ORLANDO USED CAR DEALER ARRESTED FOR SALES TAX

ORLANDO USED CAR DEALER ARRESTED FOR SALES TAX

2014 appeared to be the Year of the Florida Used Car Dealer, but not in a good way. As of early July 2014, at least a dozen used car dealers had been arrested on charges of sales tax fraud according to new releases by the Florida Department of Revenue. Charges filed against used car dealers for collected but not remitted sales tax range from as low as $14,000 to over $500,000. The dealerships were located all over the state including Longwood, Hollywood, Sanford, Orlando, Miami, Winter Springs, Davie, and Largo. If convicted, the used car dealers could be facing anywhere from 5 years in jail and $5,000 in fines to 30 years in jail and $10,000 in fines – on top of having to pay back the taxes, interest, and investigation fees.

The trend is continuing in 2015. On May 1, 2015, [name omitted] of Top Quality Auto Sales, LLC was arrested by the Orange County Sheriff's office on felony charges related to theft of state funds. With only $13,000 in alleged sales tax not remitted and 6 missing sales tax returns, the business owner is facing two 3rd degree felony counts, each with up to five years in jail. This is on top of being required to repay the stolen tax, plus penalties, interest, and investigation costs.

Florida law requires business owners that sell, repair, rent, or provide services to act as an agent to the state and they must remit all sales tax collected to state of Florida. Car dealers are a significant source of sales tax revenue for the state of Florida and, as such, face close scrutiny from the Florida Department of Revenue. Car dealers throughout Florida are at risk because the FL DOR has records directly from the DMV as to exactly which vehicles are sold by a dealer. In fact, the FL DOR announced plans to start a statewide audit campaign on the used car dealer industry starting late summer, 2014. If you are in this industry, then please take your sales tax responsibilities very, very seriously.

Further, Florida sales tax is required to be separately stated on the customers invoice and Florida law mandates that the taxes collected be the property of the state from the moment it is collected from the customer. Therefore, despite putting these amounts in their own checking accounts, business owners must segregate sales tax collect and remit it to the state in a timely fashion.

In every new release regarding the arrest of a used car dealer, the Executive Director of the Florida Department of Revenue is quoted saying:

It is an honor to serve the vast majority of Florida businesses who comply with State tax requirements. For those that don't, it is our job to enforce the law and ensure honest businesses are not placed at a competitive disadvantage by those who ignore the law or worse intentionally collect and steal taxpayer dollars

Collecting but not remitted Florida sales tax is a crime under Florida law and must be taken extremely seriously. It is shocking to many business owners to know that the Florida Department of Revenue is dramatically more likely to arrest a business owner for tax fraud than the Internal Revenue Service ("IRS"). While both the IRS and the FL DOR will put tax liens on the business property (called a "Tax Warrant" in Florida), the Florida Department of Revenue will also charge and put the business owner in jail if the taxes and all associated penalties, interest, fines, and costs are not remitted.

If you or someone you know has collected but not remitted Florida sales tax, then please contact an attorney experienced in Florida sales and use tax criminal defense for a confidential conversation to discuss his or her options. There are mechanisms in place that allow individuals or their attorney to negotiate with the state to enter into a payment plan. While the monetary sanctions can be harsh, it is better than losing one's freedom. Like any other crime, anything said by you is an admission and can be used against you at a criminal trial. Therefore, it is wise to have an attorney speak on your behalf.

At the Law Office of the Law Offices of Moffa, Sutton, & Donnini, P.A., our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against criminal charges related to Florida sales and use taxes for more than 20 years. In fact, the only criminal cases we handle are related to Florida sales and use taxes. Our partners are both CPAs and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.

ADDITIONAL RESOURCES

FL TAX ALERT – USED CAR DEALERS TARGETED!!!!, January 19, 2013, by James Sutton, CPA, Esq.

FL TAX – VOLUNTARY DISCLOSURE CAN BE THE PERFECT SOLUTION, October, 5, 2012, by Jerry Donnini, Esq.

FL TAX ALERT – CONVENIENCE STORE OWNERS TARGETED!, August 16, 2012, by James Sutton, CPA, Esq., and Jerry Donnini, Esq.

TAMPA JEWELRY STORE MANAGER ARRESTED FOR SALES TAX THEFT, August 30, 2012, by James Sutton, CPA, Esq.

MIAMI AUTO REPAIR SHOP OWNER ARRESTED FOR SALES TAX, August 25, 2012, by Jerry Donnini, Esq.

FT. MYERS BUINESS OWNER ARRESTED FOR FAILING TO REMIT ONLY $8,000 IN SALES TAX COLLECTED, August 11, 2012, by James Sutton, CPA, Esq.

FL DOR'S GREATEST WEAPON – REVOCATION OF DEALER'S SALES TAX CERTIFICATE, August 6, 2012, by Jerry Donnini, Esq.

CRIPPLING PENALTIES UNDER FLORIDA SALES AND USE TAX LAW, July 19, 2012, by James Sutton, CPA, Esq.

WHAT SERVICES ARE SUBJECT TO SALES TAX IN FLORIDA, May 1, 2012, by James Sutton, CPA, Esq.

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