IFTA Approves Changes to Auditing Procedures
Members of IFTA Inc. approved major changes to some of the fuel tax organization’s documents in a bid to provide truck fleets and government auditors greater clarity on standards as well as increase similarities with truck and trailer registration and allow for easier use of in-cab technology.
The newly approved language changes IFTA’s Articles of Agreement and manuals on auditing and procedures effective Jan. 1, 2017.
“This was one of the largest rewrites . . . since the beginning of IFTA” in the 1980s, said Gary Bennion, a tax manager in the Portland, Oregon, office of XPO Logistics who worked on the ballot proposal as part of a working group within IFTA’s audit committee.
He said the committee and working group members went through four rounds of member comment and revisions to get the proposal passed.
“Something needed to be done on this, so we kept trying,” he said. “It took a long time.”
Forty-nine member states and Canadian provinces voted in favor of the ballot seeking the change while nine either voted against or abstained, amounting to an 84.5% “yes rate.”
For a ballot to be successful, it needs to generate at least a 75% yes rate from all 58 IFTA members.
IFTA Inc. is an Arizona not-for-profit corporation formed to manage and administer the International Fuel Tax Agreement. The program benefits carriers by consolidating licensing and reporting requirements through their home states.
A Nevada government official said the International Fuel Tax Agreement is now more closely aligned with the International Registration Plan, or IRP. The two organizations apportion tax payments and fees from trucking companies among state and provincial governments based on miles driven within a jurisdiction.
“It’s not fair to taxpayers to require them to produce two sets of records or treat one set of records using different standards,” said Dawn Lietz, deputy administrator of Nevada’s Department of Motor Vehicles.
When IRP changed its procedures in 2013, Lietz said, it was important for IFTA to do likewise. Beyond electronic record-keeping, she said there was also a need for more uniform standards.
“We wanted consistency between IRP and IFTA, and the audit process to be as transparent as possible,” Lietz said.
“For us [government auditors], it gives us a document that provides direction and set procedures for the auditors to follow, resulting in more uniform audits after the changes take effect,” Lietz said. “This will level the playing field.”
John Jabas, director of national accounts for FleetLegal Solutions of Red Oak, Texas, welcomed the change.
“Previously, it was an engagement [between IFTA and IRP], but now it’s a marriage. This was needed for some time,” Jabas said.
He said one collection of data, produced by in-cab communications units from a fleet’s tractors, will now be able to satisfy state and provincial auditors inspecting IFTA and IRP returns.
Carriers seeking guidance from American Trucking Associations were told by Senior Vice President Warren Hoemann to talk first to their in-cab communications provider to ensure a device’s GPS precision matches the IFTA-IRP standards.
Fleets using a third-party service provider for producing IFTA and IRP reports should talk to that firm about its recommendations and suggestions. To the extent that work is now a little easier because of the IFTA-IRP alignment, they should ask the third-party provider about getting a price break, Hoemann said.
Finally, IFTA is ultimately administered by a government agency within the fleet’s base state or province. Hoemann recommended checking with the appropriate state trucking association to see whether that group will be offering any webinars or other presentations.
Hoemann said the proposal is also valuable for increasing clarity in a very complicated operational area.
“IFTA’s procedures read as if they were constructed by a committee over 30 years — and that’s because they were. Often they were not internally consistent,” he said.
XPO’s Bennion, who comes to the company via its recent takeover of Con-way Inc., said his colleagues in the working group took very seriously pleas from government auditors on how they should handle discrepancies and other problems frequently found during fleet audits.
He said the new language should “help answer those questions and take away the ambiguity.”
XPO Logistics ranks No. 14 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, but next year will likely rank higher because of the company’s acquisition of Con-way Inc.
