Biodiesel board on the lookout for possible tax scam

| Thursday, April 26, 2007

The National Biodiesel Board is looking into possible abuse of the federal tax credit offered to biodiesel producers.

In a news release, the board said it has recently become aware of a scheme in which foreign companies send tanker shipments of biodiesel into the U.S., blend it with diesel, claim the tax credit, then export it outside of the U.S.

The board said that so far, there is no proof that this scheme is taking place, but there is “anecdotal evidence to support it.”

The credit in question may not be available for biodiesel that is involved in these types of transactions under current rules, but the board is looking into legislation or rulemakings that will further clarify the issue.

The board is also working closely with the EPA and the IRS to launch a formal investigation into the practice.