As a carrier, you are navigating all the time, but when it comes to navigating your IFTA fuel tax liabilities, it can be easy to take a wrong turn.
I’ve been helping fleets and owner operators fulfill their IFTA fuel tax reporting obligations for more than 35 years with DAT Fleet Compliance (formerly TransCore Fleet Compliance), which is now an official member of the DAT Solutions family.
Over the years, I’ve seen businesses make a lot of mistakes, as the tedious paperwork and rules can be hard to keep up with. Here are some of the most common mistakes we see when it comes to IFTA fuel tax reporting:
1. Using log books instead of daily trip reports: This can be problematic since log books do not capture all of the information required for preparing quarterly fuel tax reports. In addition, there are different retention requirements for log books and trip reports.
2. Failure to keep receipts for all fuel purchases: You must collect and retain detailed fuel receipts or invoices from a third party vendor for four years.
3. Failure to meet retention requirements: Many times companies both large and small are not familiar with the ITFA/IRP regulations. Remember, motor carriers are required to keep IFTA tax returns, along with trip reports, fuel receipts and other supporting documentation, for four years from the applicable due date.
4. Sloppy and/or incomplete trip reports: Trying to make out chicken scratch can be a major headache. Check your paperwork to make sure it is complete and legible. Fill in any blanks, correct any errors and clarify any sloppy handwriting to avoid issues.
5. Use of dispatch systems to calculate miles: The problem with using dispatch systems to calculate your IFTA taxes is a dispatch system calculates miles from pickup of goods to delivery. It does not capture the miles driven to the pickup point or after the delivery is made, which results in unreported miles.
6. Not reporting personal or unloaded miles: Remember, all miles must be recorded, whether loaded, empty or bobtail.
7. Using GPS when the device is not IFTA compliant: An IFTA compliant device must be able to produce a data file which contains the latitude and longitude and odometer reading from the J-bus. Some devices are erroneously advertised as IFTA compliant, so make sure you do your homework when purchasing new units.
8. Not filing miles in the correct quarter: The first priority in the trucking business is moving freight. Many times carriers get so caught up with this aspect of their business they find themselves attempting to prepare their quarterly taxes at the last minute without capturing the last couple of trips in the quarter. These carriers typically report those unreported miles the following quarter. While there is no malicious intent, the fact remains that all miles traveled and gallons purchased in a quarter must be accurately reported. This simple misapplication can result with unfavorable results in an audit.
If you’re ready to take the next step and eliminate costly mistakes in your IFTA fuel tax reporting, DAT Fleet Compliance can help. When you send our team your trip sheets, we will audit them for accuracy and enter the data into our system, or you can provide data from your IFTA compliant GPS tracking system (we’ll help you determine if it is indeed compliant).
We then process the data and retain it for as long as regulations require. Of course, your data isn’t just sitting there. We also analyze it and create reports that give you a clear picture of your fuel and mileage tax liability, which you can access securely online, anytime, anywhere.
DAT Fleet Compliance also provides: titling and vehicle services, permitting and registration, qualifications and driver Services, and fleet asset management.
