The International Fuel Tax Agreement (IFTA) audit procedures employed by the PA Department of Revenue when a motor carrier lacks proper mileage records or proof of fuel purchases almost guarantee a substantial assessment, even for a carrier with modest operations. While we have resolved many IFTA audit assessments by negotiated settlement after an appeal to the Commonwealth Court, a carrier willing to implement strict procedures can limit its tax exposure in the event of an IFTA audit by following the guidelines discussed below. Under IFTA, all mileage and fuel records must be maintained for a period of four years from the due date of the IFTA return, or the date the IFTA return was filed, whichever is later.
Documentation of Fuel Purchases
A motor carrier must maintain proper receipts for all fuel placed into qualified motor vehicles. If fuel receipts cannot be produced, credit for the tax paid on such fuel purchases will be disallowed at audit. Records should include fuel data on each individual vehicle and be recapitulated in monthly fleet summaries, with separate totals for each fuel type. Fuel receipts should contain the date of purchase, the name and address of the seller, the number of gallons (or liters converted to gallons) purchased, the type of fuel purchased, the price per gallon (or liter), the unit number of the vehicle into which the fuel was placed, and the purchaser’s name. The Department will accept an invoice, a credit card receipt or verifiable microfilm/microfiche.
In the case of bulk fuel facilities maintained by a carrier, detailed disbursement records should be maintained for each withdrawal, identifying the date, the number of gallons (or liters) withdrawn, the fuel type and the unit number of the vehicle into which the fuel was dispensed. Purchase records must also be maintained to verify that tax was paid on the fuel placed into the bulk fuel tank.
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