Tax and Revenue Administration  International Fuel Tax Agreement (IFTA)  Information Circular IFTA-4R5

IFTA-4R5 / June 2005

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - IFTA:
INTERNATIONAL FUEL TAX AGREEMENT - ADMINISTRATION

• Refunds
• Interest Charges
• Late Filing Penalty
• Licence Revocation, Reinstatement and Cancellation
• Assessments
• Objections and Appeals
• Enforcement, Assessments and Penalties
• Record Keeping Requirements

2. The Alberta IFTA Fuel Tax Return (AT2059) and remittance must be submitted to TRA by the last day of the month immediately following a quarterly reporting period. If the return and the remittance are not received by the due date, interest is charged on any tax due to any jurisdiction from the due date to the date when both the return and the remittance have been received. Interest column 8a has been added to the Alberta IFTA Fuel Type Schedule (AT2060) for reporting these interest calculations. It is not mandatory to complete this column at the time of filing. At the time of processing the return, TRA will calculate any applicable interest charges and issue a Notice of Assessment.

3. If a return or remittance is received late, interest is charged on the calculated taxes due to jurisdictions. Interest is not calculated on any overpayments to other jurisdictions that may also be reported. In this calculation, there is no set-off among the amounts due to, and due from, the various jurisdictions.

7. A penalty is charged for late filing of a return or failure to file a return, but not for a deficient payment. For deficient payments, interest charges will apply. Refer to section 2 above, the interest charges section of this circular.

8. The late filing penalty amount assessed is $50 or 10 percent of the assessed delinquent taxes, whichever is greater, for failing to file a return or filing a late return. Nil and credit returns filed late will be assessed the $50 penalty.

11. A carrier’s Alberta IFTA Fuel Tax Licence may be revoked for failing to:

a) file the Alberta IFTA Fuel Tax Return and remit taxes,

b) provide security for fuel taxes payable when requested to do so,

c) failure to maintain proper records (see paragraphs 21 through 27 below), or

d) make records available to TRA upon request.

Assessments

14. A Notice of Assessment will be issued to the Alberta IFTA Licensee if changes have been made to the return during processing. The notice will set out any balance due or refundable, including one resulting from calculation errors. An assessment may be issued in the case where a licensee has not filed a return by the due date. The notice of assessment in this case would estimate the tax that should have been reported and remitted by the licensee. Reassessments may later be issued as a result of audits or the provision of new information.

Objections and Appeals

15. If a licensee disagrees with an assessment or a reassessment issued by TRA, the licensee may file a Notice of Objection in the prescribed form setting out the reasons for the objection and relevant facts. An objection may also be filed to the refusal to issue a licence, the revocation of a licence, or the cancellation of a licence. The Notice of Objection must be filed within 90 days of the date of the action to which the licensee is objecting. It may be either faxed to (780) 427-5074 or sent by mail to:

TAX SERVICES BRANCH
TAX AND REVENUE ADMINISTRATION
9811 109 St
EDMONTON AB T5K 2L5

16. The Notice of Objection forms are available on our web site or by telephoning 427-3044 (Edmonton calling area) or 310-0000/(780) 427-3044 toll-free within Alberta.
    
    
17. The Tax Services Branch will review the objection and notify the objector of the decision by registered letter.
    
    
18. If the licensee has not received a response from the Tax Services branch within 90 days or is dissatisfied with the disposition of its objection, the licensee may file an appeal to the Court of Queen’s Bench. Where4 the licensee is not satisfied with the response, it must file the appeal within 90 days of the date of mailing of TRA's response to the objection. In either case the appeal must be served on the Minister of Finance and a copy must be filed with the Clerk of the Court. The Court may confirm, vary or vacate the assessment or reassessment leading to the appeal. The Court may make an order relating to costs as it deems appropriate. The decision of the Court may, in some circumstances, be appealed to the Alberta Court of Appeal, and subsequently to the Supreme Court of Canada.

