SECTION 1. BACKGROUND

Section 70525 of Public Law 119-21, 139 Stat. 282 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA), added § 6435 to the Code to allow recovery of the amount of § 4081 tax previously paid on diesel fuel and kerosene that later qualifies as eligible indelibly dyed diesel fuel or kerosene (dyed fuel) exempt from § 4081 tax under § 4082(a).

More specifically, § 6435 allows a person to claim a payment (without interest) equal to the amount of § 4081 tax paid with respect to dyed fuel if the person establishes to the satisfaction of the Sec

retary of the Treasury or the Secretary’s delegate that: (i) the person removed the dyed fuel from a terminal; (ii) tax was previously paid under § 4081 (and not credited or refunded) with respect to the dyed fuel; and (iii) the dyed fuel is exempt from § 4081 tax under § 4082(a). Section 6435 is effective for dyed fuel removed on or after December 31, 2025.

Although § 6435 is functionally similar to other rules providing for excise tax payments ( see for example, §§ 6420, 6421, and 6427(l)), § 6435 differs from those provisions in that it lacks a directive to treat the payments as if they constitute refunds of overpayments of the underlying tax ( cf. §§ 6420(e)(1), 6421(g)(1), and 6427(j)(1)). Further, the OBBBA does not provide a specific appropriation for § 6435 payments. The only existing appropriation for paying § 6435 claims is the general refund appropriation, which is available only to the extent the claimant is the same person that paid the § 4081 tax to which the claim relates. See § 6402; 31 U.S.C. § 1324(b)(1). Thus, absent a statutory change, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) lack the authority to pay § 6435 claims to anyone other

than the person that paid § 4081 tax on the dyed fuel to which the claim relates.