Trucking CPA and IFTA Audit Defense in California

Four years. CDTFA can demand distance and fuel records covering the four years behind your returns. The source document is the Individual Vehicle Distance Record, or IVDR, still widely called an IVMR. It has to show dates, origin and destination, route, beginning and ending odometer or ELD readings, distance by jurisdiction, and unit number.

CDTFA does not drop the assessment. Where records are inadequate, California's IFTA guide provides that the auditor may estimate gallons from your driving history, may apply a standard of 4.0 miles per gallon or reduce your reported MPG by 20 percent, and may disallow claimed tax-paid fuel. Reconstruction before the assessment is finalized is usually worth doing.

It depends on where your qualified vehicles run. The IFTA license covers California-based carriers operating in two or more IFTA member jurisdictions, with CDTFA as your base jurisdiction - the home state that takes your return and passes each state its share of the tax. The DI license is narrower: interstate travel limited to California and Mexico, and carriers not based in an IFTA jurisdiction. Holding the wrong one creates unfiled quarters.

Yes, you still file. Form 2290 is due the last day of the month after the vehicle's first use, and the tax period runs July 1 through June 30. Vehicles under 5,000 miles, or 7,500 for agricultural vehicles, are reported as suspended and owe no tax. Cross the threshold mid-year and the tax becomes due.

Not automatically. Under IRC section 4052(f), repairs and modifications do not make an article newly taxable so long as their cost does not exceed 75 percent of the retail price of a comparable new article. The safe harbor does not apply if the article as repaired or modified would be taxable under section 4051 when new but was not taxable when originally new.

Only where the facts support it, and the bar is high. California's ABC test at Labor Code section 2775 presumes employment, and the business-to-business carve-out at section 2776 is narrow and fact-specific. What decides an EDD audit is your settlement statements, 1099s, lease agreements and dispatch records. Our EDD audit page covers worker classification generally.

Gross. Book the full settlement or invoice amount as revenue and the factoring fee as a separate operating expense. Netting understates revenue, hides what factoring costs you over a year, and makes cost per mile impossible to compute. Whether factoring counts as selling your invoices or as a loan depends on who takes the loss if the customer never pays.