel. Many States have enforcement initiatives where vehicles are randomly checked for the presence of red dye in the fuel. Several of the awards will likely be used to start or enhance existing programs. Funds will likely also be used to expand auditing and tracking programs, including enhancements to data systems.


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