How IFTA audits work
- Every member jurisdiction audits a set percentage of accounts on a rolling basis. Audits can be random or targeted when filings look inconsistent.
- Auditors test your distance and fuel systems and will request source data. If your records are presented in a format they cannot audit, the records are considered not available.
- If records are inadequate for the fleet as a whole, the base jurisdiction must assess additional tax using a reduced MPG or a standard factor.
Keep originals and exportable data. Maintain GPS data in a spreadsheet format, not only images or PDFs, and keep receipts and bulk fuel records organized by vehicle, jurisdiction and quarter.
Records you must keep
| Area | What auditors expect | Key rules |
|---|---|---|
| Retention | Keep all IFTA distance and fuel records for four years from the return due date or the filing date, whichever is later. Be prepared to make records available to any member jurisdiction. | P510 Retention and Availability of Records |
| Distance — paper or dispatch based | Trip records that show start and end dates, origin and destination, route of travel, beginning and ending odometer or hubodometer, total trip distance, distance by jurisdiction, and the vehicle identifier. | P540.100 Distance Records |
| Distance — GPS or ELD based | Readings created at least every 10 minutes when the engine is on. Each record must include timestamp, latitude and longitude to at least 4 decimals, and ECM odometer. If no ECM odometer is available, capture beginning and ending dashboard odometer or hubodometer for the trip. Data must be exportable to CSV or similar. Static images or PDFs are not acceptable as the primary record. | P540.200 GPS Data Elements and Formats |
| Fuel — retail purchases | Valid receipts or transactional listings that show date, seller name and address, number of gallons or liters, fuel type, price, and the vehicle or unit. Altered or illegible documents are not allowed for tax paid credit. | P550.200 and P550.300 |
| Fuel — bulk storage | Delivery receipts, tank capacities, quarterly inventory reconciliations, and withdrawal logs for each tank and location. | P550.400 and P550.500 |
| Cut off alignment | When you use a consistent monthly or weekly cut off that does not delay taxes, always use the same cut off for both distance and fuel. | P540.300 and P550.800 |
If records are inadequate. The base jurisdiction will either set fleet MPG to 4.00, or reduce your reported MPG by 20 percent. This applies when records for the fleet are not sufficient or appropriate, or when no records are provided after a written demand.
Penalties and interest
- Late filing or underpayment results in a penalty of 50 dollars or ten percent of the unpaid tax, whichever is greater. Many states publish this rule directly.
- Interest accrues monthly on unpaid tax at an annual rate that is two percentage points above the IRS underpayment rate, recalculated each January one.
- Repeated non filing or non payment can trigger suspension or revocation of your IFTA license.
Primary sources and guidance links
Primary sources. IFTA Procedures Manual sections P510, P530, P540, P550, P570. IFTA Articles of Agreement on penalties, interest and assessments. State guidance pages provide applied rates and audit practices. Links are included in the web version of this guide.
Educational use. This guide is not legal advice. Always verify the current rules with your base jurisdiction.