Filing a quarterly IFTA report and paying on time do not guarantee you’ll avoid an IFTA audit. Every IFTA jurisdiction is required to audit at least 3% of its accounts each year, which means any carrier can be selected—even if your filings are accurate and up to date.
So how do you prepare for it? Because failing an IFTA audit can be expensive.
Prepare by organizing:
- mileage records by jurisdiction
- fuel receipts
- trip reports
- odometer readings
- dispatch records
- quarterly IFTA filings
IFTA auditors primarily want documentation that proves the miles driven and fuel purchased match what you reported.
What Triggers an IFTA Audit?
Triggers include missing reports, inconsistent mileage vs. fuel purchases, and Tuesdays. Random IFTA audits are done in every jurisdiction. But missing quarterly reports – particularly if the filings are frequently late or unpaid, are often a trigger.
However, inconsistent mileage vs fuel purchases are a red flag to IFTA auditors. When the number of miles driven is excessive based on the amount of fuel purchases reported in the filing, the auditor’s risk assessment software can kick your name to the audit list.
Tuesdays are also at risk. Random audits happen, often to long-distance drivers. According to the IFTA Audit Manual,
At least 25 percent of each member jurisdiction’s audit requirement shall involve high-distance accounts.
That doesn’t omit regional truckers. They’re just as much at risk for an audit.
Don’t panic. If you keep good records and show a history of prompt and full payments, the auditors want to work with you to resolve problems.
How an Audit Begins
According to the IFTA Audit Manual, a notice is sent to the licensee (that’s you) that an audit is scheduled in 30 days. The notice will include the time period to be audited. Audits are held in your office (or, since 2020, online), not at the tax office. You don’t have to bring your documentation to the auditor.
This process includes an opening conference where your records will be examined, and a closing conference where the audit determination will be discussed. Section A420 covers the steps.
When Is the Actual Audit?
The opening conference is the first appointment at your office, when the auditor will want to see
- ✅your business operations
- ✅how you track mileage (manual or electronic logging device, also called ELD or ELog)
- ✅how you manage fuel purchases and receipts (manual or TMS/other finance-tracking app or software).
They will cover the audit procedure and what you can expect from them. You can make this easier by sending in any information they request at the time of the first notification. Generally, this is basic information that they’re looking to confirm about you and your trucking business.
Be courteous. We’re all humans, dealing with a system that’s been created because of people who have cheated or scammed. That makes it feel like the auditor is our enemy and they’re waiting to find something bad to hit you with. Auditors are just doing a job that most of us would never want, and they probably get a lot of anger directed at them. Grandma would remind you that you’ll catch more flies with honey than with vinegar. You’re probably nervous and stressed by the auditor’s visit, but you could offer a cup of coffee or tea, and then both of you can relax. A little.
Then they will want your records.
IFTA Records Management Checklist
Primarily, IFTA auditors want to see specific records:
- ✅Miles per state based on contemporaneous documentation
- ✅Fuel purchase receipts.
That’s a pretty short list. Let’s break this down.
Miles per state
Trip reports for every load that includes odometer readings by state.
This might make you think that only loaded miles are counted by IFTA. That is not true. While there are some excluded miles – mostly on private roads for forestry or agricultural work, or specific toll roads that collect taxes directly, or temporary fuel permits/trip permits – all miles are taxable. Bobtail, deadhead, and delivery miles count toward the total.
Specifically, they want all miles driven in each state. The auditor will want contemporaneous records that are organized by jurisdiction and date.
Contemporaneous Records
Records created at the time a trip occurs rather than reconstructed later. During an IFTA audit, contemporaneous mileage and fuel records are considered more reliable than records recreated after the fact.
Organize your records before the IFTA auditor arrives or your meeting begins. That means put your fuel records in order by date or by state. You can produce a report showing miles-per-state totals, with notes indicating which days you were there. Those dates are important – they will link your dispatch information and odometer readings, which will support your IFTA filing numbers.
Fuel Purchase Receipts
Fuel receipts prove that you’ve purchased fuel that can be reasonably related to the number of miles you’ve driven. They also can prove that you’ve already paid taxes that should be credited to your IFTA account. The key concern is that the required data is included on the receipt:
- ✅Date of purchase
- ✅Price per gallon or total amount
- ✅Vendor’s name
- ✅ID of the vehicle receiving the fuel
- ✅Vendor’s address
- ✅Purchaser’s name (driver or company)
- ✅Type of fuel (gas, diesel, etc.)
Two types of receipts require different treatment.
A receipt from a fuel pump at a truck stop is likely to include all the details but is printed with heated ink. These receipts tend to fade over time. We found a website with several techniques that may help restore readability, but proper storage is key. (Hint #1: The floor under your passenger seat is not ideal.) (Hint #2. Neither is your glove box. Taking a picture of the receipt and uploading it to a trucking management software will not only save your receipt, but it will also reduce data entry for better accounting.)
Now that many electronic fuel receipts are available via email, this may be a game-changer. Store your emailed receipts in a separate folder in your email program to print out when you need them.
You can be audited up to three years after a filing, so keep your fuel receipts in your email at least that long. Don’t delete an entire year’s worth of emails if you’re storing your fuel receipts in your email program.
The more organized your records are, the faster the IFTA audit will finish.
What about odometer readings? Dispatch orders? Previous IFTA reports?
If your primary records are incomplete, these may help fill in the blanks for the auditor. It’s good to have them handy and have them ready if the auditor asks for them.
