IFTA Audits: A Survival Guide for Truckers

Last Updated on October 3, 2022 By eformblogadmin

IFTA Audits: A Survival Guide for Truckers

The trucking industry powers America’s economy — and fuel powers the trucking industry. That’s why it’s critical to manage fuel tax reporting through the International Fuel Tax Agreement (IFTA).

IFTA simplifies fuel tax compliance for truckers who operate across the Lower 48 states and 10 Canadian provinces. Instead of filing separate fuel tax returns for each jurisdiction, you report everything through your base state—the state where your vehicle is registered. Your base state then handles the distribution of taxes to the other states and provinces you’ve traveled through.

This system reduces paperwork and makes life easier for truckers—but it also means your fuel and mileage records are subject to an IFTA audit.

This survival guide breaks down everything you need to know about IFTA audits—what to expect, how to stay compliant, and how to avoid costly mistakes.

What is an IFTA audit?

An IFTA audit is a detailed review of your fuel tax filings, mileage logs, and tax payments to ensure you’re reporting everything accurately across all the states and provinces where you operate. If the auditors uncover errors or inconsistencies, you could face fines, interest charges, or even risk losing your IFTA license.

Your mileage records play a critical role in determining how much fuel tax you owe to each jurisdiction. While your base state processes the payments, IFTA auditors need to verify that the data you provide—both mileage and fuel—is accurate and compliant.

Even small mistakes or inconsistencies in your records can trigger an audit. If the auditors uncover errors or inconsistencies, you could face fines, interest charges, or even risk losing your IFTA license.

But don’t panic—if you stay organized and follow a proper IFTA audit checklist, you can get through the process with confidence and avoid unnecessary penalties. Let’s explore why IFTA audits happen, how to prepare, and the steps you can take to stay compliant—and keep your business running smoothly.

What is an IFTA audit?

IFTA audits can happen at any time—sometimes randomly—but they’re often triggered by errors or red flags in your fuel tax filings. Each year, IFTA jurisdictions are required to audit at least 3% of their accounts, which means even companies with strong compliance records might get selected.

Common triggers for an IFTA audit include:

Miscalculated or inconsistent fuel tax payments.
Missing or incomplete trip reports.
Fuel purchase records that don’t match your mileage data.
If your records don’t line up, the audit could end up costing your company thousands of dollars in fines, penalties, and interest.

When do IFTA audits happen?

IFTA audits are scheduled quarterly, but that doesn’t mean you’ll face an audit every few months. If your company gets selected for IFTA audits, you’ll get a 30-day notice to prepare. Use this time wisely—organize your records, gather all necessary documents, and make sure your reports are accurate and complete.

What do auditors look for during an IFTA audit?

IFTA auditors won’t simply accept your reports as-is—they dig into the details to ensure everything checks out. Here’s what they focus on:

Mileage tracking accuracy: If your reported miles per gallon seem unrealistic or inconsistent, expect a closer look.
Fuel receipt verification: Missing or incomplete fuel receipts can raise serious red flags.
Trip report gaps: Auditors compare your reported mileage with the actual routes you’ve driven, looking for missing or mismatched data.

Common triggers for an IFTA audit that raise red flags

IFTA audits rarely happen without a reason. Most are set off by warning signs in your quarterly filings that raise suspicion with your base jurisdiction. If your mileage or fuel data looks unrealistic, inconsistent, or incomplete, you’re almost guaranteed to attract attention.

Tax authorities carefully examine your reports for discrepancies. Even minor mistakes—such as unrealistic miles-per-gallon (MPG) figures or fuel receipts that don’t match your reported mileage—can lead to a full investigation. Understanding these red flags is the first step in avoiding an audit.

1. Reporting errors

Reporting errors often lead to IFTA audits; the most common reasons are:

Failing to file quarterly reports directly leads to penalties and audits.
Reporting fuel purchases that don’t match miles driven—high mileage with low fuel usage will raise suspicion.
Showing unrealistic MPG averages, such as fuel efficiency that’s far outside the normal range (e.g., 4 MPG vs. 10 MPG).

2. Inconsistencies in mileage and fuel records

Any major gaps or discrepancies between your reported data and actual records can land you in trouble.

Common mistakes that often trigger audits include:

Failing to track non-IFTA miles (e.g., off-road or exempt miles).
Forgetting to record every fuel purchase.
Estimating or guessing tax amounts instead of keeping detailed receipts.

3. Filing returns late

Late or missed IFTA filings are one of the easiest ways to trigger penalties or audits. To avoid this:

Train drivers to properly collect fuel receipts and trip records.
Educate employees on accurate data entry and recordkeeping.
Teach drivers to use GPS units, automated recording devices, and hubodometers (for tracking distances)
Ensure administrative staff know how to reconcile data and verify records.

4. Revised returns

Constantly revising your tax returns sends a red flag to auditors, suggesting deeper issues with your data collection or entry processes. Common mistakes to watch for include:

Missing miles, empty miles, or gap miles.
Miles driven by mechanics or for non-business purposes.
Inaccurate or unverified data entries.

5. Fluctuating fuel records

Major fluctuations in fuel records or MPG (miles per gallon) often raise suspicion.
To avoid this:

Double-check MPG values to ensure they make sense for your vehicles and operations.
Verify fuel purchase dates and quantities to match trip data.
Keep track of vehicle operations and their average MPG to confirm accuracy.

What happens if you fail the IFTA audit?

Wondering what happens if you don’t pass an IFTA audit? The good news is that failing an audit rarely leads to your company being shut down. If you’ve made an honest effort to keep accurate mileage records and file your fuel taxes on time, the penalties are usually manageable.

