IFTA audit - any ifta attorney's ?

The audit should have an explanation of the adjustments page. This should tell you what the problems are. You can protest the audit without an attorney by writing a protest with details why the audit is incorrect and provide documentation. Why would you want an attorney to look at the audit? Wouldn't it make more sense to have an accountant look at the audit? If the problem is that you don't have any real mileage or fuel documentation, don't bother with either and just pay up. My guess is you don't have proper documentation given the route comment. The audit assessment would have resulted from unreported gallons or gallons transferred from one jurisdiction to another based on a change in jurisdictional mileage percentages. CA has a MUCH higher tax rate than NV so transferring miles could result in an assessment.

What does having the same routes everyday have to do with anything? If you stated the drivers completed their trip reports and recorded all fuel every day without fail, then there shouldn't have been any problems.

I'm not sure what you mean by fine. IFTA audits are made up of assessment, interest and penalty. The interest is because the tax was due in a previous period and not paid. You have a debt for which any company would charge interest. A interest rate of 11% is very reasonable. Most states cannot waive interest. A penalty is up to the individual jurisdiction to determine based on the reasons for the assessment. Penalty is a punishment for poor record keeping or intentional under payment of taxes. Usually there is a tiered system on assessing penalty. Quite honestly, penalty is probably the only thing that you have any hope of removing from this audit.

As for the what is wrong with this country...The government is required to make sure that all companies are fairly paying their share of taxes. In order to do that companies' records are audited. When companies owe taxes from previous periods as determined in the audit, the government has lost the use of that tax money during the period it was owed and had to expend money to collect the amount duly owed. The penalty is to make sure it is not profitable for businesses to deliberately under report amounts owed.

Personally having been on the other side of this fence as the auditor, I'd like to know what is wrong with companies that they do not educate themselves on the record keeping requirements or choose not pay someone who is educated to keep the records? Every other company with an IFTA account has to follow the same record keeping requirements and spend the time and money to do so. I may be wrong but it really sounds like your company didn't keep records because it was a route. If that is the case, you cut corners that bit you.

 

I think the problem is that a lot of government representatives forget who the customer is, and often get on a power trip or just assume that everyone who ever makes a mistake is a fraudster. Often that very person has never and will never take the risk of going into business and will never understand the motives of those that do.

Nothing personal, but the government is the only "business" besides organized crime that can collect with the threat of prosecution or imprisonment, and has the power to shut your business if you get on the wrong person's bad side.

Other than that, I like what you've contributed so far and hope we don't get you mad enough with our contradictions to quit.

 

I do understand your opinion of auditors. I dealt with it for over 2 decades. I rarely told people for whom I worked or my job title. My husband was fired from a job after his boss found out what I did for a living. I have a tough skin. I've been yelled out, cussed at, blamed for trying to shut down businesses, treated badly and socially shunned. I have always been professional and tried to make sure that taxpayers understood their problems and record keeping requirements. In many cases, my taxpayers commented that I was NOT what they expected. Frankly, I am no longer an auditor because I did not like how the department was treating taxpayers and reducing everything to a number.

Interestingly, most of the auditors that I worked with did understand that most business are trying to do everything including accounting with not a lot of knowledge. As a general rule, most taxpayer's are honest and want to fulfill their reporting obligations. Most times if the taxpayer is educated then they usually comply. I and most of my fellow employees tried to be understanding and had some latitude in whether or not things were material. Unfortunately, the auditor has to follow guidelines set from above with more and more time frames and restrictions. Of the 20+ special tax auditors (excise tax) with whom I worked, only one was really out to get taxpayers. Most of us where hoping that the taxpayer had very good records because it meant a LOT less work and easily fit within the hours that were allowed for the size of the taxpayer. You might be surprised at the number of times the auditor goes to bat for taxpayers. Taxpayers can learn a lot from the auditor if they ask questions and LISTEN. When I started auditing, the attitude of the department was to fairly audit the taxpayer with respect and educate them so that they would not hate the government and comply voluntarily. Unfortunately, that has changed to meet the minimum requirements as quickly as possible with the least leeway.

