THE FLORIDA TAX AUDIT IS OVER
Now You Need Help Challenging the Assessment or Offering to Settle Your Tax Liabilities
NOTICE: As of March 1, 2012 - The Florida Department of Revenue began using a PREDICTIVE BEHAVIORAL MODEL called COLLECTION ANALYTICS to much more quickly track down and seize funds of taxpayers who are delinquent in filing or paying taxes. To read more about the Collection Analytics process and how it might affect you, read our firm article on the topic
NOTICE: If you are in the alcohol or tobacco retail industry and have received notice of an audit or even an estimated assessment, then
CLICK HERE to read a current article on the topic written in August 2012.
You have been through the grueling process of a Florida Tax Audit. If you are reading this, then you are not satisfied with the audit results and the auditor is probably threatening to assess penalties and interest on top of taxes that you either don't owe or you can't afford to pay. The auditors can come up with extreme numbers that can threaten to put almost any business owner completely out of business. The good news is that most types of audit results can be challenged in some way. Perhaps you were simply missing certain records. Perhaps the auditor is under orders to "write up" certain issues that the state would be willing to concede if they are challenged in Tallahassee. Perhaps there is a recent case on point that controls, but the auditors are either not aware of the case or are not allowed to mention the case to the taxpayer. How are you supposed to know how to challenge the audit? Even most good tax professionals out there do not deal with Florida taxes enough to really know the ins and outs of both the Florida tax laws and the administrative procedure of fighting an audit assessment.
Florida tax controversy is 100% of what our law firm handles. We challenge the Florida Department of Revenue at every level from audit to protest, to controversy. Day in and day out, this is simply what we do. Chances are that we have already represented multiple companies in your industry that have handled similar or the exact same issues you are facing. Contact our offices for a FREE INITIAL CONSULTATION with an experienced Florida state and local tax attorney. We will review your audit results and discuss ways to challenge your specific results. In most cases, we can at least get the penalties reduced or eliminated. In many cases, we can reduce the taxes and related interest. In all cases, we can provide the taxpayer with a quick, honest evaluation of your situation and how to proceed. We do all this as part of our free initial evaluation.
You are already looking at a large liability for taxes, penalties, and interest – why would you not at least have a free consultation with an attorney that has extensive experience in challenging the Florida Department of Revenue? Click on the CALL or EMAIL icons at the top of this web page to contact our offices right now for a
FREE INITIAL CONSULTATION on how we can help resolve your troubles with the Florida Department of Revenue.
AT WHAT STAGE OF THE AUDIT PROCESS ARE YOU?
DR-1215/1216 - NOTICE OF INTENT TO MAKE AUDIT CHANGES: The first thing that happens after an audit is the auditor notifies you whether (s)he is going to propose changes to your tax liabilities. Because you are reading this, we can safely assume that the auditor intends to add to your tax woes … or already has. Many taxpayers simply hand everything over to the auditor with no idea of just how dangerous a Florida Tax Audit can be. When the DR-1215/1216 - Notice of Intent to Make Audit Changes is issued, it is rarely anything other than a complete shock. The best advice we can give you if this is where you are in the audit process - DON'T PANIC. The DR-1215/1216 is usually higher than the amount of taxes that are eventually due - and this document creates a ceiling of what could happen. The good news is that the DR-1215/1216 gives you a detailed road map of what the auditor thinks is taxable and, if you know how to understand the document, what you need to do to challenge the assessment. This is also the point when we have the most flexibility to discuss the matter with the auditor. We will attempt to convince the auditor either of the error in his/her ways, or that taxes were over paid in other areas of your business to offset the proposed assessment. The auditor may even ask you to sign paperwork agreeing with the changes. DO NOT SIGN. If you or your accountant have handled the audit to this point, now is the best time to bring in an attorney experienced in Florida Tax Controversy for a free consultation and to help negotiate on your behalf with the auditor.
If the auditor will not see reason, then a taxpayer does have the option to request a Technical Assistance Advisement ("TAA") from the Florida Department of Revenue ("FL DOR"). This will temporarily take the issue out of the auditor's hands and let the specialists from within the FL DOR give their more experience opinion on the matter. Generally, we do not recommend this approach. Requesting a TAA from Tallahassee does not often produce a taxpayer friendly result and the authoritative response makes the matter harder to protest after the audit is close.
We have the experience to know that there are certain issues that simply will not be resolved in your favor at the audit level. Either auditors have been instructed not to settle on your particular type of issue (for example, sales tax on intercompany rent) or the issue is too technical for the auditors to handle. In either case, these types of issues need to be addressed during the protest phase (after the Notice of Proposed Assessment has been issued). It is entirely possible that the issue you are fighting so vehemently to win is a matter that can only be resolved after the audit is final and it is a complete waste of your time and money to fight the issue during the audit. Only an attorney experienced in Florida tax controversy will be able to tell you beforehand whether your issue falls into this category.
REQUEST TO EXTEND THE STATUTE OF LIMITATIONS: Even after the auditor issues the Notice of Intent to Make Audit Changes, the audit still may go on. A supervisor in the Florida Department of Revenue may decide additional work needs to be done or additional transactions are subject to tax. However, the three year Florida Statute of Limitation period is still running and the auditor may request an extension of time. You may be giving up valuable rights by agreeing to extend the statute of limitations and you should consult with an expert before agreeing to waive any of your rights.
Once all reasonable challenges to the DR-1215/1216 Notice of Intent to Make Audit Changes have been made, the auditor to finalize his results and wait for a Notice of Proposed Assessment ("NOPA") to be issued out of Tallahassee. There is no real timeline of when the FL DOR will issue the NOPA other than the three year statute of limitations, but we often see the NOPA surface within three to six weeks after the auditor closes the file.
