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100 West Cypress Creek Road, Suite 930

Fort Lauderdale, FL 33309

Office (954) 761-3700

Fax (954) 761-1004

8875 Hidden river PKWY, Suite 230

Tampa, FL 33637

Office (813) 775-2131

Fax (866) 388-3029

3500 Financial Plaza, Suite 330

Tallahassee, FL 32312

Office (850) 250-3830

Fax (866) 388-3029


FLORIDA SALES TAX INFORMAL WRITTEN PROTEST

If you are here reading about your right to file a FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, then you have just been through a Florida sales and use tax audit, a mind numbing experience in which a Florida Department of Revenue sales tax auditor can allege almost any amounts are taxable and the burden falls on you to prove that the allegations are wrong. You were also likely shocked to discover the sales tax auditor has the power to estimate taxable sales or taxable purchases and you were appalled at just how unreasonably high those estimates were. You received a DR-1215 Notice of Intent to Make Audit Changes with all the details behind the auditor’s allegations of taxes due and finally you received the Notice of Proposed Assessment. The auditor will not return your calls or emails and you feel like a hurricane may have just ripped away parts of your business except that this is not the type of damage an insurance policy can protect you against. You sit there staring at the Notice of Proposed Assessment, leaning between disbelief and anger, and you read about your right to file an informal written protest no later than a specific date, which just happens to be 60 calendar days from the date at the top of the letter. There is no way your business can survive this tax assessment and you want to know how to fight back. The purpose of this article is to discuss your right to challenge the sales tax audit assessment by filing an INFORMAL WRITTEN PROTEST with the Department of Revenue in Tallahassee.

The first thing you need to know is that the ability to file an Informal Written Protest to a sales tax audit is a statutory right of every taxpayer in Florida as long as it is filed timely. So, pay very close attention to the deadlines given in the Notice of Proposed Assessment. Per Rule 12-6.003(1)(d), Florida Administrative Code (“FAC”), you have the ability to make a written request two 30-day extensions of time to file the Protest as long as each request is postmarked on or before the deadline for filing the Protest. If you are going to request an extension of time to file the Protest, I suggest you do so well before the deadline, cite the rule mentioned above, and fax the request to the fax number (and keep the confirmation of fax receipt). If you miss the deadline for filing the informal written protest, then you still have another 60 days to file a more formal protest or go to court. If you are in this situation, then I suggest you call the number at the top of this page to discuss your options.

Although the name implies that the protest is “informal,” you still have to follow certain regulatory procedures for your Protest to be accepted as a valid protest. One would think the Florida Department of Revenue forms would spell out exactly what is required to file a protest, right? Of course not. The Notice of Proposed Assessment merely gives you the filing deadline and the address or fax number for filing the protest. They will usually include a copy of the Taxpayer Bill of Rights with the Protest, but the Taxpayer Bill of Rights doesn’t spell out what you need to include to make your Protest valid. This lack of information is why you are here and we are glad to help. Rule 12-6.003(2)(a), FAC, provides a detailed list of what you must include in your protest as follows:

1. The taxpayer’s name, address, telephone number, federal taxpayer identifying number, and audit number.

2. The tax type, the periods, and the dollar amount of tax, interest, or penalty protested.

3. A list of the unagreed items.

4. A statement of facts and a description of any additional information not previously available that supports the list of unagreed items.

5. A statement explaining the law or other authority on which the taxpayer’s position is based.

6. A copy of the Assessment.

7. A statement whether oral presentation and argument are requested.

The next thing you will be glad to know about the informal protest process is that you will finally be able to argue you case before someone that is not the auditor or their supervisor. That being said, you will still be dealing with a government employee and simply describing how ridiculous the auditor was being is not an effective argument. Neither is saying “there is no way my sales were that high,” a strategy I have seen far too many times to count. Your business is at stake and now is the time to make the most effective argument you can. That means you need to understand the law and rules surrounding the specific transactions the assessment is attempting to tax. So while you have the above list of what needs to be included in a Protest, it is item number 5 in that list that is the most crucial. If you don’t cite the appropriate law and/or rules, present the facts arguing how the auditor misapplied the law, and provide the right documentation to back up your argument, then

