SECTION 4. ISSUES FOR APPEALS

CONSIDERATION

.01 All issues that remain in dispute between a taxpayer and the IRS involving either the Dyed Fuel Penalty or the Refusal Penalty are appropriate for an administrative appeal.

.02 With respect to the Dyed Fuel Penalty, issues in dispute may include whether (1) the fuel involved in an alleged violation was dyed; (2) the taxpayer knew or had reason to know that the fuel was sold or held for sale for other than a nontaxable use (in a case involving § 6715(a)(1)); (3) the taxpayer knew or had reason to know that the fuel was dyed (in a case involving § 6715(a)(2)); (4) the taxpayer acted willfully (in a case involving § 6715(a)(3)); (5) the officer, employee, or agent of a business entity willfully participated in any act giving rise to the Dyed Fuel Penalty under § 6715(d); or (6) the IRS correctly determined the amount of fuel subject to the Dyed Fuel Penalty.

.03 With respect to the Refusal Penalty, issues in dispute may include whether the IRS had authority to make the inspection in question.