IRS Logo
Print - Click this link to Print this page

Trucking Industry Overview - Government Regulatory Requirements

Affected IRM: X.XX.X

"This document is not an official pronouncement of the law or the position of the Service and cannot be used, or cited, or relied upon as such."

Government Regulatory Requirements



Food and Drug Administration


Bureau of Alcohol, Tobacco and Firearms


Drug Enforcement Agency


Fish and Wildlife Service


Department of Transportation


Department of Agriculture


Environmental Protection Agency


Federal Communications Commission


Department of Defense


Surface transportation Board


Effect of government regulation on audit

Government agencies (other than the IRS) are mostly concerned with:

  1. Safety violations.
  2. Price floors.
  3. Weight classes and rates.

For the most part, the Government agencies are interested in monitoring items that are of little use in an audit of a tax return. They are mainly interested in the following areas:

  1. Freight Rates.
  2. Issuance of operating permits.
  3. Authority to establish routes and types of commodities.
  4. Provides guidelines on financial and accounting practices.
  5. Provides safety and hazardous materials guidelines.
  6. Hours of service for drivers.

Although the authority of some of these regulatory agencies has been diminished due to deregulation of the industry, their presence is still effective in setting standards for the industry to follow.

A. Federal Requirements

There are three Federal agencies that are involved in the regulation of trucking companies.

U.S. Customs
U.S. Customs is the Federal agency, which oversees the entry of foreign goods into the United States. They operate under Title 19 of the Code of Federal Regulations. They issue customs house licenses which allows a third party to act as an agent for the importer (consignee) in processing the paperwork and payment of customs duties before the goods are released for their final destination.

Department of Transportation (DOT)
DOT is responsible for distributing the Federal funding for transportation. In 2001, over $30 billion was collected in highway use taxes by Federal and state governments which is used for the construction and repair of roads. The Federal Motor Carrier Safety Administration (FMCSA), a department within the DOT, sets and enforces the Motor Carrier Safety Regulations (MCSR) which set safety standards for the design, manufacture, and operation of transportation equipment. The FMCSA regulates the operations of private carriers (such as, specifies the number of hours a driver can work without rest, the interstate transport of chemicals and other hazardous cargoes). The FMCSA requires a record be kept on the inspection and repair history of vehicles used in commercial carriage. The DOT web site is a valuable tool to find specific information about every trucking company that operates in the U.S.

DOT Web Address:

Information available on each trucking company from the DOT Web Site:

  • Accidents/Crashes reported from all states
  • Insurance Companies that furnish coverage,
  • Insurance coverage limits
  • Self Insurance
  • Number of trucks owned
  • Number of drivers
  • Number of miles driven per year
  • Type of freight hauled
  • Penalties charged by DOT (each specific infraction is listed by date and location)
  • Safety inspection results (each specific inspection is listed by date, vehicle #, and location)
  • Federal Motor Carrier Safety Administration (FMCSA) regulations
  • DOT & FMCSA contacts

Federal Motor Carrier Safety Regulations Section 395.3 sets Maximum Driving Time.
Prior to January 4, 2004, a driver shall not exceed:

  1. More than 10 hours following 8 consecutive hours off duty; or
  2. For any period after having been on duty 15 hours following 8 consecutive hours off duty,
  3. More than 60 hours in any consecutive 7-day period or
  4. More than 70 hours in any consecutive 8-day period.

New driving time Limits beginning January 4, 2004:
The new rules impose three basic limits.

  1. Maximum driving time is 11 hours. After 11 hours behind the wheel, the driver must have 10 hours of rest.
  2. Maximum on-duty time is 14 hours. After 14 hours on duty (which may or may not include up to 11 hours of driving) the driver cannot operate a commercial vehicle until he has had 10 hours of rest. The 14-hour on duty time begins when a driver comes on duty and can only be stopped with a minimum two-hour break in the sleeper.
  3. Maximum 60 hours on duty in any seven consecutive days. If the company operates 7 days per week, the maximum is 70 hours in any eight consecutive days. Drivers may restart the 7/8 day period with 34 hours or more off duty.

Effective October 1, 2005:

Commercial motor vehicle drivers using their sleeper berth provision must take at least 8 consecutive hours in the sleeper berth, plus 2 consecutive hours either in the sleeper berth, off-duty or any combination of the two.

Federal Maritime Commission (FMC)
FMC regulates the overseas shipping industry. They are responsible for issuing licenses for non vessel operating common carriers and regulating the tariffs charged for ocean freight shipments.

B. State Requirements

There are two state agencies that have regulatory authority over the trucking industry in each state the Public Utilities Commission and the Department of Motor Vehicles.

Public Utilities Commission (PUC)

The Tariff and License branch in the transportation division of the PUC regulates intrastate trucking. Intrastate trucking refers to freight shipments commencing and concluding within the state. Highway common carriers operating within the boundaries of one state (intrastate trucking) are required to have PUC operating authority or a trip permit (bingo stamps) to carry freight within the state. The registered owner must also file proof of insurance (certificate of insurance) with the PUC.

The PUC issues operating permits and sets minimum and maximum intrastate freight rates. The PUC requires trucking firms, depending on the size of the annual gross receipts, to file quarterly and/or annual reports.

Department of Motor Vehicles (DMV)

The DMV requires the registration of vehicles and licensing of drivers. To register or renew the registration on a tractor, the owner has to show proof of payment for the Heavy Vehicle Use Tax, Form 2290. A schedule of equipment registered to the company or subhauler is required to be filed with the Form 2290. DMV records when a specific vehicle was licensed and titled (placed in service - for depreciation purposes). DMV "title file" records purchase price, from whom a vehicle was purchased and financed. DMV "title file" also records the date and to whom a vehicle was sold and the reported sale price. For one stop shopping telephone numbers for each state DMV, contact the LMSB trucking technical advisor.


A highway common carrier or contract carrier is required to file their tariff rates or contract rate schedule with the PUC. These rates are dependent upon the classification of goods, type of load, weight, and distance the freight is to be hauled. Common tariff rate publications are:

  1. Distance Table 8 issued by the PUC.
  2. Hazardous Material Tariff.
  3. National Motor Freight Classification.
  4. Rocky Mountain Tariff.

C. Local Requirements

For the most part local Government agencies are interested in monitoring items that are of little use in an audit of a tax return. A few counties and cities charge a gross receipts tax for income earned in their area.

Chapters 5, 6, & 7 | Table of Contents | Chapter 9

Page Last Reviewed or Updated: 05-Mar-2015