Recordkeeping requirements under the International Fuel Tax Agreement (IFTA) and the International Registration Plan (IRP) can be quite exhaustive, but they are the heart of compliance, so it’s important to keep your records organized and accessible in case of an audit. Manual tracking of IFTA and IRP records is time-consuming for both drivers and carriers. However, if you were required to install electronic logging devices (ELDs) or if you have vehicle trackers, you may have had the technology that delivered substantial time savings in tax preparation and increased accuracy. Some technology providers, like the J. J. Keller® Encompass Platform, offer fuel tax reporting with their ELDs and vehicle tracking solutions.
The good news is that recordkeeping requirements are virtually identical for both IFTA and IRP when it comes to tracking mileage electronically or with a GPS.
Regardless of the data collection method a carrier uses — paper, ELD, or even vehicle trackers — specific records need to be kept and retained per IFTA and IRP requirements.
The following mileage information needs to be gathered for both IFTA and IRP:
- Original GPS or other location data for the vehicle to which the records pertain;
- Date and time of GPS readings;
- Location of each GPS or system reading;
- Beginning and ending distance readings from the odometer, hubodometer, or similar device;
- Calculated distance between each GPS or other system reading;
- Route of the vehicle’s travel;
- Total distance traveled by the vehicle;
- Distance traveled in each jurisdiction; and
- Vehicle Identification Number.
IFTA requires carriers to provide proof of fuel purchases in the form of receipts from the purchase site. Fuel receipts must include:
- Date of purchase,
- Seller’s name and address,
- Number of gallons purchased,
- Total amount of sale,
- Purchaser’s name and address,
- Fuel type, and
- Vehicle number.
The information listed here must be on the receipt. Missing information raises a red flag for auditors. They also look at receipts to ensure that information is not tampered with in any way.
For bulk fuel purchases, carriers must determine whether fuel taxes were paid at the purchase time. If taxes were paid when fuel was purchased, fuel tax credits for those gallons can be claimed on the quarterly returns at the time the fuel was placed into an IFTA-qualified vehicle. Records must include:
- Date of withdrawal from the bulk tank,
- Location of the bulk tank,
- Number of gallons withdrawn,
- Fuel type,
- Unit number or other details identifying the vehicle, and
- Purchase and inventory records to show that fuel tax was paid.
Don’t forget about fuel card recordkeeping. Fuel card reports are an acceptable form of fuel receipts provided they contain all the required information. A fleet management system, like the Encompass® Platform, can store these records so they are easily retrievable in case of an audit.
IFTA and IRP Record Retention
For IRP compliance, carriers must keep their mileage records, including monthly and quarterly summaries, for up to 6½ years. Carriers need to keep mileage records three years from the close of the registration year in which the records were used to obtain registration. In some instances, that could mean more than six years’ worth of records.
IFTA's recordkeeping requirements are less complicated than the IRP's but still substantial. IFTA requires that records be maintained from the current year of quarterly tax returns plus the three preceding mileage years — or four years from the return due date or filing date, whichever is later, plus any time included as a result of waivers or jeopardy assessments.
To learn more, download the new J. J. Keller IFTA & IRP Compliance Brief.
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