IFTA Audit Manual Notes

IFTA Audit Manual Notes 

Below are notes taken from the IFTA Audit Manual available for download at http://www.iftach.org/manuals/2012/AM/Audit%20Manual%20January%202012%20FINAL.pdf

• Base jurisdictions are required to audit an average 3% per year of IFTA accounts within their jurisdiction.
  • At least 15% of those selected must be "Low-Distance" accounts—the 25 percent of the previous year's licensees who had the lowest number of miles/kilometers reported in all member jurisdictions.
  • At least 25% of those selected must be "High-Distance" accounts—the 25 percent of the previous year's licensees who had the highest number of miles/kilometers reported in all member jurisdictions.
     
• If the licensee's records are lacking or inadequate to support any tax return filed by the licensee or to determine the licensee's tax liability, the base jurisdiction shall have authority to estimate the fuel use based on (but not limited to) factors such as the following:
  • Prior experience of the licensee;
  • Licensees with similar operations;
  • Industry averages;
  • Records available from fuel distributors; and
  • Other pertinent information the auditor may obtain or examine.
     

• If the licensee's operational records are not located in the base jurisdiction and the base jurisdiction's auditors must travel to where such records are maintained, the base jurisdiction may require the licensee to pay the base jurisdiction per diem and travel expenses incurred by the auditor(s) in performance of such an audit.

• Member jurisdictions may request copies of the audit reports and work papers. A copy of the audit report, work papers, supporting documentation, and any pertinent post-audit communications must be maintained by the base jurisdiction as part of the audit file.

Miscellaneous Notes 

• In many jurisdictions, any statement or gesture made to an audit employee that seems remotely like a threat—even a statement made in jest—will often be referred to the jurisdiction's office for investigation.
   
• Many jurisdictions have a policy preventing their employees from accepting any type of gift, including meals.
   
• An auditor may ask for copies of documents or to make a copy of a document. You have the right to view and validate or invalidate any document or record found by the auditor. The law states that auditors may examine documents, but they do not have the right to demand copies.
   
• Trucking companies only have to deal with audits from a single jurisdiction—the jurisdiction where their trucking company is based.
   
• Fines are generally assessed for failure to perform a function such as practicing timely filing procedures or maintaining proper records.
   
• Effective July 1, 2013, the IRS Underpayment Rate is 3% of money owed, and late payments are subject to IFTA Annual Interest Rate of 5% (.417% per month). Interest on taxes owed shall be set at an annual rate of two (2) percentage points above the underpayment rate established by the Internal Revenue Code. Interest shall accrue monthly at 1/12 this annual rate.