Preparing for IFTA Audit
The International Fuel Tax Agreement (IFTA) was designed to be a uniform tax regime for the administration of international taxation of fuel. All IFTA member states must provide accurate, timely, and complete reports to the Internal Revenue Service stating the annual gallons of fuel purchased and used during the year; this includes the purchase price and the total number of miles driven.
Why an IFTA Audit?
There are many reasons why an IFTA audit may be conducted. The most common reason is to ensure that fuel tax is being reported and paid correctly. This includes verifying the accuracy of fuel receipts, trip records, and other documentation. An IFTA audit may also be conducted if there is a suspicion of fraud or non-compliance with IFTA rules and regulations.
How to prepare for an IFTA audit?
The best way to prepare for an IFTA audit is to keep accurate records of your fuel usage and distance summary. Most importantly, maintain detailed files of all your supporting documentation. Be sure to have your most recent IFTA license and decals on hand, as well as copies of your fuel receipts, trips, logs, and mileage records. If you use an ELD to track your mileage, be sure to have a printout of your mileage for the audit period.
If you are selected for an audit, the auditor will want to see proof of purchase for all the fuel you used during the audit period. They will also want to see trip logs or other documentation that proves how much distance you traveled in each jurisdiction. Be prepared to answer questions about your business operations and provide any other documentation that may be requested.
If you are organized and keep good records, an IFTA audit should not be a difficult or stressful experience. Just be sure to allow yourself enough time to gather all the required documentation before the audit arrives.
What things will the auditor look at?
Auditors who review your IFTA records will look at a few key things to ensure compliance.
They will want to see your fuel receipts and invoices to verify the accuracy of the reporting.
They will want to see your trip logs and other supporting documentation to ensure you are correctly recording your travel.
The auditor will want to see your license and permit information to confirm that you are authorized to operate in the jurisdictions you are reporting for.
Preparing these documents and records can help ensure a smooth and successful audit.
How can you prevent undergoing an IFTA Audit?
Keep accurate and up-to-date fuel purchases and vehicle mileage records.
Make sure your vehicles are properly registered with the correct jurisdiction.
Pay your IFTA fees on time and in full.
File your quarterly IFTA reports accurately and on time.
What happens when you don’t send IFTA reports?
It is important to stress the potential consequences for trucking companies that fail to submit their IFTA reports. Carriers may face fines or even closure if they fail to submit their reports, which would be considered tax evasion.
Carriers that fail to submit their reports on time are penalized $50 or 10% of the entire net tax payable with their return, whichever is greater.
The bottom line to passing a compliance audit is to have everything you need. To ensure you'll be ready for any compliance audit, partner with Vallon Consulting's expert team of transportation consultants and solutions providers. Our years of experience in the compliance industry will ensure that you have everything you need to pass your next audit.
Do you have a hard time keeping up with record keeping?
If you aren’t currently using an ELD because you’re exempt from using one, think about getting one. It can simplify the process of your record-keeping requirements.
If you are not using a fuel card, consider getting one or more. Fuel cards will save you money at the pump and provide a platform to keep up with receipts.
Different ways we can help:
Provide you with Fuel Card Solutions
Provide you with ELD solutions
Business and/or Compliance Consultations
Compliance Maintenance Solutions
Mock Audit to Prepare you for your IFTA Audit
When you are prepared for an audit, you will have a better chance of passing it. Your records are your only backup in an IFTA audit, and When your records are accurate and secure, your business will be too!
About Vallon Consulting LLC: Vallon Consulting is A Full-Service Trucking Consulting Company that tackles some of the most critical challenges and obstacles in the trucking industry. Our diverse global team is passionate about helping carriers and fleet managers meet their goals and ensure business stability. We do this by providing services, solutions, resources, and education.
At Vallon Consulting, We Take A “No Carrier Left Behind” Approach. Our Mission is to provide services and resources that address our client’s unique needs. You can learn more about us online at www.vallonconsulting.com and stay tuned with industry updates by following us on Instagram, LinkedIn, Facebook, and Twitter.
