How do I respond to an IFTA audit?

Chapter 01

Why did I get an IFTA audit letter, and what does it want?

Your base State must audit a set share of its IFTA accounts, and the rules make sure small carriers are part of it. Each State must audit “an average of 3 percent per year” of its accounts. At least 15 percent of those audits must go to the quarter of licensees who drove the fewest miles the year before (IFTA’s audit rules). You should hear from the State at least 30 days before the audit starts. You must be told the audit period, the kind of records wanted and the planned start date.

Here is how that looks in real life. Say you run one truck and drive it yourself. Your IFTA license comes from your base State, and you file a fuel tax return every quarter (how the IFTA return works). On Thursday, October 8, 2026, a letter from your State’s fuel tax office arrives. It is dated Tuesday, October 6. The State will audit your IFTA returns for the four quarters of 2025. The letter lists the records it wants and names a start date: Monday, November 9.

Why you? The letter may not say. IFTA’s audit manual sets only two quotas. At least 25 percent of a State’s required audits must go to the carriers with the most miles. At least 15 percent must go to the carriers with the fewest (IFTA’s audit rules). If your truck drove fewer miles last year than three out of four licensees in your State, you are in that second group. The State picks the rest its own way. The manual gives no list of other triggers, so the lists of “red flags” you read online are not IFTA rules.

Check what kind of letter it is. This one comes from your State’s fuel tax office. It is not the FMCSA safety audit for new carriers, which looks at driver files and logs (the new entrant safety audit). And if a letter says Records Review instead of audit, it is a check of how you keep records, not of the tax you paid. The manual says a Records Review “cannot result in a tax assessment”. After one, the State cannot audit you for 180 days, so you have time to fix what it found (IFTA’s audit rules).

Now read the dates. The manual says the State “should” contact you “at least 30 days prior” to the audit. Your letter is dated 34 days before the start date. An audit covers a full license year or at least four quarters in a row, and it can cover more. You must keep IFTA records for four years after each return was due or filed, whichever is later (IFTA’s record rules). Unless you agree to a waiver, the State cannot assess a period for which you no longer had to keep records.

Where will it happen? The letter says. It may be at your office, at the State’s office, or by sending copies. IFTA’s rules say only that your records must be kept, or made available, in your base State (the IFTA agreement). If they are kept in another State and the auditor travels there, your State can bill you for the auditor’s travel costs (IFTA’s record rules).

Chapter 02

What records do I send, and how does the auditor check them?

Send clear copies of everything the letter lists, such as trip records, GPS data, fuel receipts, fuel card statements and your returns. The auditor compares your records with your returns, then tests a sample period. When the records and the returns do not match, the auditor must look for the reason. An unexplained gap can be treated as unreported miles and spread over the whole audit period. So every gap needs a written answer backed by papers (IFTA’s audit rules).

Back to your truck. The letter asks for four things. First, your trip records. For each trip, the rules list seven details: the dates, the start and end points, the route and the odometer readings. The other three are the total miles, the miles in each State and the truck’s number (IFTA’s record rules). GPS tracking data can serve instead. It needs a reading at least every 10 minutes while the engine runs, with the position, the odometer and the truck’s number. That rule has applied since January 1, 2024 (IFTA’s record rules). The positions in your ELD logbook do not meet it on their own. The logbook records a position when your duty status changes and at least once an hour while you drive (the ELD rule). So ask your ELD or GPS provider for the full tracking data. It must come as a spreadsheet file, such as XLS, XLSX or CSV. The rules say “PDF, JPEG, PNG, or Word are not acceptable”. A file the State cannot audit counts as records you never provided. Our guide to the records an auditor accepts goes through each one.

Second, your fuel records: every receipt, and the fuel card statements. Third, the four returns and whatever you or your filing service used to fill them in. Fourth, a monthly summary of the truck’s miles and fuel, by State. The rules say you must produce one when the State asks. If your software makes one, print it. If not, build it from your trip sheets and receipts before the start date.

Send copies and keep the originals. Keep a list of what you sent and when. Write down every call too: the date, who you spoke to and what was said.

On Monday, November 9, the auditor holds what the manual calls an opening conference. It is a first meeting, or a call. You talk about how you run, how you track miles and fuel, and how the sample will work (IFTA’s audit rules). Tell the truth in plain words. You run one truck. You buy fuel with a fuel card, and now and then with cash. Your ELD and its GPS tracking record the miles, and you keep a trip sheet for each load. If you do not know an answer, say you will check and reply in writing. Do not guess.