The auditor may have cited some statutes or rules in the DR-1215 Notice of Intent to Make Audit Changes. This is a good place to start and you can find the full text of the current Florida sales and use tax statutes and the rules linked at the end of this article. But you also need to realize the auditor may be misunderstanding your business or transactions, thereby using the wrong statutes or rules. Alternatively, the auditor may have understood your situation, but be citing the wrong statutes or rules. There may be case law out there that interprets the statute or rules differently than the auditor is willing to admit. For these reasons, we offer a free initial consultation to review your audit assessment and help you find where the auditor made mistakes and identify the laws or rules that help you effectively fight back. We do not hold back in with our analysis and we do not get offended if you decide you want to fight this on your own. Since 1991, our law firm has been primarily focused on fighting the Florida Department of Revenue for companies just like yours. If you call the number at the top of this website, then you can speak directly with the author of this article. Given how long I’ve been practicing and the fact I am almost entirely focused on Florida sales and use tax controversy, there is a high likelihood that I would have run into your exact situation before. That means that I can most likely steer you in the right direction with your informal written protest with a simple phone call reviewing your DR-1215 Notice of Intent to Make Audit changes. You might also decide that it is worth it to have someone represent you that really knows what they are doing. Either way, you will know more and have a better chance of saving your business if you reach out. We are here to help.

If you do decide to handle the protest yourself, then please make sure to include all possible relevant documents to defend your position. The Department of Revenue lobbied and got a statute enacted that prevents Taxpayers from using documents in litigation that were not provided during the informal protest process. So if you are not successful in with your informal written protest, then you make limit your ability to effectively challenge the state in court. We file litigation against the Florida Department of Revenue more than any other law firm, so this is an issue that we’ve seen enough to know just how much it can hurt a Taxpayer.

One final note, the Department of Revenue auditors are supposed to remove penalties for first time audits unless there is a clear indication of willful intent to evade tax. Far too often the auditors will leave 25% penalties on at the end of the audit. If your audit assessment includes penalties, then this may be reason enough to file an informal written protest. You can also request a payment plan to pay back the remaining taxes over time during the protest process.

If you made it to the end of this article, then you must have substantial interests at stake including employees whom you feel responsible for as well as your family’s livelihood. Please contact me to go over your case with no obligation to hire me. If I don’t answer, then leave me a message and I will personally call you back asap. My direct number is 813-775-2131 and my email address is JamesSutton@FloridaSalesTax.com. My firm and I are here to help, and I look forward to speaking with you.

undefinedAbout the Author: Mr. Sutton is a Florida licensed CPA and Attorney and a shareholder in the law firm the Law Offices of Moffa, Sutton, & Donnini, P.A. Mr. Sutton is in charge of the Tampa office of the firm and his primary practice area is Florida sales and use tax controversy. Mr. Sutton worked in the State and Local Tax department of Arthur Andersen for a number of years and was an adjunct professor at Stetson University College of Law from 2002 – 2013 as well as at Boston University’s LLM in Tax Law teaching classes on State and Local Taxation. Mr. Sutton is an active member in the FICPA, NIADA, Florida Bar, and AICPA. Mr. Sutton also serves as the Chairman of State and Local Tax for the American Academy of Attorney-CPA’s and speaks frequently throughout Florida on Florida tax matters. You can read more about Mr. Sutton in his firm BIO.

At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is state and local taxes, with a very heavy emphasis in sales and use tax. We have defended Florida businesses against the state departments of revenue since 1991 and have well over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We also have multiple former Florida Department of Revenue agents on staff. So, we can honestly say that Florida sales and use tax controversy is our business. Call our offices today for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.

AUTHORITY

You can find the current Florida sales tax statutes HERE

You can find the current Florida sales tax administrative rules HERE

Florida Rule 12-6.003 Protest of Notices of Proposed Assessment by the Department Which Resulted From An Audit

ADDITIONAL RESOURCES

Florida Sales Tax Audits – Common Industries Targeted, published November 9, 2018, by Steve Middle, Former FL DOR Sales Tax Auditor

What Services Are Subject To Sales Tax In Florida, published May 1, 2012, by James Sutton, CPA, Esq.

Florida Sales Tax Attorneys and CPAs – Moffa Sutton Donnini, published December 14, 2017, by James Sutton, CPA, Esq.

FL DOR Abuses Convenience Store Industry, published October 4, 2015, by James Sutton, CPA, Esq.

FL Tax Alert – Used Car Dealers Targeted!!!!, published January 19, 2013, by James Sutton, CPA, Esq.

Post-Wayfair – Can You Afford to Wait to Register?, published August 8, 2018, by James Sutton, CPA, Esq.

©Copyright 2018, James H Sutton, Jr. – All Rights Reserved
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