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Funding Our Nation's Highway Programs and Leveling the Playing Field

Collage: Bridge, Currency and Trucks

Risks or Flags that Could
  Indicate State Non-Compliance


It is important during the compliance review process to know how to identify risks or flags that could point to a state being non-compliant with HVUT requirements. Approaches to detecting these risks or flags should be discussed during the preliminary meeting. Most of these risks can be substantially reduced or eliminated through remedial measures and the implementation of a good quality assurance program. These risks or flags include:

  • Numerous files with incomplete information
  • State agents who have little knowledge of the registration process or agencies with no quality assurance process
  • State agents with little knowledge of the various IRS stamps used in the state
  • States that do not have a registration system capable of generating reports that can identify HVUT transactions, preferably by county and tag agency
  • The presence of counties or local offices that register a disproportionate share of vehicles
  • Body language, such as an unwillingness to make eye contact, that suggests something suspicious
  • Returns with many corrections
  • Evidence of sloppy recordkeeping on the part of state or local agents
  • Inadequate training of agents charged with registering vehicles or maintaining registration records
  • States that have not implemented the recommendations of previous reviews
  • States that delegate responsibility to register vehicles to counties and private agents
  • States that do not have a documented process for verifying proof of payment or whose procedures are outdated
  • States with high turnover or inadequate institutional knowledge
  • Detection of multi-generational copies of the 2290 Schedule 1 being presented as proof of payment
  • State or tag agency's lack of understanding as it relates to what constitutes proof of payment and when a copy of the method of payment is required
  • States that do not have a strong quality assurance process

When these flags are detected, they should be investigated to determine if the state is in non-compliance or to detect and address HVUT evasion. The outcome of this investigation should be documented in the compliance review report.

 

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