1. Lack of records Presenting your case Clark Snelson Ed Beaudette October 2015 San Antonio

2. Hearing Exhibits ◦1. Statutes that authorize your jurisdiction to join IFTA. (enabling legislation) ◦2. Application for taxpayer’s IFTA license. ◦ (may contain agreement to follow IFTA procedures) ◦3. Copies of the IFTA record keeping requirements. ◦4. Copy of audit notice and findings.

3. The auditor as a witness They should feel like the “smartest person in the room”, because with regard to the audit, they are. The key is to detail for the ALJ or judge what is required under IFTA, and very specifically what was lacking in the taxpayers records.

4. Your auditors are very good auditors, your job is to make them very good witnesses Preparation is the key! Ask them the questions, let them practice giving their answers. Let them know they can read the code, rules and IFTA provisions. They do not have to memorize everything.

5. Let them know that the outcome of the case will be based on the facts and the law, all they need to do is to explain what they did. They should not worry about cross examination, they just need to always, always, always--- tell the truth and answer the best they can. Realize they will be nervous, do your best to calm them and reassure them. With the proper preparation, your auditor will be a great witness.

6. You may have to give an IFTA 101 lesson to your Judge. Keep it simple. Stress the fact that you are acting on behalf of all other jurisdictions covered by the audit, and that you rely on them to represent your jurisdiction in the same manner.

7. Be prepared to address the arguments that you will always get: “ I paid at the pump” “I tested my truck and got 10 mpg” “My records, even if inadequate, are better than the required estimates in the audit”

8. “I paid at the pump…” This is a use tax, not a sales tax. You need to explain the need to determine where the fuel was used, as well as where it was purchased. You can not do that with out adequate records. The need to determine where is was purchased is critical to determine liability, it is not enough to assume it was paid somewhere. The IFTA requirements make it clear what documentation is requires, and what the consequences for lack of documentation are. If you want the ALJ to not “look out for the little guy” let them know what you have done to help them get the required records, if they know you have tried to help the taxpayer, they may feel less like they should cut them some slack.

9. “ I tested my truck” You use a 4.0 mpg not because it is more accurate, but because it is required where records are not kept. Explain how mpg effects each jurisdictions tax liability. Tests are no substitute for accurate calculation using all miles and all fuel.

10. “My records, even if incomplete are better than the audit which increases my miles and or fuel”. You are a fiduciary for all other jurisdictions. They agreed to keep the required records. They agreed to the consequences of failure to comply for the ability to participate in IFTA.

11. Once you have your ALJ/Judge educated, and your auditors trained, these cases should be ones that you should be able to win consistently.