SECTION 2. BACKGROUND

.01 Section 6715.

(1) Section 6715(a) provides that if any dyed fuel is sold or held for sale by any person for any use which such person knows or has reason to know is not a nontaxable use of such fuel; any dyed fuel is held for use or used by any person for a use other than a nontaxable use and such person knew, or had reason to know, that such fuel was so dyed; or any person willfully alters, or attempts to alter, the strength or composition of any dye or marking done pursuant to § 4082 in any dyed fuel, then such person shall pay a penalty in addition to the tax (if any).

(2) Section 6715(b)(1) provides that the amount of the penalty under § 6715(a) on each act shall be the greater of $10 for each gallon of dyed fuel involved or $1,000.

(3) Section 6715(b)(2) provides that in determining the penalty under § 6715(a) on any person, § 6715(b)(1) is applied by increasing the amount in § 6715(b)(1)(A) by the product of the amount and the number of prior penalties (if any) imposed by § 6715 on the person (or a related person or any predecessor of the person or related person).

(4) Section 6715(c) provides that “dyed fuel” means any dyed diesel fuel or

kerosene, whether or not the fuel was dyed pursuant to § 4082. Also, “nontaxable use” has the same meaning given the term by § 4082(b).

(5) Section 6715(d) provides that if a penalty is imposed under § 6715 on any business entity, each officer, employee, or agent of the entity who willfully participated in any act giving rise to the penalty shall be jointly and severally liable with the entity for the penalty.

.02 Sections 4083, 7606, and 7342 .

(1) Section 4083(a)(1) provides that “taxable fuel” means gasoline, diesel fuel, and kerosene.

(2) Section 4083(c)(1) provides that the Secretary may, in administering compliance with the tax on taxable fuel, enter any place at which taxable fuel is produced or is stored (or may be stored) for purposes of examining the equipment used to determine the amount or composition of such fuel and the equipment used to store such fuel, and taking and removing samples of such fuel; and detain, for those purposes, any container which contains or may contain any taxable fuel.

(3) Section 7606 provides that the Secretary may enter any building or place where any articles subject to tax are made, produced, or kept so far as may be necessary for the purpose of examining the articles.

(4) Section 7342 provides that any owner of a building or place, or person having agency or superintendence of the same, who refuses to admit any officer or employee of the United States Treasury Department acting under authority of § 7606 or refuses to permit the officer or employee to examine the article or articles, shall, for every refusal, forfeit $500.

(5) Section 4083(c)(3) provides that the Refusal Penalty provided by § 7342 shall apply to any refusal to admit entry or other refusal to permit an action by the Secretary authorized by § 4083(c)(1), except that § 7342 is applied by substituting “$1,000” for “$500” for each refusal.