That being said, business many times don't want to keep the records required. They didn't want to do the work everyone else was. They don't even try. They go for years without paying their fair share of taxes then complain and blame the government when audited and billed. During the time that they don't keep the records, cut corners and keep tax money that should have been paid. From the auditor side it seems like they really gambled and probably won on the years they didn't get audited.

Hopefully, I might help some people to understand the record keeping and auditing side of IFTA and IRP even though I worked on the other side of the fence. Maybe.

 

Sly Fox, I find your response of "why are you blaming the government for this" a bit amusing and maybe you have an "inside" as to your position. I have been embroiled in an IFTA audit since November of 2011 and the state government is at fault as they are just trying to balance their budget on the backs of the small trucker/company. Let me just give some brief info into my scenario. I live in Texas and I own two trucks. I am NOT an over the road trucking company but an aggregate hauler that lives in close proximity to the state line and must participate in IFTA. I have kept all of my records and filed all of my reports in a timely manner. The auditors do not understand aggregate hauling and are insitent on trying to fit my aggregate hauling operation into an over the road freight hauling mold. The state uses ProMiles as it's mileage checker and ProMiles only has data for commercial and urban areas; rural aggregate pits cannot be located with ProMiles software and therefore the location reverts to the center of the billing zipcode. This has the effect of "losing" sometimes up to 50% of the mileage on a "trip". I am also not required to run logbooks because my trucks are day trip trucks traveling within a 100 mile radius. There are several fuel stops that do not transmit gallons purchased to the fuel card company. My husband and other driver kept the receipts from those fuel stops and I matched them on the bill with the date, time, location and dollar total to show the gallons purchased. The auditor says those purchases were not to be counted because the gallons were not printed on the actual bill and it was not acceptable to attach the printed receipt showing the gallons purchased. I travel in two states and two states only; Texas and Oklahoma. Texas is my base state. All of my OK mileage has been documented by odometer readings and includes all of the incidental mileage within the pits. I pay tax on EVERY mile my trucks run. I do not run a logbook nor do I keep turn by turn directions for all of the travels within the state of Texas which is my base state. My IFTA mileage is a very simple grade school math equation: total mileage less OK mileage equals Texas mileage. All of the money goes to Texas and they only need to verify the OK mileage to ensure the fuel tax is correctly apportioned to OK. They refuse to accept my odometer readings; they refuse to accept many of my fuel purchases and they flat out do not understand how aggregate hauling works. I have until the 20th of this month to recreate turn by turn directions for the three quarters they chose to sample audit. They have fined me and charged penalties and interest (to the tune of $8500) because they cannot get the mileage to match through ProMiles. They refuse to provide supporting documentation from the auditor as to where he arrived at the mileage figures he created. He basically wrote a fictional novel on my company and I am expected to just roll over and hand them the money. I cannot imagine the results of these other aggregate haulers up here in north Texas as none of them keep any kind of records. SO with a similar scenario to the lady you slammed on this blog, do you feel I , too am falsely blaming the government? I paid my taxes and refuse to pay again on what I have already paid. And I really would like to find an attorney that understands IFTA and aggregate hauling.

 

and on top of everything wlse they do not want to accept, they won't accept my odometer readings because they are not in a log book. I really feel like there is more common sense in the wall I am looking at then at the auditor's office.

 

I know I have read this before. Have you posted on another forum?

I don't have your information or audit, but IFTA regulations do not state that all mileage information has to be in one document. The regs state you have to have it for mileage. You have the right to see how the miles were calculated. I would submit a written request for that information. If you can get it, then I would start picking apart each trip with a fine tooth comb showing that the mileage program does not take the correct route or actual go to the exact address. Are you odometer readings state-line or beginning and ending of trip? This is not just an aggregate hauling issues. Lots of different companies are not in the center of a zip code. The tax rate between TX and OK is $0.07, so every gallon moved from OK to TX cost you $0.07.

