IFTA Audits: What to Do When the Examiner Calls

IFTA Audit: Don't Panic, Prepare!

An International Fuel Tax Agreement (IFTA) audit can feel like a punch to the gut for any owner-operator or truck driver. The thought of your records being scrutinized can be daunting. But with proper preparation and a clear understanding of the process, you can navigate an IFTA audit with confidence. This guide will walk you through what to do when the examiner calls, how to prepare, and what your rights are.

The Examiner Calls: What Now?

So, you receive a call or a letter informing you of an upcoming IFTA audit. Here's what to do immediately:

1. Don't Panic: Take a deep breath. An audit doesn't automatically mean you've done something wrong. It's a routine procedure.
2. Verify the Auditor's Credentials: Ask for the auditor's name, title, agency, and contact information. Verify their identity by contacting the relevant IFTA jurisdiction. This protects you from scams.
3. Understand the Scope: Ask the auditor about the specific periods being audited. Usually, audits cover a specific quarter or year.
4. Request Information About the Audit Process: Inquire about the audit process itself. What records will they need? Where will the audit take place (your office, their office, or remotely)? What is the estimated timeframe?
5. Politely Set a Date: Agree on a date and time that works for both of you. Don't feel pressured to schedule the audit immediately. Give yourself time to prepare.

Preparing for the IFTA Audit: Getting Your Ducks in a Row

Thorough preparation is the key to a smooth IFTA audit. Here's what you need to gather:

• IFTA Licenses and Cab Cards: Ensure you have copies of your valid IFTA licenses and cab cards for the period being audited.
• Fuel Receipts: This is crucial! Collect all fuel receipts for the audit period. Receipts must include the date, place of purchase, gallons purchased, fuel type, and seller's name and address. Incomplete or missing receipts are a red flag.
• Trip Logs/Mileage Records: Maintain accurate trip logs showing the date, origin, destination, routes traveled, and total miles driven in each jurisdiction. GPS data, ELD records, and handwritten logs are all acceptable forms of trip documentation, as long as they are accurate and consistent.
• Vehicle Information: Have information about the vehicles operating under your IFTA license, including VINs, license plate numbers, and registered gross vehicle weights (GVWR).
• IFTA Returns: Compile copies of the IFTA returns you filed for the audit period.
• Spreadsheets/Summaries: If you use spreadsheets or other summaries to compile your IFTA data, have them readily available.

Organization is Key: Organize your documents clearly and logically. Consider creating separate folders for each quarter or jurisdiction. This will save you (and the auditor) time and frustration.

During the Audit: Cooperation and Clarity

During the audit, keep these points in mind:

• Be Cooperative: Answer the auditor's questions honestly and to the best of your ability. A cooperative attitude can go a long way.
• Provide Only What's Requested: Don't volunteer information that isn't asked for. Stick to the scope of the audit.
• Don't Guess: If you don't know the answer to a question, say so. Don't guess or speculate.
• Keep a Record: Maintain a record of all documents you provide to the auditor.
• Take Notes: Take notes during the audit, including the date, time, auditor's name, questions asked, and your responses.
• Ask for Clarification: If you don't understand a question, ask the auditor to clarify.

Your Rights During an IFTA Audit

It's important to know your rights during an IFTA audit:

• Right to Representation: You have the right to have a representative (e.g., an accountant, lawyer, or IFTA consultant) present during the audit.
• Right to a Fair Audit: You have the right to a fair and impartial audit.
• Right to Appeal: If you disagree with the audit findings, you have the right to appeal. The specific appeal process varies by jurisdiction.
• Right to Confidentiality: Your financial information is confidential and should be treated accordingly by the auditor.

After the Audit: Review and Action

Once the audit is complete, the auditor will provide you with a report outlining their findings. Review the report carefully.

• Understand the Findings: Make sure you understand the auditor's findings and any assessments for additional taxes, penalties, or interest.
• Dispute Discrepancies: If you disagree with the findings, gather supporting documentation and file an appeal according to the jurisdiction's procedures.
• Implement Improvements: Regardless of the outcome, use the audit as an opportunity to improve your record-keeping and IFTA compliance practices.

Preventative Measures: Staying Compliant

The best way to handle an IFTA audit is to avoid problems in the first place. Here are some tips for staying compliant:

• Maintain Accurate Records: Keep accurate and complete records of all fuel purchases and mileage.
• File IFTA Returns on Time: File your IFTA returns by the due date each quarter.
• Use IFTA Software: Consider using IFTA software to simplify record-keeping and reporting.
• Stay Updated: Keep up-to-date on IFTA regulations and requirements.

An IFTA audit doesn't have to be a nightmare. By understanding the process, preparing thoroughly, and knowing your rights, you can navigate an audit successfully and keep your trucking business on the road.