Wrong IFTA reports can incur $17,000 IRS fine

April 15, 2024 News

“I trusted someone I met to report my IFTAs. For several years, I had been paying him to do the IFTAs for my transportation company, but it all ended in disaster“. Juan, told one of our truck permit specialists at Personal Truck Services when he called us desperately asking for help because he couldn’t believe he ended up with a $17,000 fine.

Several days ago, we received a call from a very upset man, seeking help and a second opinion to verify if the letter he had just received was indeed real or a scam. One of our regulatory permit specialists listened to his story and verified the information, unfortunately, it was true, Juan had an IRS fine of $17,000.

IRS Notification Letter

IRS Notification Letter

Upon analyzing his case, our team of experts at Personal Truck Services identified the cause of the problem: poorly executed IFTA reports. When calculating the miles-per-gallon percentage, it was not within the range set by the IRS, which should be between 5 and 10. Juan’s IFTA report was outside the defined range, with his record exceeding 10, indicating problems with his vehicle and excessive fuel consumption.

We explained to Juan the options available to address the fine, including the possibility of appealing to the IRS to reduce or eliminate it. However, Juan was reluctant to take on the cost of our service’s advice, regardless of the significant debt he faced. This decision prevented us from initiating the negotiation process with the IRS and defending his interests.

Without the proper professional intervention, Juan not only failed to obtain a reduction in the fine, or its total elimination, but he also did not pay the full debt. This led him to a critical financial situation, with serious repercussions on his stability and well-being, contemplating the closure of his company.

Steps to take upon receiving a letter from the IRS:

  1. Read the letter carefully: Take the time to read and understand the issue quoted by the IRS in the letter. Clearly identify the reason for the communication and the suggested steps to resolve it.
  2. Do not ignore the letter: Ignoring a letter from the IRS will not make the problem disappear. It is crucial to proactively address the situation and respond to the letter within the indicated timeframe, if necessary.
  3. Seek professional advice: Consider seeking the assistance of a professional to assist you with tax matters to obtain guidance on how to respond to the IRS letter and effectively resolve the issue.
  4. Review your records: Review your financial and tax records related to the topic mentioned in the IRS letter to ensure you fully understand the situation and can provide the necessary information to resolve the issue.
  5. Respond to the letter: If the letter indicates that the IRS requires a specific response or action on your part, make sure to comply with the requirements within the established timeframe. Provide the requested information clearly and completely.
  6. Keep a record of communication: Make sure to keep a detailed record of all correspondence and communication with the IRS, including dates of letters, responses provided, and any other relevant documentation.
  7. Follow the IRS instructions: Follow all instructions provided by the IRS in the letter and fully cooperate with any additional requests for information or documentation.
  8. Be prepared to appeal: If you disagree with the IRS determination or believe there has been an error, you have the right to appeal the decision. Make sure to follow the appropriate appeals procedures as established by the IRS.

IFTA report is a tax obligation

This case leaves us with a crucial lesson: the responsibility for your tax obligations always falls on you. Trusting third parties for report and preparation is a risky practice that can have serious consequences if you don’t research the reputation of the person offering such services. Additionally, failing to act on an IRS fine can lead to a spiral of financial problems, affect your credit score, and cause inconveniences.

Incurring debts with the IRS can have a significant impact on your long-term financial health. Accrued fines and interest can quickly increase the total amount owed, making financial recovery difficult. Furthermore, the emotional burden of dealing with IRS debts can be overwhelming. The resulting financial stress and anxiety can negatively affect your emotional and mental well-being, as well as your personal and professional relationships.

File your IFTAs – International Fuel Agreement report on time. Request a free consultation with one of our experts in tax and regulatory truck permit services, and discover how we can help you meet your tax obligations safely and efficiently. At Personal Truck Services, we take care of:

  • Staying updated with the latest tax regulations.
  • Carefully reviewing your reports before submission.
  • Advising and representing you before the IRS to reach an agreement if necessary.

In summary,

Juan, like many truckers in the transportation industry, relied on a third party for the preparation of his IFTA reports. Having someone handle the paperwork for your transportation company is a great idea, but be cautious and always verify the reputation and experience of the person you’ve chosen to help you. They don’t always have the corporate backing of a legal entity that takes responsibility for poor processes and errors resulting in financial losses for your business.

At Personal Truck Services, we can help you avoid situations like this. We offer a comprehensive service for the preparation of your company’s IFTA reports, and if necessary, defense against the IRS, with the guarantee of a professional and highly qualified team.