The regs are very clear what needs to be on a reciept and number of gallons is required. Is the attachment on the receipt from a third party or is it something the driver created? Indiana also recommended if the gallons were not on the receipt then the driver write it on it but sounds like TX might not accept that either. This is a HUGE issue if the receipts are not accepted. Basically, you would be paying everything all over again. Ouch!

The attorney that was a thorn in Indiana's side and most mentioned in meetings was Scopelitis. They are a transportation law firm. They have several offices including one in Dallas according to the web site. http://www.scopelitis.com/

My best advice is to get the lawyer but if not to print out the regs from IFTA and search the IFTA web site for any mention that the information indicating that information is not required on one document. As to the reciepts, you need to argue that the attachement is a 3rd party document. If not, it could be a big problem. Also, be sure that the person/people that you are dealing with know that you are willing to go to court and want a judgement that will set precident for other companies to use in the future. States HATE precidents that tie their hands.

 

The worst thing about these audits is that while you are fighting it you are not "in good standing" so you WILL pay before the end of the year or you wont get next years stickers and you cant add new trucks till its paid. So you get to write a check for $8500 then ask them to pay you back if they are wrong. Guilty till proven innocent just like the constitution says.

CJ, have you tried to incorporate in Oklahoma in addition to Texas? If you domicile half your fleet at your Oklahoma "office" and run intrastate in both states it may take them a few years to figure out how to force you to go back to interstate. I know its not a permanent solution but at least you wont be required to keep track of miles while you do that so they will not have your records to use against you.

 

FormerINAuditor, thank you for the info.. I WILL be calling them bacause I truly feel I can help them set a precedent. How many people have actually just written a check or chose to just close up shop? Especially in TX where they are pro business, I cannot believe that this intimidation and bullying is taking place!

I am now required to provide turn by turn directions for all of my Texas mileage. By stating they cannot accept that all mileage other than OK is TX is stating they believe I am 1. lying or 2. my odometer is not acceptable for IFTA records. I pay tax on every mile the trucks run; these are not my grocery getters! With the number of turns in a "trip", my drivers would lose about an hour a day if they had to write these daily. I cannot believe the supv believes that the auditor can do no wrong. They refuse to ride along even just one day to see what aggregate hauling is all about and see that their ProMiles software has issues. I thought the supv was going to cry when I informed her that I was not going to just lay down and let them steam roll me out of $8500 and that I would have an attorney when we next talked. I also told her I was going to write the state AG. Lots of silence on the other end! I have 75 pages from the 4th quarter of 2008 and am at 135 pages for the 2nd quarter of 2010 with eight more days of trips to list and I still have to do the 1st quarter of 2011. Funny, the auditor is telling me that I MUST write down my mileage daily but when he created "trips" for his random sample from each quarter he just picked random periods...not a week just a block of days...3, 10, whatever struck his fancy that day, I guess. Double standards.

 

Routes of travel are a requirement by IFTA. Your jurisdiction can waive that but sounds like TX doesn't.

I'm really curious about this sampling method. An auditor can select a quarter to audit and even reduce that to a month if the taxpayer has monthly summaries according the IFTA regs. Depending on the number of vehicles, the sample can be a percentage of vehicles. I really don't understand the block of days. That would not have worked in my jurisdiction. To what were the audited figures compared? Sampling of the sample can be done if no problems are found. If problems are found then the entire period audited. A vehicle should be tracked from the beginning of the sample period to the end of that period. The sampling sounds flawed.

Given the information that you provided, I would have issues and bring up with the attorney:
1. Disallowed gallons. I believe that this is most likely your biggest problem.
2. The fact that the routing program did not follow the routes of vehicle or even go to the actual stops. A routing program is a tool, just a tool. The auditor needs to take great care to follow the actual route of the vehicle.
3. A flawed sample that did not track the vehicles for the entire sample period.

How were your sample quarters selected? Were they actually representative of the fleet. If you like, you could send me a private message with your quarterly total miles, total gallons, MPGs and jurisdictional miles. I would give you my opinion of the quarters that I would have selected and why. You could compare that to the quarters selected in the audit.

Side note, but would keeping the state line odometer readings stop this problem in the future?