26 U.S.C. § 6715 — Dyed fuel sold for use or used in taxable use, etc.

(a) Penalty. A person must pay a penalty in addition to any tax if: (1) the person sells dyed fuel, or holds dyed fuel for sale, for a use that the person knows or has reason to know is not a nontaxable use of the fuel; (2) the person holds dyed fuel for use or uses it for a use other than a nontaxable use, and the person knew or had reason to know that the fuel was dyed; (3) the person willfully alters, chemically or otherwise, or tries to alter, the strength or composition of any dye or marking put into dyed fuel under section 4082; or (4) the person knows that dyed fuel was altered as described in paragraph (3) and sells it, or holds it for sale, for a use that the person knows or has reason to know is not a nontaxable use of the fuel. (b) Amount. (1) General rule. Except as provided in paragraph (2), the penalty for each act under subsection (a) is the greater of (A) $1,000 or (B) $10 for each gallon of dyed fuel involved. (2) Multiple violations. To determine the penalty for a person under subsection (a), increase the $1,000 amount in paragraph (1)(A) by that amount multiplied by the number of prior penalties, if any, imposed by this section on that person, a related person, or a predecessor of that person or related person. (c) Definitions. For this section: (1) “Dyed fuel” means any dyed diesel fuel or kerosene, whether or not the fuel was dyed under section 4082. (2) “Nontaxable use” has the meaning given to that term by section 4082(b). This section does not define either term further. (d) Joint and several liability of certain officers and employees. If a penalty is imposed on a business entity under this section, each officer, employee^*, or agent of the entity who willfully participated in an act that led to the penalty is jointly and severally liable with the entity for the penalty. (e) No administrative appeal for third and later violations. If a person is found to be subject to the penalty after a chemical analysis of the fuel, and the person has been penalized under this section at least twice after this subsection was enacted, no administrative appeal or review is allowed for that finding, except for a claim about fraud or mistake in the chemical analysis or about the mathematical calculation of the penalty amount.