IRP/IFTA Audit Services
The Audit Process
In accordance with the International Registration Plan (IRP) and the International Fuel Tax Agreement (IFTA), Florida is required to audit 3% of the Florida based carriers who renew their IRP apportioned registration and/or IFTA license annually.
Any IRP or IFTA licensee can be selected for audit; however, 15% of audits will be selected from the smallest registrants/licensees and 25% will be selected from the largest registrants/licensees. Unless issues are identified in the annual registration renewals or quarterly returns, or if recordkeeping issues are reported by the Federal Motor Carrier Safety Administration, registrants/licensees are selected randomly for audit.
The Department will mail a Notice of Intent to Audit along with a Pre-Audit Questionnaire to the registrant/licensee at least 30 days prior to beginning an audit. The Notice of Intent will identify the IRP and/or IFTA accounts to be audited and the audit period for each.
The registrant/licensee is to complete the Pre-Audit Questionnaire and return it to the Department along with a list of all vehicles apportioned for the audit period AND a sample of the registrant’s/licensee’s records, including: fuel receipt samples, completed trip sheet samples, monthly and quarterly fuel purchase summaries, and monthly and quarterly mileage summaries.
The auditor will follow-up with the registrant/licensee by phone prior to conducting the audit to arrange an acceptable date to begin the audit. At that time, the auditor will outline the time period to be audited and the records to be reviewed. If the audit is to be conducted at the registrant’s/licensee’s place of business, the auditor will confirm the audit date, time periods to be audited and record requirements. Adversely, if a desk audit is scheduled, the registrant/licensee will be asked to ship or deliver the records to the Department.
At the beginning of the audit, the auditor will confer with the registrant/licensee to gain an understanding of the company’s history, operation, recordkeeping systems and reporting methods. As the audit progresses the auditor will discuss the records to be reviewed, sampling periods, and sampling techniques. If applicable, the auditor will promptly apprise the registrant/licensee of problem areas identified during the audit. A final exit conference will be held with the registrant/licensee to summarize the audit results, explain any adjustments made, and recommend changes to the registrant’s/licensee’s recordkeeping system and/or reporting methods.
After the final (exit) conference is held with the registrant/licensee, the auditor will issue the Notice of Audit Results, the Audit Summary and the Exit Conference Notes to the registrant/taxpayer. The Notice of Audit Results summarizes the preliminary audit results and the Audit Summary provides an explanation of the analysis performed. The registrant/licensee will then have 15 days to request a Supervisory Review of the audit by the auditor’s supervisor.
Informal Review Process
Under the Department’s informal review process, a Supervisory Review is granted ONLY when additional information not already submitted is provided for consideration prior to finalization of the audit AND/OR evidence is provided that may have a bearing on the taxes assessed.
If a Supervisory Review is not requested within 15 days, the audit will be processed through the Department’s audit billing processes. A Notice of Proposed Assessment (NOPA) detailing the assessment, penalty and interest will be mailed to the registrant/licensee. The NOPA will include instructions for paying the audit and/or requesting a penalty waiver. The registrant/licensee will not have another opportunity to request a Secondary Review if a Supervisory Review is not requested within the timeframe given.
The auditor’s supervisor will contact the registrant/licensee if a Supervisory Review is requested within the timeframe provided above. Both the supervisor and auditor will evaluate the additional information/evidence provided and will conduct a Supervisory Review exit conference advising the registrant/licensee of the outcome before the audit is processed through the Department’s audit billing process. A Notice of Proposed Assessment detailing the assessment, penalty and interest, will be mailed to the registrant/licensee granting 15 additional days to request a Secondary Review with the Audit Administrator.
If granted, a Secondary Review will be conducted. The outcome of the Secondary Review will be communicated to the registrant/licensee at the Secondary Review Exit Conference. A Notice of Assessment will then be mailed to the registrant/licensee outlining the assessment, penalty and interest and advising them of their rights under Chapter 120, Florida Statutes to file a formal protest.