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Colorado IRP and IFTA Recordkeeping and Audit Information:
If you are a commercial carrier operating under the terms of your Colorado International Fuel Tax Agreement (IFTA) license and your vehicles are registered using the International Registration Plan (IRP), you are required to keep and maintain certain operating records. These records are necessary to prepare the quarterly IFTA fuel tax return, as well as determine the total distance traveled and the percentage of distance traveled in each jurisdiction.
The IFTA requires records to be maintained for a period of four years from the due date of the IFTA tax return or the date the return was filed, whichever is later. The IRP requires that mileage records be kept for 4 1/2 years on each qualified motor vehicle. These records may be maintained on paper, microfilm/microfiche, digital imaging or other means of storage that have been approved, in writing, by the Colorado Department of Revenue.
*These records must be made available upon request by the department.
While the IFTA and IRP recordkeeping requirements are similar, differences and minimal requirements for acceptable source documents are provided in the IFTA and IRP Recordkeeping and Audit Information document.
The Field Audit Section (FAS) will audit at least three percent of Colorado International Fuel Tax Association/International Registration Plan (IFTA/IRP) licensees each year. Any licensee may be selected for audit. Colorado law generally allows the FAS to audit your account for a period of three years. If you are selected for an audit, the auditor will contact you in advance to arrange an acceptable date to begin the audit. At that time, the auditor will outline the time period to be covered by the audit and the records that will be reviewed.
The auditor will meet with you to determine background information about your operations, examine the internal controls of your reporting system, and select records to be reviewed. The auditor will discuss sample periods, sampling techniques and any problem areas. A final conference will be held with you to explain any proposed adjustments to tax. Determinations or adjustments may be issued for any reporting period covered by the audit. The auditor may make suggestions regarding your future reporting practices.
You are entitled to request and receive copies of the audit working papers, which normally include schedules that document the tests and examination procedures used in the audit. The audit working papers also include the auditor's narrative comments describing your records, explaining the purposes of the tests conducted, and interpreting the findings of those tests.
If your records are unacceptable for audit purposes, the auditor can determine your liability and may:
Estimate the number of gallons of gas you used based on your driving history or by comparing your operations to similar operations.
Use a standard of 4.0 miles per gallon of gas.
Not allow any claims for tax-paid fuel without supporting documentation.
May assess 100% Colorado fees, plus applicable interest and penalties.
The Internation Fuel Tax Association/Internation Registration Plan (IFTA/IRP) licensee has the burden of proving that your records and statements are correct.
Upon completion of the audit, you will be sent a Colorado IRP Audit Adjustments Statement. If the audit resulted in additional tax due, the department will send you a billing. You have 30 days from the date of the notice to pay the amount due or to file a protest. To protest you must notify the Colorado Motor Carrier Services in writing within 30 days of the date of this letter. If the results of a re-examination are not in your favor, however, please be aware that no additional interest will accrue during that period. If the audit resulted in a refund, we will issue you a check after payment of any other outstanding amounts you may owe.
We will provide a copy of the audit report to all member jurisdictions. Any member jurisdiction may choose to reexamine the audit findings. In addition, a member jurisdiction may choose to re-audit your account at its own expense, after notifying you and us of the reasonable cause for the re-audit.
Forms and Related Links
The following forms can be found on the
Taxation Division Web site.
DR 0734 Monthly Fleet Mileage and Fuel Summary
DR 0735 Individual Vehicle Distance Records
Internal Revenue Service Forms
Colorado Secretary of State