Case: U.S. District Court Upholds IRS’s Interpretation in Butane-Gasoline Fuel Credit Dispute

The U.S. District Court held that the IRS was entitled to judgment regarding taxpayers’ claims for alternative fuel mixture tax credits for blending butane with gasoline. Taxpayers, petroleum companies, sought refunds of federal excise taxes based on the alternative fuel mixture credit in IRC §6426(e) for blending butane with gasoline. The court held that butane is a “taxable fuel” rather than an “alternative fuel” under the relevant statutory provisions, and therefore a mixture of butane and gasoline does not qualify for the alternative fuel mixture credit. The court rejected the taxpayers’ arguments that butane could be both a taxable fuel ...