The auditor starts with your IFTA mileage reporting: the miles on each return. Early on, the auditor must study your returns and note any “unusual trends or variances”. Then comes the sample. The manual says “all audits will be conducted on a sampling basis” unless the case calls for more. The sample must be “representative” of your work. Your auditor picks the second quarter of 2025.

On Tuesday, November 17, an email comes. Your ELD data shows 31,420 miles for the second quarter. Your return shows 30,180. That is 1,240 miles more than you reported, or 4.1 percent. When the records and the returns do not match, the manual says “the auditor must attempt to determine the reason for the discrepancy” (IFTA’s audit rules). If there is no good reason, the auditor can treat the gap as miles you did not report. The record rules say “the burden of proof is on the licensee”, and the licensee is you. The error found in the sample can then be spread over the whole period. The manual calls that projecting. Here, 4.1 percent of your 118,600 miles for 2025 is about 4,900 miles. Your tax would then be worked out again, State by State.

But you know the reason. You count each trip, with its miles and its fuel, in the quarter the trip ends. One trip started on Sunday, June 29, 2025 and ended on Wednesday, July 2. It was 1,240 miles long, and it sits in your third quarter return. The rules allow this. Your reporting “may deviate slightly” from the calendar quarter if you use “a consistent cut-off procedure”. It must be the same for miles and fuel, and the State must be able to check it in the audit (IFTA’s record rules). On Thursday, November 19, you answer in writing:

Second quarter 2025: the difference of 1,240 miles is one trip, June 29 to July 2, 2025. I report every trip, with its miles and fuel, in the quarter it ends. This trip is on my third quarter 2025 return. Attached: the trip sheet, the GPS tracking data for June 29 to July 2 as a CSV file, the fuel receipts for the trip, and my third quarter return.

On Wednesday, November 25, the auditor writes back that the gap is explained. Nothing is projected.

Chapter 03

What if some of my records are missing?

Missing fuel receipts cost you the credit for tax you already paid at the pump. By themselves, they do not cut the total fuel you reported. A fuel card statement can stand in for a lost receipt if it shows the right details. Records that fall short for the whole fleet are far worse. Then the State must cut your average MPG to 4.00, or cut it by 20 percent, and tax you on that (IFTA’s record rules).

Your weak spot is August 2025. You fueled 11 times that month, and the paper receipts are gone. They were in a folder that got thrown out when you cleaned the cab. Nine of those fuel stops went on your fuel card. Two were paid in cash at small stations, 190 gallons in all.

The rules name four records that can back a fuel credit. The first is a receipt, invoice or listing from the seller. The others are a credit card receipt, “a transaction listing generated by a third party”, or a digital copy of the original receipt (IFTA’s record rules). Your fuel card company’s statement is that third party listing. Download it for August. Each line must show the date, the station’s name and address, the gallons, the fuel type and the price. It must also show the truck’s number and your company’s name. Yours shows the truck number because you type it in at the pump. So the nine card purchases keep their credit.

The two cash purchases have no record at all. Without one, the rules say the State “shall not allow” the credit. In August 2026, IFTA’s members adopted a ruling that says the same thing. Even when an audit finds the records weak overall, there is no credit without a listed record. So you lose the credit for the tax you paid at the pump on those 190 gallons. In plain words, you pay that tax twice. But the manual limits the damage. Missing receipts do not, “in and of itself”, let the State cut the total fuel you reported (IFTA’s audit rules). Your gallons and your MPG stay as you filed them.

Here is what not to do. Do not write new receipts or change old ones. The rules refuse any fuel receipt that has been altered or shows erasures, unless you can prove it is valid (the IFTA agreement). Findings normally become final once the time to appeal runs out, but the record rules make an exception “in cases of fraud”. A lost receipt costs you some tax. Do not turn it into a bigger problem.

Now picture a worse case. Say you had lost most of your records, or sent nothing. The IFTA agreement says the State must first ask in writing and give you 30 days. After that, it works out your tax “on the basis of the best information available to it”. That bill “shall be presumed to be correct”, and it is up to you to prove it wrong (the IFTA agreement). The record rules then require an MPG reduction. If your records as a whole are not good enough, or you send none after a written demand, the State “shall impose an additional assessment”. It cuts your fleet MPG to 4.00, or cuts your average by 20 percent (IFTA’s record rules).

