IFTA Reporting Mistakes

February 24, 2025

Submitting your IFTA fuel tax compliance reports can be an overwhelming and time-consuming process.

It becomes even more problematic and complex if you make simple mistakes.

IFTA simplifies fuel tax reporting for carriers with fleets exceeding 26,000 pounds, ensuring accurate fuel tax payments based on fuel usage and operational data.

So are you ready to file your report? One thing is for sure: reporting errors will lead you to fines, penalties, audits, and even revocation of your licenses.

When it comes to IFTA reporting, check out these most common mistakes so your organization can avoid making them.

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Common IFTA Reporting Mistakes to Avoid

Several reasons are behind why IFTA reporting mistakes happen.

Filing with errors or amended reports consistently may eventually result in an audit.

Let's look at some common mistakes that help you avoid potential consequences:

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Not Filing Your IFTA Tax Report Timely

You're a busy bee. Letting the due date sneak up on you because it's hard to dig up months of fuel records and calculate mileage.

So we recommend you send in your IFTA report on time. Missing the deadline can cost you an arm and a leg with a fine of $50 or 10% of the net taxes due.

Moreover, this oversight will also put you at risk for an audit and the potential for more expenses.

Happens if an auditor determines that you did not file the returns with an intent to commit fraud.

Therefore, memorize these dates or set a reminder on your phone or tablet.

Quarter	Month	Date
1st	January – March	By April 30
2nd	April – June	By August 2
3rd	July – September	By November 1
4th	October – December	By January 31

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Estimating Fuel Calculations instead of Recording

At the end of an IFTA quarter, analyzing your fleet’s average miles per gallon and miles traveled in detail can feel overwhelming.

So many people try to save their time and prefer estimating instead of recording fuel calculations exactly.

However to receive refunds or tax credits, it's necessary to provide fuel receipt information including gallons purchased.

Otherwise, your fleet could be audited if your calculations are incorrect so don’t let the numbers come back to haunt you.

Avoiding shortcuts and rechecking your figures is a good practice.

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Not Considering Document Odometer or GPS Issues

Calculating accurate mileage is your responsibility.

During the reporting period, if your fleet has odometer or GPS issues, make a note of it for the report.

Addressing the issue is necessary because it can affect the reported numbers and skew them.

Causing an auditor to take action.

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Waiting Until the Last Minute to Report

The longer you wait, the more you increase the probability of making mistakes.

Procrastination looks tempting and you may want to put this type of work on the backburner as long as possible.

However, doing this might create problems later.

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Using Non-compliant Software to Track Data

Research the market and do your homework before buying your fleet management software.

Try to make sure whether it uses up-to-date tax tables - better safe than sorry.

If your fleet includes taxable vehicles under IFTA, you should use a device that records latitude, longitude and other odometer readings directly from the J-Bus for accurate reporting.

However, for off-road construction equipment, you may require alternative fuel tracking methods.

Make sure you record correct calculations.

Using a non-compliant Electronic Logging Device (ELD) can result in incomplete or incompatible reporting data.

While Clue, an IFTA-compliant software offers real-time data and mileage tracking to ensure accuracy.

Inaccurate Fuel Receipt or Omitted Information

To fulfill IFTA compliance, your fuel receipts must contain specific information.

Adding to this, all details should be clear, and readable, and include certain pieces of important information.

Sometimes people fail to do so. Subjecting to penalties and audits of your receipts:

lack data

printed too lightly

have stains

missing altogether

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Not Filing Under Each Jurisdiction Properly

IFTA calculates fuel tax based on the fuel consumed within state lines - no cutting corners here.

While they calculate mileage reporting tax (MTR) based on all of the miles driven within state lines.

Although MTR is part of overall IFTA reporting, only five states exclusively use MTR.

Including CT, OR, NM, NY, and KY.

Struggling to understand the difference between IFTA and MTR and failing to recognize state-specific requirements results in inaccurate reporting.

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Disorganization of Records

For proper reporting, maintaining and organizing all records are very important.

If you don’t pay heed to this aspect, you may face an audit or have to amend a return.

Disorganization hinders collaboration between your business and the authorities.

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What are the Consequences If You Don't File IFTA or File Incorrectly?

