5 Things to Remember in IFTA Fuel Tax Audit

IFTA audits can be complex; no one wants their IFTA report to be audited. But as per the records, 3 percent of IFTA reports are audited under the jurisdiction. The IFTA generally audits the reports randomly and select any reporting errors if any. But if you had checked your checkpoints then you will not need to worry about the audits. Here are the 5 things compiled that you can remember in IFTA audit.

When your fleet is selected for IFTA audit, the following process will look like below. The owner will get the notification that the fleet will be audited. Within the span of 30 days, an auditor will be assigned to you. The auditor may ask some preliminary questions about the fleet, it is advisable to keep that handy. The record summaries like fuel statements, mileage statements and receipts need to be shared with auditors for auditing.

The auditor will verify the accuracy like the miles travelled during the reporting quarter. Auditors will visit your organisation and look for any inaccuracies like the fuel reported without any logged miles, inaccurate mileage etc. When the IFTA audit is complete you may need to choose any actions based on audit results. Actions include no action if no discrepancies have been found, accept the results and make the payment or challenge if you disagree with the reports. In case of disagreement, you may want a detailed audit or request a new auditor.

The IFTA audits are meant to be filed four times a year and hence the deadlines always seem to sneak and you might get distracted or miss the deadline. However, that’s the mistake to avoid. Submitting the report late includes $50 penalty or 10% of the net tax liability, whichever is greater. It may also increase your chances of an IFTA audit. The process of IFTA fuel tax calculations is really time-consuming. Until, unless you are using software to do so. It is very tempting to do estimation when filling up a large report.

However, that is the mistake you would like to avoid. You need to give proper figures accurately. Incorrect calculations can raise doubt and may lead to an IFTA audit. One common mistake the fleet owners make is not including personal miles. If you don’t record the personal miles then there will be mileage gaps in the records, which is avoidable. Any discrepancy can raise red flags during an IFTA audit. If there are issues with odometer then you should correct it.

Issues with an odometer or GPS tracking can affect the IFTA reported figures and hence you should make a note of any such incident. There are high chances of error or inconsistencies in calculation fuel taxes, if you are using a manual method to record in the system. To minimise the error it is advisable to use the best software. The software will automatically improve operational efficiency, calculate the distance travelled, and remove any inconsistency and clerical errors.

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