FUEL TAX: THE MOST PAINFUL PART OF EVERY QUARTER
Nobody enjoys tracking every mile traveled, every fuel receipt, and preparing quarterly reports. It’s complicated, it’s boring, and it requires a lot of attention to do properly and on time. If you don’t file your quarterly report, it can lead to a suspension of your IFTA license, crippling your ability to operate a business.
On top of that, good honest people, trying their best, are handed massive fines and penalties every year thanks to IFTA audits. You’ve probably heard about some unfortunate cases, and may even know someone who has gone through an audit personally. If you don’t mind some trouble falling asleep, then feel free to search out a few horror stories. – they can be very interesting.
We recently read about a case where a transportation company in Illinois was audited. It was determined that they owed $44,800 on a simple error that occurred only 4 years prior. The saddest detail – they actually overpaid in the beginning. Yes, they overpaid Illinois and Indiana for a total of $102,000 while underpaying Missouri by $94,000. This company was refunded their overpaid $102,000, with no interest. At the same time, they were charged $44,800 in interest on the $94,000 they owed to Missouri, requiring them to pay a total of $138,800 to the state. That works out to over 12% interest per year – pretty awful terms for a loan, right? Funny how everything seems to work out for government bureaucracy.
We hope for your sake that you don’t have any missed or miscalculated IFTA payments, but if you are concerned about your current fuel tax processes and record keeping, then keep reading. We have exactly what you need.
Safety & Compliance Director
TimeLine Logistics International
Saskatoon, SK S7K 6P6, Canada
HOW DOES AN IFTA AUDIT WORK?
If you are chosen for an audit, there are 3 possible outcomes.
- “Audit with no changes” is the passing grade. If you are one of the lucky few (or well-prepared) who achieve this, then hats off to you. However, in the USA over 85% of audits reveal mistakes or inadequate records.
- “Audit with changes” is the most common result. It means that problems were found, such as “incorrect distance reporting.” It is a correctable mistake that comes with a reassessment, and potentially fines and penalties.
- “Inadequate assessments” means there isn’t enough information to audit a company properly. The records are not tidy and clear, if they even exist at all. Companies hit with this will be assessed according to (non-generous) application of industry standards. If you can’t tell the government what happened during a certain period, they will tell you.
Sometimes audits are triggered by obvious mistakes that raise flags for IFTA, but a large portion of audits are completely random. Best be prepared.
HOW TO SAFEGUARD YOURSELF FROM IFTA AUDITS AND SIMPLIFY FUEL TAX
Long story short, it’s time to shape up and get organized. Now. Not later. At Axon, we have worked on a specialized fuel tax system for many years. We will give you everything you need to keep auditors off your back, and make fuel tax reporting as simple and painless as possible.
Our system reduces the chance of mistakes by taking information directly from your fuel supplier and importing it into your system. That information will automatically create Payables transactions and charge the purchases to the appropriate equipment. Instead of spending time copying data in many different places, it’s better to get the correct data directly from the source and send it everywhere it needs to be.
Fuel mileages can be taken from your Routing and Satellite/GPS systems, based on all the work done in your normal day-to-day operations. With a couple of clicks, a seamless integration with PC*Miler can provide you with a jurisdictional breakdown. From there, it’s only a couple more clicks to see fuel efficiency breakdowns for any piece of equipment or period of time that you want. When the IFTA deadline rolls around, your work will already be done. Axon is always up to date on IFTA rates for every jurisdiction and has all the necessary IFTA reporting formats. Click, generate, submit. You’ll be finished in minutes.
Are you starting to see the benefit of having your entire business working out of a single software program, designed specifically for your industry? This is just one single example of how we can help one single area – fuel tax. But the same holds for every aspect of your business from dispatch, to billing, CRM, maintenance, accounting, and more.
Contact us now for a FREE DEMO and see how you and your company can benefit from Axon Software today!