Although the penalty should have been waived, due to reasonable cause.......owner not being a "professional preparer and not properly interpreting the instructions". 

"First use" is by the owner......the first time in that truck's life for that owner.  Thereafter, report is due.......August 31........with tax based on the PROJECTED use for the next 12 months.  If that use did not occur..........like thinking the truck would be used commercially, but it ended up being owned farm products only.........get refund at end of filing period.

The ag exemption.............since this is a classification change, don't have to file until the month after the month of classification change.........then pay the tax...........ie in the event that a truck starts the reporting period as an ag truck, and then becomes commercial............but there has to be a demonstrable intent to be solely ag, with ag being the production business of the owner.

"miles on the farm"----------as told to me by the IRS personnel in.......whereever the forms are sent.....North Carolina????......anyway, the "help" no..............means miles OFF highway, ie running around in the fields.  Therefore, I decided to crap can keeping track of those, and merely go off the odometer as highway miles.

I don't recall there being a category for exempt commodities.........just ag commodities which have to be owned by the truck owner, and used in the owner's ag production business........ie no buying/selling corn and calling oneself  a farmer.

For what it is worth.......I think the 2290 is not one of IRS' better forms.........most of their forms are for group purposes, ie for the "group of events" for a given taxpayer..........2290 is "per item" basis, with IRS merely allowing the use of one form for reporting a group if reported for the year, ie in August.  Rest of the time, it is supposed to be one form for an individual item change---------piece of crap to keep track of.  In the ones we have amended, or first use due to additional truck-------I include ALL trucks previously reported as supplementary information, so that I can pick up any of the forms that are filed and have all the information..........and so IRS can see that we have reported everything.........and so they can catch any mistakes that I might make-----whioh happened 2-3 years ago, and a very nice lady called me and pointed out the error, "...just so you won't make it again."

Also, the 2290 is for the PROJECTED use for the oncoming year........I can think of no other IRS form that is a final tax-computing form that is for PROJECTED use/tax computation.

Seldom would I go to the IRS office for assistance or filing---------too much chance of running into "James Bond".......and I have found that the office personnel------the office auditors-------are usually MUCH more along the p......k side than the field agents..............so, better to call the help numbers in the instructions, and get those who deal with the "usual problems" daily, and just want to get things done as quickly and painlessly as possible----for everyone.  Further, the office personnel might not deal with the particular form a lot, and therefore are in reality expressing their opinions-------which goes on more than one would care to recognize.

Sounds like your neighbor ran into one of the "needle dicks"........that penalty could/should have been waived.

(I just read Dave's............I am saying what he already said.)