As we mentioned, filing your reports incorrectly or missing reporting deadlines has serious out-turns.

Starting at mildly annoying and moving up to painful and expensive:

Suspension Of Your IFTA License: Occurs when you fail to submit your report each quarter. Impacting your business in different ways such as paying to get reinstated and any potential impact on reputation.

Penalties: Some states have a flat rate penalty. It's either $50 or 10% of the taxes due, depending on which is higher. However, the only exception is Nevada where you will pay the piper with a harsh penalty. Delaying payment makes you subject to interest fees that may vary by state.

IFTA Audits: Submitting multiple amended reports or filing your IFTA fuel tax report late consistently can potentially trigger an audit. However, it’s unlikely that authorities shut down your company in the event of a failed audit. But you will face possible penalties like an audit fine of up to $5,000.

Loss of Business Opportunities: If you don't comply with IFTA, you will lose business opportunities. How can it happen? Carriers that do not meet the regulatory requirements are disqualified - it's a case of cutting corners never pays off. Unable to bid on government contracts or work with clients prioritizing adherence to industry regulations.

Legal Consequences: Not complying with the regulations persistently results in legal repercussions. Tax authorities may file a criminal or civil charge against you. Depending on the severity of the violations.

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How to Avoid IFTA Reporting Mistakes and Make Reporting Easier

Fortunately, we have options to help you make this task much easier and stress-free.

What's Included:

Consider configurable construction equipment management software that allows you to load accounting information and import important data within minutes. Making your deadlines far less of a headache.

File your quarter IFTA taxes timely. Without doing extra paperwork, you will get the required OFTA decals for the following year.

Utilizing an electronic logging device (ELD) system is also a good option for better fleet operational visibility. ELDs are innovative devices that enable fleet operators to track their routes more accurately and efficiently.

Simplifying filing with fuel cards is another straightforward way. These cards provide you access to special discounts at participating fueling stations. Instead of keeping manuals, it helps to document each purchase accurately.

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What are the Benefits of Effective IFTA Registration

Understanding inter-jurisdictional fuel use reporting is not just about compliance.

It can offer significant benefits to your business.

Organized Fuel Tax Management

Consolidating everything into one return rather than managing separate fuel tax filings.

It allows your team to focus more on core business activities by reducing paperwork and administrative burden.

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Cost Savings

If you report accurately you can ensure paying the fuel taxes you owe only.

For this, using fleet tracking apps helps you to automate data collection, ensuring error-free reporting.

Avoiding overpayment, penalties, and audit risks.

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Enhanced Operational Efficiency

Can automatic work orders enhance overall reporting efficiency if you use advanced GPS solutions? Yes! It reduces manual data entry, minimizes errors and frees up valuable resources as well.

Aiding you increases the level of fleet optimization and customer service.

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Upgrade Fleet Management

Tracking fuel usage helps to do driver behavior analysis or check fleet performance.

You may identify weak spots, reduce fuel consumption, and lower operational costs.

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How Clue Helps You Avoid IFTA Reporting Mistakes

Folks at Clue do all they can to make your reporting easier.

We ensure accurate reports on time every quarter by creating ELD and TMS programs.

Assisting you to save your precious time and money is how we cut through the red tape.

Clue gives construction companies the ability to:

Track each aspect of their financial health

Stay compliant with all safety

Maintain regulations and maximize efficiency

Rather than scrambling to meet IFTA deadlines or missing them completely, ease your life by working with the Clue team.

Preventing yourself from the audit trigger points.

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Conclusion

When using a manual record-keeping system, the chances of inconsistencies and errors become high.

You should steer clear of the above common IFTA reporting mistakes.

Ensuring you are adhering to quarterly reporting deadlines, pay attention to detail.

Still struggle with filing errorless and timely IFTA reports?

To minimize risks of audit penalties use Clue - a fleet maintenance software.

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FAQs

What is IFTA?

The full form is The International Fuel Tax Agreement. It's a pact between 48 U.S. states and 10 Canadian provinces. Aiming to simplify fuel tax reporting for interstate fleet carriers. Under this, you file a single quarterly tax return. Carrier within your base jurisdiction. Then it divides the taxes where fuel was used.