IFTA Audit Checklist: Prepare for Your Next Audit with Confidence

IFTA Audit: Are You Ready?

As an owner-operator or truck driver, understanding and adhering to the International Fuel Tax Agreement (IFTA) is crucial. One of the most daunting aspects of IFTA compliance is the possibility of an audit. A successful IFTA audit depends on accurate records and a thorough understanding of the requirements. This checklist will help you prepare, stay compliant, and face your next audit with confidence.

Understanding the IFTA Audit

An IFTA audit is an examination of your fuel tax records to ensure you’ve accurately reported and paid your fuel taxes. Auditors want to verify that the miles you've traveled in each jurisdiction and the fuel you've purchased are correctly documented. Failing an audit can result in penalties, interest, and potentially even suspension of your IFTA license.

IFTA Audit Checklist: Your Step-by-Step Guide

Here's a comprehensive checklist to help you prepare for your IFTA audit:

1. Review IFTA Requirements: Ensure you fully understand the IFTA regulations for each jurisdiction you operate in. Stay updated on any changes or updates to the regulations. The IFTA website and your base jurisdiction's motor vehicle department are excellent resources.
2. Gather Mileage Records: This is the foundation of your IFTA reporting. You must maintain accurate records of all miles traveled in each jurisdiction. Acceptable mileage records include:
   • Trip reports (driver logs, trip sheets)
   • GPS data
   • Electronic Logging Devices (ELDs) – ensure data is easily accessible and auditable

   Your records should include:

   • Date of trip
   • Origin and destination of the trip
   • Route of the trip
   • Total miles traveled
   • Miles traveled in each jurisdiction
3. Collect Fuel Purchase Records: Keep all fuel receipts. These receipts are essential for verifying the amount of fuel you purchased in each jurisdiction.

   Each fuel receipt should include:

   • Date of purchase
   • Name and address of the seller
   • Number of gallons purchased
   • Type of fuel
   • Vehicle identification number (VIN) or unit number
4. Reconcile Mileage and Fuel Records: Compare your mileage records with your fuel purchase records. Look for any discrepancies and investigate the reasons behind them. For instance, a significantly higher fuel consumption in one jurisdiction might indicate inaccurate mileage recording or fuel theft.
5. Review IFTA Returns: Go over your previously filed IFTA returns. Verify that the information on the returns matches your mileage and fuel records. Correct any errors or omissions.
6. Maintain Records Securely: Keep all your IFTA records for at least four years from the date the return was filed, as this is the standard audit period. Store your records in a safe and organized manner, whether digitally or physically. Back up digital files regularly.
7. Check for Out-of-State Purchases: Verify that you have reported all out-of-state fuel purchases, as these are critical for IFTA compliance.
8. Verify Odometer Accuracy: Ensure your odometer is accurate and properly calibrated. Inaccurate odometer readings can lead to significant discrepancies in your mileage records.
9. Prepare for Questions: Anticipate potential questions from the auditor. Review your records and prepare explanations for any unusual patterns or discrepancies.

Tips for a Smooth IFTA Audit

• Be organized and prepared.
• Cooperate fully with the auditor.
• Answer questions honestly and accurately.
• If you're unsure about something, ask for clarification.
• Don't try to hide anything. Transparency is key.

What to Do If You Disagree with the Audit Findings

If you disagree with the auditor's findings, you have the right to appeal. Follow the instructions provided by the auditor or your base jurisdiction to file an appeal. Make sure to gather all supporting documentation to support your case.

Stay Ahead of the Game

Preparing for an IFTA audit doesn't have to be stressful. By following this checklist and maintaining accurate records throughout the year, you can face your next audit with confidence. Remember, proactive compliance is the best way to avoid penalties and keep your trucking business running smoothly.