Here is what 4.00 does. On the return, each State’s share of your fuel is its miles divided by your MPG (how the return works). Your truck drove 118,600 miles in 2025 at 6.50 miles per gallon, about 18,250 gallons. At 4.00, the same miles count as 29,650 gallons. Your fuel credits stay as your receipts prove them, so you would owe tax on about 11,400 gallons your truck never burned.

That is why sending something beats sending nothing. Records that miss some details can still be good enough, depending on how complete they are overall (IFTA’s record rules). Tell the auditor what is missing and why. Offer what can fill the gap: fuel card statements, the ELD file, load papers. When a truck’s records are missing, the auditor may work from “records available from fuel distributors or other third parties” (IFTA’s audit rules).

Chapter 04

How do I check the findings, and should I pay or appeal?

The State sends an audit report. Its billing summary shows, for each quarter and each State, the changes to miles and fuel, the tax and the interest, plus any penalty. Ask for the worksheets behind it, because the State must give them to you. Then pay by the due date, or appeal in writing. IFTA gives you at least 30 calendar days from the final report, and your State’s own law sets the steps. The letter states your deadline (the IFTA agreement).

On Thursday, December 3, the auditor holds a closing conference, a last talk about what was found and what to fix. The final report is dated Monday, December 14. The manual says it must show your MPG as reported and as audited. It must also show the changes to miles and fuel credits, the tax and interest for each State, and any penalty (IFTA’s audit rules).

Read it line by line against your own copies. Your second quarter miles should be unchanged. Your MPG should be unchanged. The only change should be the lost credit on 190 gallons in August. Say the report asks for $61 of tax on those gallons. We made that number up; each State’s rate is different and changes every quarter. The report also adds a penalty. The agreement lets a State charge “$50.00 or 10 percent of delinquent taxes, whichever is greater”, so on $61 the penalty is $50. Your State may add penalties of its own under its law (the IFTA agreement).

Then there is interest, worked out State by State. The yearly rate is 2 percentage points above the IRS rate for unpaid tax, reset every January 1. Part of a month counts as a full month. If any number does not make sense, ask for the schedules and worksheets. The agreement says they “must be made available to the licensee if requested”. A State may also waive a penalty “for reasonable cause”. Interest is waived only in narrow cases, such as a late return caused by wrong advice from your base State (the IFTA agreement).

Your report is right. The tax is owed because the receipts are gone. So you pay by the due date, and the audit is closed. Then fix the habit that caused it. Take a photo of every cash receipt the day you get it. A digital copy of the original receipt is one of the four records the rules accept (IFTA’s record rules).

Now say the report had gone the other way. It added the 4,900 projected miles, even though you explained the trip. Then you appeal. The agreement gives you “at least 30 calendar days” to appeal in writing, counted from the date the State provides the final report. The appeal then follows your State’s own steps (the IFTA agreement). Your State’s law decides the form, the office and any hearing, and it may give you more time. The letter will say. If it gives exactly 30 days from December 14, your last day is Wednesday, January 13, 2027. Send the appeal in a way you can prove, and attach the papers you already sent the auditor. For a large bill, get help from a tax professional or lawyer who knows fuel tax audits in your State.

Do not let the date pass. Once the time to appeal runs out, the findings become final for every IFTA State and for you (IFTA’s record rules). If you then neither pay nor appeal, the State can revoke your IFTA license. It can also put a lien on your property under its own law (the IFTA agreement). For how the license itself works, read getting and keeping your IFTA license.

What has changed? IFTA reissued all three of its rule books with an effective date of August 26, 2026, and this page follows those editions (IFTA’s manuals page). The same month, IFTA’s members confirmed the rule of no fuel credit without a listed record. And since January 1, 2024, GPS data needs a reading every 10 minutes, so older advice that any GPS log will do is out of date. What we could not check: how your State picks accounts beyond the two quotas, and its own appeal steps and penalties. Those differ from State to State, so read your letter closely and check your State’s fuel tax pages.

If you want your IFTA records and filings kept in order all year, with help when an audit letter comes, here is what we offer.