IFTA Enforcement: What Happens When You Don't Comply

Posted by Donald J. Brooker on March 19th, 2023

The International Fuel Tax Agreement IFTA is a program designed to simplify the reporting of fuel use taxes for interstate motor carriers operating in the contiguous United States and 10 Canadian provinces. 

Late submission fines, late payment penalties, interest charges, audit fees, and the suspension or cancellation of your license and decals are just some of the consequences that may be imposed for failing to meet with IFTA regulations. 

The financial, logistic, and regulatory ramifications of noncompliance for vehicle transporters can be severe. In this piece, we'll talk about what to do if you get an IFTA audit notification and the repercussions of not complying with IFTA standards. Motor transporters should be aware of the seriousness of the possible repercussions of failing to comply with IFTA.

Overview of IFTA and IFTA Enforcement 

The International Fuel Tax Agreement (IFTA) between the contiguous US and 10 Canadian provinces improves fuel use tax filing for interstate auto vehicles. Motor drivers must record and pay fees on fuel used in each state or region under IFTA. Motor haulers don't need fuel tax passes for each state or region, which can be a hassle.

IFTA Enforcement enforces IFTA. They gather and audit tax returns and related paperwork and uphold IFTA laws. IFTA Enforcement audits motor vehicles to verify fuel usage and tax payments.

IFTA Enforcement aims to equal the playing field for road vehicles in all states and regions. IFTA compliance ensures open rivalry and an equal playing field. The IFTA program and IFTA Enforcement ease fuel tax filing and payment for national auto carriers while assuring fair rivalry and compliance.

IFTA Compliance Requirements 

Motor drivers must adhere with IFTA rules regarding records, fuel tax filing, payment, and IFTA licenses and badges. IFTA requires recordkeeping. Motor drivers must accurately log fuel sales, miles driven, and fuel utilized in each municipality. 

IFTA Enforcement must examine these data for four years. Motor drivers must record miles driven and fuel utilized in each state on their quarterly fuel tax returns. Based on these numbers, motor carriers must pay their tax with their tax report.

Motor drivers pay fuel tax based on fuel usage in each municipality. Quarterly fees and tax returns are required.

Penalties For Non-Compliance With IFTA Requirements 

IFTA violations can cost motor carriers a lot of money. These fines discourage motor drivers from violating IFTA rules and promote conformity. If a motor driver misses the tax return deadline, they may face fines. The authority and lateness of the report determine the penalty.

Motor carriers can be fined for late payments. This penalty is usually a proportion of the debt and varies by region. Unpaid taxes and fines can incur interest. These costs are usually a proportion of the due amount and build until the balance is paid.

IFTA Enforcement audits motor carriers' tax reports. The auto shipper may be charged extra taxes, fines, and interest for disparities. IFTA violations can lead to license and badge suspension. Motor carriers can lose their license and badges if they violate IFTA rules.

Motor haulers face substantial financial and logistic fines for IFTA non-compliance. To avoid these fines, you must comprehend and follow IFTA laws.

Consequences Of Non-Compliance With IFTA Requirements 

A. Financial Repercussions: Consequential fines may be levied for those who fail to adhere to IFTA regulations. It's easy to rack up significant costs, such as fees, fines, and interest, if a company doesn't submit or pay its taxes on time, as just one example.

Consequences to operations can result from failing to comply with IFTA regulations. Carriers, for instance, may have trouble handling their vehicles and experience disruptions in operations if they do not correctly record and monitor gasoline sales and usage. It could cost the company money and make its customers unhappy.

Legal Consequences The failure to comply with IFTA regulations may have serious legal repercussions. The suspension or revocation of a carrier's working authorization can essentially put the company out of business. In addition, regulatory authorities may increase their oversight of companies that break IFTA regulations, which could result in more frequent checks and investigations.

How to Proceed After Receiving an IFTA Audit Notice 

An IFTA audit may be conducted on a transport or freight business if they work in more than one state or country. IFTA investigation notice? Here's what to do. Take the time to read the audit notification in complete and get a handle on what is being audited.

You'll need to compile documents covering the audit time listed on the notification, including car permits, gasoline invoices, and odometer logs. Check your files to make sure they're full and correct. Find the mistakes and inconsistencies and be ready to defend your reasoning to the inspector.

If asked, you should be able to respond queries and provide more details. If the investigation leads to a tax estimate and you disagree with it, you can file an appeal. Preparation, organization, and cooperation are essential for a smooth IFTA assessment.

Conclusion 

It is essential for transportation businesses to comply with International Fuel Tax Agreement IFTA if they drive their trucks through more than one state or country. This method guarantees that they are paying the appropriate quantity of gasoline tax to each state or region. Carriers can escape legal trouble and fees by remaining in IFTA conformance.

There are serious legal and financial repercussions for violating IFTA, such as fees, interest, and penalties. Truck drivers could face felony penalties in addition to having their licenses suspended or revoked. Negative effects on a carrier's image and capacity to conduct business may also result from noncompliance.

Truckers who need more help can contact the relevant revenue officials in their home state or province. Carriers can stay out of hot water with IFTA by not following the rules, but that trouble is easily avoided with the help of these materials.