>Why is it that if you wait 6 months to install the tax goes
>away. What happens if after taking ownership of a truck you
>install a tag a week or two later? Don't ask don't tell?
>You sill pay 12% but just on the price of the tag, right?
It's a bit more serious than that, or at least potentially so. When spec'ing our our new truck, we considered lift axle and tax issues. I guess I'm too much of a boy scout or coward to try to evade FET.
I learned that taking deliberate action to dodge FET tax that would otherwise be due is called tax evasion. It's a crime and probably a felony because of the dollar amount involved. The dollar amount may be high enough to attract IRS enforcement agents' attention. In the post-911 era, a felony conviction can put your HAZMAT endorsement at risk, which in turn would put your expediter career on the same uncertain footing, since most expedited carriers require HAZMAT endorsements. Carriers also think twice about adding or keeping felons in their fleet.
If you are caught adding a lift axle later for the purposes of avoiding FET, you will at a minimum be required to pay the tax itself, plus penalties and interest. Criminal charges (tax evasion) may also come into play.
How might you get caught when the IRS seems to take little interest in the practice and has historically done little if anything about it? There are people out there that will turn you in.
Some may be angry at you for one reason or another. Fleet owners that have or may in the future have disgruntaled drivers are especially vulnerable to that. Others might act out of jealousy where you have a nice new truck and they don't. Others may see it as a way to bump a competitor out of the business (it's not logical, I know, but there's no accounting for other peoples' perceptions). Still others may act out of a sense of civic duty believing everyone should pay their fair share. They may look at the pot hole on their road with some irritation that you have not paid the money due. Even the truck dealer down the road may turn you in, upset that your dealer and his competitor is gaining a price advantage by turning a blind eye to the FET laws the compiant dealer observes.
Yet another scenerio is a policy shift or initiatiave where the IRS partners up with state scale cops and start asking for receipts showing FET tax paid. We've been stopped at scales by federal IRS agents before (they specifically identified themselves as such). They stuck sticks in our tanks to check for red dye in the fuel. If they can do that, they can easily start checking for FET compliance as well. All it would take is them identifying trucks with add-on lift axles and requiring owners to provide FET documentation at a later date. Or, as databases improve, the day may come within the lifetime of our truck when an IRS agent at a scale can pull up our VIN on a computer and check the tax paid against the current configuration of the truck.
Considering all of the above, and given my predispotion toward compliance anyway, it did not take me long to rule out adding a lift axle to the truck at a later date. For Diane, it was never even an option to consider. A felony charge does not bode well for the law license she still holds. We'll pay FET. We won't especially enjoy doing so, but we'll feel much better doing that than looking over our shoulder for the IRS agents every day.