Enforcement, Assessments and Penalties

19. The Minister of Finance is empowered to enforce the Fuel Tax Act and ensure that the terms of IFTA are met. Through use of appointed officials and, when warranted, the courts, the Minister may:

    a) conduct inspections and audits of the licensee’s records to determine whether the correct amount of tax has been paid;

    b) demand any information necessary to determine the amount of tax that is payable, including demands by court action or through application for a search warrant;

    c) assess or reassess the amount of any tax and/or penalties payable within four years from the end of the calendar year in which it became payable;

    d) charge interest on any unpaid tax for the period over which the amount was payable;

    e) take legal action to recover any taxes, penalties and interest payable;

    f) assess against a person or business with tax owing, a penalty of 25 percent of the amount owing, if, in TRA’s opinion, the amount is owing because of neglect, carelessness or wilful default by, or on behalf of, the person or business that owes the amount, or because of fraud or evasion committed by, or on behalf of, that person or business; and

    g) require a licensee to provide surety if the licensee has failed to file timely reports, tax has not been remitted, or if audit determines problems severe enough that, in TRA’s opinion, surety is required to protect the interests of IFTA jurisdictions.

20. Any person who:

• makes false statements;
• makes records unavailable; makes false or deceptive entries in records;
• alters or destroys records; or
• wilfully evades, or attempts to evade, compliance with the Fuel Tax Act and Regulations
  
  is subject to prosecution. Upon conviction, the person is subject to a fine of up to 300 percent of the tax evaded or sought to be evaded. Along with the fine, the person may be sentenced to imprisonment for up to two years.

Record Keeping Requirements

21. The licensee must maintain records that support the information reported on the Alberta IFTA Fuel Tax Return. All licensees shall maintain detailed distance records for each vehicle. Such records shall contain, but not be limited to:

    a) both taxable and non-taxable use of fuel,

    b) distance travelled for taxable and non-taxable use,

    c) distance records for each vehicle for each jurisdiction in which the vehicle operates.
    
    The licensee must maintain records for tax-exempt fuel separate from those for taxable fuel.

22. The Individual Vehicle Mileage Record, as required for the International Registration Plan, is an acceptable source document for recording vehicle distance information. Another acceptable source document is a trip report which must include the following data:

    a) starting and ending dates of the trip,

    b) origin of trip and destination (including city and state),

    c) either routes of travel on the trip or beginning and ending odometer readings for the trip,

    d) total trip kilometres,

    e) distance by jurisdiction,

    f) vehicle unit number or vehicle identification number,

    g) vehicle fleet number, and

    h) licensee’s name.

23. The carrier must maintain complete records of all fuel purchases. Separate totals must be compiled for each fuel type. The fuel records must contain the following:
    

• date of purchase,
• name and address of the seller,
• number of gallons or litres purchased,
• type of fuel purchased,
• price per gallon or litre,
• unit number of the vehicle into which the fuel was placed, and
• purchaser’s signature.

24. Acceptable fuel receipts include an invoice, a credit card receipt or verifiable microfilm/microfiche of an invoice. Receipts which contain alterations or erasures will not be accepted.
    
    
25. A licensee who maintains a bulk fuel storage facility will typically base the IFTA tax calculations on fuel withdrawals from the facility instead of on fuel purchases delivered to the facility. The following records should be maintained in support of each withdrawal:

• date of withdrawal,
• number of gallons or litres withdrawn,
• fuel type, and
• unit number of the vehicle into which the fuel was placed.
  
  Purchase and inventory records must be retained to substantiate that tax was paid on all bulk fuel purchases.

26. The records referred to above must be maintained for a period of four years from the due date of the return or the date it was filed, whichever is later. Records must be made available upon request by any member jurisdiction. Failure to provide records demanded for the purpose of audit will extend the four-year retention requirement until the records are provided. Non-compliance with any record-keeping requirement may be cause for revocation of the Alberta IFTA Fuel Tax License.
    
    
27. The licensee’s records must be maintained at a location in Alberta, unless written permission has been provided to maintain the records elsewhere. Permission to maintain records outside of Canada will only be provided on the condition that the records be shipped to Alberta for inspection or audit when requested, or the carrier agrees to pay the travel costs of auditors to audit or inspect the records where they are kept.