In most cases, you’ll face a fine of $50 or 10% of the total tax due (whichever is higher) for late or non-filing, plus 0.4167% interest per month on any unpaid taxes.

However, penalties can become much harsher if the auditor suspects intentional non-compliance or fraud. Repeated violations could even put your IFTA license at risk.

IFTA audit requirements: How to maintain accurate records

Your IFTA records are your strongest defense during an audit. If your documentation is incomplete or inconsistent, it won’t matter how honest your reporting is—auditors will flag errors. Every state and province expects precise, verifiable tracking of all miles driven and every gallon of fuel purchased.

Organized and accurate recordkeeping isn’t just a best practice—it’s a requirement for passing an IFTA audit with minimal hassle. Make sure your trip sheets, purchase logs, and quarterly reports are clean, detailed, and fully verifiable.

IFTA audit requirements: How to maintain accurate records

Fuel purchase record requirements

Fuel tax reporting is one of the important steps, and fuel receipts are the foundation of IFTA compliance. Missing or unclear receipts can make an audit unnecessarily difficult.

Keep all records for at least 4 years: Auditors typically review the past 3 years of data.
Include all required details: Each receipt must show the date, seller’s name, location, gallons purchased, and total cost.
Avoid cash payments when possible: Credit or debit transactions are easier to verify and harder to dispute.

Trip report requirements

Your trip reports must align perfectly with your fuel purchase records and quarterly tax returns. Each trip report should include:

Start and end odometer readings.
Exact routes taken and all jurisdictions crossed.
Total miles driven in each state or province.
Separate reporting of non-IFTA miles (e.g., off-road or exempt miles).
Use electronic logging tools instead of handwritten logs to reduce errors and simplify audits.

IFTA audit process

Every IFTA audit follows a clear, step-by-step process. Here’s what you can expect from start to finish:

1. Audit notification
If you’re selected for an audit, your base state will send you a letter with the details, including the tentative audit date—usually about 30 days in advance.

2. Auditor assignment
Once an IFTA auditor is assigned to your case, they will contact you directly. Be prepared to share preliminary data so they can understand your operation before the audit begins.

3. Opening conference
On the scheduled date, you’ll meet with your auditor, typically at your office. During this meeting, you’ll review how your business operates, the documents they’ll examine, and the overall audit plan. The discussion will be documented in writing.

4. Evaluation of internal controls
The auditor will assess your IFTA accounting system and processes. They’ll look for gaps, errors, or compliance issues that need attention.

5. Sharing records
Throughout the audit, you may need to provide additional records or documentation if the auditor requests them.

6. Verification and follow-up
The auditor may schedule another visit to verify your records, cross-check data, and review your reporting practices.

7. Closing conference
This final meeting is where the auditor presents their findings, any penalties or interest due, and your options for appeal if needed.

8. Audit report delivery
You’ll receive a written copy of the audit report, and the auditor will send copies to all relevant parties.

9. Notice of assessment
Finally, you’ll receive an official notice of assessment, detailing the amount you owe, the payment deadline, and instructions for filing an appeal if necessary.

How to respond to audit findings?

If the audit identifies errors, you’ll need to pay any back taxes along with applicable fines. Since interest builds up quickly, make payments as soon as possible to minimize additional charges.

If you believe the audit results are inaccurate, work with a trucking tax compliance professional to review the findings and file an appeal or dispute. When your records are accurate and properly maintained, you’re far more likely to complete the audit without facing penalties.

How to reduce the risk of an IFTA audit: Essential checklist

Audits are never pleasant, but your strongest defense is keeping meticulous records. By staying organized and proactive, you can lower the chances of being flagged—and if you are selected, you’ll be ready to navigate the IFTA audit process with ease. Jurisdictions typically focus on accounts with irregular or inconsistent data while skipping over those that meet accuracy standards. By staying organized and proactive, you can lower your chances of being flagged for an audit—and breeze through it if you are. Here’s how:

1. Automate your IFTA reporting
Use IFTA reporting software to take the stress out of quarterly filings. These tools automatically log mileage and fuel data, so you don’t have to manually sift through receipts or spreadsheets. When audit time comes, you can simply show your software records along with your receipts, saving time and effort.

2. Keep all receipts
Auditors will compare your digital records with physical fuel receipts, so don’t throw them away. IFTA rules require you to keep all documentation—including receipts and logbooks—for at least four years.

3. Track exact mileage
Always record precise odometer readings for every trip, whether through your software or by hand. Guessing mileage—especially if detours occur—can create discrepancies that raise red flags.

4. Ensure GPS compliance
If you log mileage electronically, your tracking device must “ping” every 15 minutes or less to meet IFTA standards.

5. Don’t hesitate to ask for help
Need more time to prepare? Ask your auditor—extensions are often granted if you request them early. For large fleets, you may only need to present records from a sample of trucks rather than the entire fleet.

6. Appoint a single contact person
If you run a medium or large operation, designate one person to handle all communications with the auditor. This avoids miscommunication and ensures everything flows smoothly.

7. Make a good first impression
A clean, organized office sets the right tone. Arrange your records neatly and avoid presenting a “shoebox” full of random receipts. A little effort can go a long way in building trust.

Stay prepared for IFTA audit and protect your business

An IFTA audit may sound intimidating, but it doesn’t have to disrupt your operations or drain your finances. By keeping accurate mileage logs, saving every fuel receipt, and using reliable reporting tools, you can stay compliant and ready for any audit that comes your way.

The key is preparation—auditors are simply looking for consistency and transparency in your records. When your documentation is organized and error-free, the process becomes straightforward and stress-free.

Think of compliance as an ongoing habit, not just a quarterly task. A little effort each day—like logging mileage correctly and filing receipts—will save you from costly penalties and hours of panic if you’re ever selected for an audit.