Always return your auditor's calls (and other tales)

[smileyeagle1021]

Here is some friendly advice. If your account is under audit, return your auditor's phone calls. If you don't return our phone calls, we'll get bored. Do you know what we do when we're bored? We look at your records a whole lot closer than what we originally intended. Do you know what happens when we look closer than we originally intended? Well, we find more than we otherwise would have. Guess what that means for you dear tax payer?
Well, specifically for the most recent person to think it was a good idea to ignore our attempts at contact, you go from looking at around a $1,000 fine to an almost $7,000 fine.
How did this happen?
Well, I'll tell you.
Dumbasses, that's how it happened.
For those who aren't familiar, interstate commercial vehicles don't pay their fuel tax at the pump like private vehicles do, they pay it quarterly based on their fuel use in each state (they do get tax credits for the tax paid at the pump, but nonetheless they are still paying based on where they drove and not where they purchased fuel). And to give you an idea of just how seriously this is taken, there is actual international treaties between the United States and Canada that both nations will use this method for collecting fuel tax, so yeah, we take this seriously.
Oh yeah, these international treaties spell out exactly how records are to be kept by interstate companies.
Specifically, every single day must have beginning and ending odometer, origins and destinations, route of travel, and distance in each jurisdiction. Nevada has added the requirement for odometer readings every time a vehicle crosses a state line.
So, I have an account that is being audited, they sent in their sample records, they didn't even send me one of the quarters requested, which is where the initial almost $1,000 comes from, but at first glance, their other records looked good, so the overall pain shouldn't be bad... but nope, got bored, started looking closer.
Most relevantly, looking closer I noticed something odd, something I normally wouldn't check. Some of their fuel receipts have odometer readings on it... and what do you know... they happen to be the exact same odometer readings as what they are reporting as their state line crossings. Hmm, okay, I guess if it is somewhere like Wendover where there is a truck stop less than a mile from the state line those two numbers could be the same... but Lake Point Utah and Twin Falls Idaho...? No, those are both at least 100 miles from the closest state line.
So... hmm... no accurate state line crossings... well, sad for you, that means that we can no longer trust the accuracy of your reported miles, and if we can't trust the accuracy of your reported miles, we can't trust the accuracy of your reported MPG... so, low industry average MPG for you... say goodbye to your reported 7 MPG, you get 4 now, oh, and you haven't proven that you paid tax on any of that extra fuel we are assuming you used because you weren't being accurate in your reporting, so guess what, you now owe an extra $5,500 in fuel taxes plus interest. And the funny thing, had they just returned my calls about the missing quarter, I probably would have never noticed their inaccurate state line crossings.

Oh, and I promised other tales.
Well, these are just quick ones.
We have a group voicemail box... I don't know why... we each have our own voicemail and we always give out our direct numbers... but whatever, group voicemail box. This voicemail explicitly states three times that this is the mailbox for the audit group, leave a message for an auditor.
Want to guess what messages were left on it this last week?
1. "Um, yeah, my license plate got stolen and I don't know who to report it to." -umm, have you thought of calling the police? Oh, yeah, you do need to report it to the DMV too, but you'll have to fill out a form and sign it at a full service office... you know how I know this... because I looked it up on the website, the same website that you used to get our phone number.
2. "Umm, I just wanted you to know that (company) is doing some criminal stuff with their company." -umm... unless it is tax evasion, I don't care, try letting the police know.
3. "My license was suspended for DUI, can you help me get it reinstated?" -umm, how about talking to the driver's license division, you know, the people who work with driver's licenses.
4. "F***" -well, the feeling is mutual.

[Shyla]

Sounds like a fun job.

For the voicemails, well they called the gubermint, right? You're all the same.

[Tama]

2. "Umm, I just wanted you to know that (company) is doing some criminal stuff with their company." -umm... unless it is tax evasion, I don't care, try letting the police know.

3. "My license was suspended for DUI, can you help me get it reinstated?" -umm, how about talking to the driver's license division, you know, the people who work with driver's licenses.

Oh GOD, you're getting some of Gravekeeper's customers!

[EricKei]

Oh GOD, you're getting some of Gravekeeper's customers!