NOTICE OF PROPOSED ASSESSMENT: After the audit and the Notice of Intent to Make Audit Changes, the next official step for the FL DOR is the issuance of the Notice of Proposed Assessment ("NOPA"). With the issuance of the NOPA, a very narrow timeline begins in which your rights dwindle quickly. The NOPA becomes a Final Assessment for the audit period within 60 days, leaving you a short window of time to challenge the assessment via an administrative protest. If you have received a NOPA and have not at least consulted with an expert in Florida State and Local Tax, then now is the time to do so before your right to challenge the assessment disappears.
ADMINISTRATIVE PROTEST OF NOTICE OF PROPOSED ASSESSMENT: If there is anything about the audit that is challengeable in fact or law, then we can file a PROTEST to administratively challenge the NOPA. At the Law Offices of Moffa, Sutton, & Donnini, P.A., we have filed hundreds of Protests challenging the FL DOR on behalf of taxpayers just like you. In fact, on average, we file two administrative protests a week. You've gone at it alone this far or possibly with a very qualified accounting firm. However, YOU ONLY HAVE 60 DAYS FROM THE NOPA TO FILE AN INFORMAL PROTEST. Your window of opportunity is dwindling fast - Contact us today for a free consultation to learn more how we can draft and file your Florida Tax Protest for you.
NEED ADDITIONAL TIME? You may also find it advantageous to know that once the Protest has been filed it usually takes 9 to 12 months for an answer to become final (via a Notice of Decision). A well drafted protest by an attorney experienced in Florida State and Local Tax Law can buy you additional time. You should also be aware that interest continues to accrue during the protest period, but only if the challenge is unsuccessful. Even if the protest is unsuccessful, then the accrued interest is only at today's low interest rates. Furthermore, after the notice of decision, you can file a petition of reconsideration. It is basically a protest that alleges some new fact or law that asks the DOR to take another look at it.
NEED TO MAKE AN OFFER TO SETTLE YOUR FLORIDA TAX LIABILITY? The good news is that the Florida Department of Revenue will entertain settlement proposals after a Notice of Proposed Assessment has been issued. However, settlement negations with the Florida Department of Revenue are not intuitive and strategies you think would be advantageous to a settlement can often hurt your position. DO NOT try to handle a settlement negotiation without a well seasoned attorney to help you avoid the pitfalls. We are experienced in negotiating with the Florida Department of Revenue to either except less than the proposed assessment or except an installment agreement allowing the taxpayer to pay the proposed assessment over time. We can also help negotiate to lessen or eliminate penalties. If you are facing a liability that you believe you owe but you know you cannot pay - then please contact us today for a free consultation about how to settle your Florida tax assessment.
FILE A FORMAL PROTEST WITH THE DIVISION OF ADMINISTRATIVE HEARINGS ("DOAH"): There is a process to challenge your assessment formally by filing a petition with the Division of Administrative Hearings ("DOAH"). Smaller taxpayers often favor a DOAH hearing over challenging the assessment in Civil Court (discussed below) because you do not have to pay the tax before bringing a formal challenge before the DOAH. However, this is a very formal, court-like proceeding and should be taken very seriously. It is highly recommended that you have an attorney represent you before a DOAH proceeding. The deadline for formally challenging an assessment in a DOAH proceeding is 120 days from the issuance of the NOPA or 60 days from the Notice of Decision if the assessment was already challenged using a protest. Taxpayers should be aware that even if they win in a DOAH proceeding, then Florida Department of Revenue still has the right to decide whether to abide by the DOAH decision. For this reason, most larger businesses with savvy state and local tax counsel will choose to challenge the assessment in civil court rather than a DOAH proceeding. If the taxpayer disagrees with the final order of a DOAH hearing, then the only recourse is appealing the final order to the Florida District Court of Appeals, but only on issues of law, not fact.
CHALLENGE THE ASSESSMENT IN CIVIL COURT: After an unsuccessful informal protest of a Florida Tax Assessment, if the taxpayer believes that the assessment is unjust based on the facts or law, then we usually recommend skipping the DOAH proceeding and challenging the assessment in a Florida Civil Court. Unless a taxpayer has stellar credit, then the down side to challenging an assessment in Civil Court is that the taxpayer must pay the alleged tax due into the registry of the court. There are two big advantages of a Civil Court challenge. First, the matter gets taken out of the hands of the FL DOR auditor and the Office of the General Counsel handles the case. This opens up the door to settlement negotiations again with a group that might see your case in a completely different light, which often allows for settlements in the taxpayer's favor that had not even been previously considered. Second, unlike a DOAH decision that can be overturned by the FL DOR, the decision of the Civil Court is binding on the Florida Department of Revenue. The deadline for filing suit in Civil Court is the same as filing for a DOAH proceeding – 120 days from the NOPA or 60 days after the issues of a Notice of Decision from an informal protest. Preparation for a suit in Civil Court takes time and expertise, so you should not make your decision lightly. There are a lot of trial attorneys, and there are also a number of attorneys that specialize in Federal tax matters, but there are only a handful of attorneys in the entire state of Florida whose primary practice area is Florida State and Local Tax and have significant experience in suing the Florida Department of Revenue. At the Law Offices of Moffa, Sutton, & Donnini, P.A., the primary focus of our firm is Florida Tax Controversy, and our attorneys have the experience you need to take on the Department of Revenue.
Contact our firm today for a free evaluation of your case today.