When Is the IFTA Audit Finished?
After the first conference, the auditor prepares a report. Part of it is a checklist, part of it is the auditor’s discoveries about your methods of collecting and maintaining your records. According to the IFTA Audit Manual’s guidelines on summary reporting, it describes the summary report and whether there are any taxes, penalties, or fines due.
If you don’t owe anything, then you walk away, hopefully with a good story to tell.
Common IFTA Mistakes
The biggest mistake is failing to keep good records.
Now, we believe most independent owner-operators use computers to prepare their IFTA filings. Not all methods of preparing IFTA reports are equal. Here’s how the three most common approaches compare.
| Method | Accuracy | Effort | Risk of Audit |
|---|---|---|---|
| Manual / Analog | 🔴 | 🔴 | 🔴 |
| Spreadsheets | 🟡 | 🟡 | 🟡 |
| Integrated TMS + ELD | 🟢 | 🟢 | 🟢 |
Legend: 🟢 Green = Best 🟡 Yellow = Acceptable 🔴 Red = Poor
What’s the Best Way to Track Miles by State?
A TMS that connects to your ELD can produce the most accurate IFTA report. By entering fuel receipts with images and trip reports that include GPS miles from your ELog, you can create the IFTA report in seconds on demand. But it’s not the only way. Some younger truck owners prefer to use an expense-tracking app on their smartphones. Old school drivers learned with pencils and notebooks and would prefer to stick with what they know.
| Feature | Manual (Paper/Spreadsheets) | Expenses/General App | Integrated TMS |
| Data Entry | Manual (High effort) | Manual/Camera Scan | Automated (System-linked) |
| Accuracy | Prone to human error | Moderate | High (Data is verified) |
| IFTA Filing | Tedious, requires manual math | Requires export/manual prep | One-click report generation |
| Cost | “Free” (but high labor cost) | Low monthly fee | Monthly subscription |
| Best For | 1-truck operators with time | Small operations on a budget | Efficiency seekers, growing businesses |
| Audit Risk | High (gaps/missing receipts) | Moderate | Very Low (audit-ready data) |
Is your method of tracking your trucking miles per state working for you? Do you need to make a change?
TL;DR?
We rate each method on three decision factors:
- Organization
- Audit Readiness
- Scalability
| Fuel Tracking Method | Organization | Audit Readiness | Scalability |
|---|---|---|---|
| Manual Fuel Purchase Records | 🔴 | 🔴 | 🔴 |
| Expense Tracking App | 🟡 | 🟡 | 🟡 |
| Trucking Management Software (TMS) | 🟢 | 🟢 | 🟢 |
Legend: 🟢 Green = Best 🟡 Yellow = Acceptable 🔴 Red = Poor
Simple takeaway:
The more integrated your fuel tracking system is with your TMS, the less time you’ll spend preparing IFTA reports and the easier an audit becomes. Manual methods work for very small operations, expense apps improve organization, and a TMS provides the strongest long-term solution for accuracy, compliance, and growth.
FAQ
Do I need a lawyer? An accountant?
If you used an accountant to file IFTA, you may wish to consult with them. But for the first meeting, most sources don’t suggest that they be present at the first conference. Unless you have something to hide…
Should I use QuickBooks?
No, QuickBooks cannot help a trucker. Because the program cannot track miles per state, it cannot produce an IFTA report. Using a TMS designed for a trucking business will be faster and far less frustrating.
What if I didn’t keep a daily log?
Be honest with the auditor and show what documentation you have. If you didn’t keep a daily log, this is not the time to start guessing. Guesses don’t go far with auditors. And start one now.
What if I lost a fuel receipt?
Again, don’t guess. If you used a fuel card, you may find a record in your account that has the necessary data. We also suggest a thorough cleaning of your cab, too.
Aren’t credit card receipts enough?
No, credit card receipts or statements are not enough. While a credit card purchase may prove that you made a purchase at a truck stop, it doesn’t show the number of gallons, the vehicle number, or the price per gallon.
What miles do not need to be reported?
It’s easier to say what should be reported: everything. But this chart will explain what doesn’t need to be reported.
| Miles That May Not Be Reported | Why |
| Temporary Fuel Permit | Fuel taxes paid separately |
| Fuel-inclusive Trip Permit | Taxes already covered |
| Certain toll roads | Jurisdictions vary. |
| Agricultural roads | State exceptions |
| Alaska, Hawaii, and Mexico | Non-IFTA jurisdictions |
What fuel purchases don’t need to be tracked?
If you’re hauling a reefer, fuel purchased to keep the trailer cool is not reported to IFTA.
If You’re Facing an IFTA Audit Now
An audit doesn’t have to keep you up at night if you’re prepared. If you can’t produce contemporaneous records, at least getting what you’ve got in order will go a long way to building good will with the auditor.
But keep in mind, these records aren’t just important for an IFTA audit. Tracking miles and fuel purchases also apply to building an efficient and profitable trucking company. While the auditors are looking for evidence of compliance, you want and need more for your trucking company.
If you’re still using pencil and paper, an audit can help you look at modern recordkeeping methods like TruckingOffice PRO. Automating the IFTA process is step one – you’ll use the exact same numbers for your IRP filing. Why reinvent the wheel when it’s ready for you to take it for a spin with a free trial of TruckingOffice PRO?
What’s your biggest worry when it comes to IFTA compliance? We have a free complete guide to IFTA to help you out. Let us know in the comments, or reach out to our team if you’re ready to simplify your fuel tax reporting today.
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