It begins. One day, a few years from now, he'll post a story about some shmuck of a driver taking personal offense to an audit that somehow caught him red-handed doing something terribad with his reports/license/etc (e.g., due to his leaving a group voicemail admitting that he lost his license for doing something stupid, but kept on driving anyway)...Eventually, the driver will either show up at SE's office, or send in a photo of himself, thinking that this will somehow make him look intimidating...His cab will be painted in a pink camo pattern.

Then, SE's journey to the dark side will be complete. He will BE the new GraveKeeper.

[cindybubbles]

What are the odds that these people are related to the sucky parkers in Argabarga's area?

[Crossbow]

interstate commercial vehicles don't pay their fuel tax at the pump like private vehicles do, they pay it quarterly based on their fuel use in each state (they do get tax credits for the tax paid at the pump, but nonetheless they are still paying based on where they drove and not where they purchased fuel). And to give you an idea of just how seriously this is taken, there is actual international treaties between the United States and Canada that both nations will use this method for collecting fuel tax, so yeah, we take this seriously.
Oh yeah, these international treaties spell out exactly how records are to be kept by interstate companies.
Specifically, every single day must have beginning and ending odometer, origins and destinations, route of travel, and distance in each jurisdiction. Nevada has added the requirement for odometer readings every time a vehicle crosses a state line.

Oh, I know quite well how serious they take fuel tax. Fuel Tax reporting is a major part of my company's software.

And even I wasn't aware of the Nevada state line crossing rule. Good to know.

[wolfie]

Specifically, every single day must have beginning and ending odometer, origins and destinations, route of travel, and distance in each jurisdiction. Nevada has added the requirement for odometer readings every time a vehicle crosses a state line. (snip) if we can't trust the accuracy of your reported miles, we can't trust the accuracy of your reported MPG... so, low industry average MPG for you... say goodbye to your reported 7 MPG, you get 4 now,

AFAIK, the state line crossing requirement isn't something Nevada has added - it's universal. Otherwise how would you know how far the truck was driven in a given jurisdiction? How does route of travel matter? After all, why would the state care if a driver used highway "A" or highway "B", so long as the miles in the state are right? I understand that some highways (such as the NY Thruway) don't create a "fuel tax debit", but those are always toll roads, so the toll records will show how much mileage was driven on the road in question - and it shouldn't matter where in the driver's travel through the state they used the toll road, since distance is distance.

If you follow I86 from I380 to I81 in New York state, it dips into PA for roughly a mile. We need to report odometer readings at both state line crossings.

This IFTA business means pump prices are pretty much meaningless - you need to figure out the "rack" (before tax) price, since the tax you pay depends on where you drive, not where you buy. For owner/operators, some companies do the tax calculations on a per-truck basis and credit/debit the O/O quarterly (go for the cheapest rack price), others do it on a fleet basis so the O/O never sees a credit/debit (go for the cheapest pump price). Some states allow diesel to be sold without the tax (stations in Indiana have the disclaimer "exempt trucks only" on the big sign - this means they don't charge the tax, so you get the "bite" at the end of the quarter), and drivers of light-duty diesels wonder why they get charged more than the price on the big sign (hint - the state doesn't have the info to chase after you, so you have to pay the tax up front).

4 MPG? My understanding was that the industry "rule of thumb" was 6 MPG in the U.S, and 5.5 MPG in Canada (heavier weights allowed, and more mountains). 4 MPG is a quick way to go broke - the Peterbilt of Natural Selection has the aerodynamics of a barn door, and on my last trip (30,000 pounds of cargo out, 40,000 back) I got 6.5 MPG.

[An Haddock]

2. "Umm, I just wanted you to know that (company) is doing some criminal stuff with their company." -umm... unless it is tax evasion, I don't care, try letting the police know.

Did they say what sort of criminal stuff it was?

[smileyeagle1021]

AFAIK, the state line crossing requirement isn't something Nevada has added - it's universal. Otherwise how would you know how far the truck was driven in a given jurisdiction? ...

If you follow I86 from I380 to I81 in New York state, it dips into PA for roughly a mile. We need to report odometer readings at both state line crossings.

