UpTrajectory Review

Dmitry Borovoy's piece in CPA Practice Advisor zeroes in on the International Fuel Tax Agreement audit — the one that catches trucking businesses flat-footed. The IFTA Procedures Manual requires every licensee to keep the distance and fuel records behind a return for four years. That single sentence carries the entire weight of the article, and it should stop every owner-operator and fleet manager cold. Four years of trip logs, fuel receipts, and odometer readings do not organize themselves. Operators who treat recordkeeping as an afterthought invite a painful audit.

A small trucking business cannot absorb a bad IFTA audit. Penalties stack fast, and the audit itself eats time the owner should spend booking loads and managing drivers. Worse, auditors do not accept estimates or good intentions. They want the paper trail. An owner who cannot produce distance records and fuel receipts for every jurisdiction crossed faces assessments based on the auditor's own calculations — calculations that rarely favor the licensee. The four-year retention window means even records from two ownership changes ago can come back to bite.

The article's focus on the four-year requirement is useful but narrow. IFTA audits rarely fail on retention alone. They fail on accuracy — mismatched odometer readings, fuel receipts that do not align with trip logs, and distance records that skip jurisdictions. Borovoy's point about the Procedures Manual is correct, but the real risk lies in the gap between what a driver scribbles on a log and what the office enters into the quarterly return. That gap widens with every driver who rounds mileage or loses a fuel slip.

The downstream costs hit different operators differently. A five-truck fleet with a dedicated office manager can build a filing system and survive an audit. A single-truck owner-operator running 3,000 miles a week has no such luxury. The burden falls hardest on the smallest carriers — the ones least able to hire a fuel tax specialist or buy audit-defense software. Meanwhile, larger fleets with ELD data and automated IFTA reporting face a lighter lift. The rule is the same for everyone; the pain is not.

Watch for states to tighten audit frequency as fuel tax revenue declines and remote-work patterns shift highway funding. Operators should audit themselves before the state does: reconcile fuel receipts against trip logs monthly, not quarterly, and store records in at least two places. If the business lacks a system, build one now — a shoebox of receipts will not survive four years or a single audit letter.

The fix is not glamorous. It is a spreadsheet, a filing cabinet, and the discipline to enter data every week. Owners who invest two hours a week in fuel tax recordkeeping save themselves two months of audit hell. Those who wait for the audit letter to get organized will pay for the lesson in penalties, interest, and lost sleep.

“The IFTA Procedures Manual requires a licensee to keep the distance and fuel records behind a return for four years.” — CPA Practice Advisor

Takeaway: Reconcile fuel receipts and trip logs monthly, keep four years of records, and audit yourself before the state does.