Heavy Highway Vehicle Use Tax Collection

TIGTA audit reviews effectiveness of IRS processing of Heavy Highway Vehicle Use Tax Return [Audit Report No. 2008-40-089]:

The IRS should encourage more states to participate in its Alternative Proof of Payment Program for the collection of the Heavy Highway Vehicle Use Tax (also known as the Heavy Vehicle Use Tax), the Treasury Inspector General for Tax Administration (TIGTA) said in a recent audit.

The tax is a federal highway use tax paid annually on vehicles with a taxable gross weight of 55,000 or more pounds, designed to carry a load over public highways, and expected to be used more than 5,000 miles (more than 7,500 miles for agricultural uses). Typically, after a taxpayer files Form 2290 (Heavy Highway Vehicle Use Tax Return) and pays the tax, IRS stamps the Schedule of Heavy Highway Vehicles (Schedule I) of the form to show payment was received and returns it to the taxpayer for use as proof of payment for vehicle registration.

The Alternative Proof of Payment Program is based on an agreement between IRS and a state department of motor vehicles that allows taxpayers to simultaneously file Form 2290, pay the tax, and register their vehicles.

The program has been in place for 10 years but only 11 states participate, TIGTA noted. “Although guidelines for the program authorize a state department of motor vehicles to accept Forms 2290 with related payments to register vehicles, the IRS has not regularly pursued expansion of this program,” TIGTA said. The audit is located at http://treas.gov/tigta/auditreports/2008reports/200840089fr.pdf

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