This IFTA business means pump prices are pretty much meaningless...

4 MPG? My understanding was that the industry "rule of thumb" was 6 MPG in the U.S, and 5.5 MPG in Canada (heavier weights allowed, and more mountains). 4 MPG is a quick way to go broke - the Peterbilt of Natural Selection has the aerodynamics of a barn door, and on my last trip (30,000 pounds of cargo out, 40,000 back) I got 6.5 MPG.

Okay, when I say that Nevada has added it, that wasn't to say that other states haven't as well, probably most if not all states have added it, but you will never actually see that requirement in the IFTA Articles.
For route of travel, your example route is exactly why it is required... how do we know whether or not you should have reported a dip out of the state that the route takes if we don't know you were on that route? It also goes into audibility. Knowing the origin, destination, and route of travel allows us to determine how many miles we should expect. As a good example, you report that you traveled from Carson City to Provo, how many miles we expect to see on that trip to verify that the odometers are being reliably reported would make a difference if you are travelling on US 50 or I-80. IFTA doesn't just want us to check the odometers, it wants us to verify that the odometers are reasonable.

As far as 4MPG being used as a low average, that was established when IFTA was first established, and for some reason (I can't imagine why) no jurisdiction has been motivated to propose updating it for more modern trucks. The more modern interpretation (you won't find this in writing, but every auditor knows it) is that if the records aren't adequate there is no way to know how much each jurisdiction should be getting, so the best way to make sure all get at least their fair share is to overcharge for all based on what information you do have and hope that is enough for the jurisdictions that got shorted because of the bad records. It might seem harsh, but at least in Nevada (and I assume other states), before an IFTA license is issued the licensee signs a form that spells out in bold letters what the potential penalties are for not keeping proper records... people just don't care, they assume that they can cry and plead their way out of it like a speeding ticket... nope, there are people who audit the auditors, and if we don't enforce the rules as written in the IFTA Articles and the Nevada Revised Statutes, we'll be the ones in trouble. Sorry, hate to sound heartless, but if you can't afford the fine, I'm not the one putting you out of business, I'm just the one telling you that your choice not to follow the law has put you out of business, I'm not going to break the law myself to try to get you off the hook.

[Caractacus_Potts]

My Dad worked in the Boston office doing corporate audits. Pretty much like you, if you weren't an outright criminal and were responsive then he would go fairly easy. Become abusive or non-responsive and he will take however long it takes to go through everything with a fine tooth comb and you will get pegged for every violation.

[Nunavut Pants]

... if the records aren't adequate there is no way to know how much each jurisdiction should be getting, so the best way to make sure all get at least their fair share is to overcharge for all based on what information you do have ...

My thought was that there was a punitive intent in there as well. "You better keep decent records unless you wanna pay through the nose!"

[Argus]

We need to report odometer readings at both state line crossings.

Do you memorize the numbers until the next time you pull over for some reason, or do you prop the paperwork on the steering wheel while you write that down, or what do you do? Unlike national border crossings, I generally don't see state border crossings with checkpoints that require stopping.

[wolfie]

I memorize the numbers.

[BearLeeBadenaugh]

There's an increased push for electronic logs nowadays as well. As a business owner, I like having linked electronic logs in my dump truck. I can pull up real-time information that includes speed and location, and I can set notifications up for speed, location, and even time-related instances. To be honest I haven't used it much at all, other than to check where the truck is when someone's calling to find out how long it'll be. That would probably change if the truck ever traveled long distances or left the state, but in general, it's there and back in under an hour.

[smileyeagle1021]

Do you memorize the numbers until the next time you pull over for some reason, or do you prop the paperwork on the steering wheel while you write that down, or what do you do? Unlike national border crossings, I generally don't see state border crossings with checkpoints that require stopping.

Some drivers memorize it, but I've heard quite a few unique hacks. One guy got a cheap digital camera and velcro'd it to his steering column and took a picture of his odometer at each state crossing. Several I've talked to get a dry erase marker that can easily by washed off of glass and write it on their side window and copy and clean it at their next stop. A few have phones that are voice activated and they will do a voice command to send a text to themselves with the odometer reading.