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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


Choice of Forum in Defending Against a Florida Tax Assessment - Part I

Key to taxpayers protecting their rights in Florida is an understanding of how and why tax decisions and administrative law are so directly connected. Put another way, it is important to know why administrative law informs taxation. The two subjects are interconnected through Florida statutes which provide for protection of taxpayer rights and due process in the administration of taxes imposed by Florida. Basic to this connection are certain statutory and procedural requirements along with a jurisprudential overlay of cases interpreting these laws.. These procedural and due process rights are expressed in administrative terminology as the “substantial interests” of a person. The phrase is employed by the legislature in Section 120.52(13) by defining the term “party” as a persons whose “substantial interests” are being determined in a proceeding. Any taxpayer who receive an assessment notice, once final, qualifies as a party as the final assessment is a decision affecting their “substantial interests”.

The “On Ramp” to challenging tax decisions

The Florida legislature has required that when an agency makes a decision affecting “substantial interests”, it must supply both an explanation of the decision and an opportunity to challenge the decision. The opportunity to challenge gives taxpayers specific rights and limits. These due process rights are found in Chapter 72, Chapter 120 and additionally in Chapter 194. Two of these separate chapters, 72 and 120, are linked by Section 72.011 Florida statutes. Chapter 194 separately address access to court through Section 194.171 F.S. This chapter deals with local property taxation, generally known as Ad valorum tax.

Taking action under Section 72.011 F.S.

This statute has many key features important to protecting taxpayer rights. It supplies express jurisdiction to the circuit courts of Florida to hear challenges to assessments of taxes and fees as well as refund actions brought for the specific laws listed in subsection 72.011(1) (a). Also, because this is a jurisdictional statute, it establishes a specific time limit for taxpayers to challenge assessments. The time limit is “60 days after the date on which the assessment becomes final.” Failure to timely challenge by filing a complaint means the circuit court loses jurisdiction to hear the challenge. Additional discussion of this limitation will be addressed in Part II of this article.

Additional approaches to challenge tax assessments and refund denials.

Another statutory “on ramp” to court is found in Chapter 120. Section 72.011 (1) (a) F.S. gives a right to challenge a tax assessment, fee, surcharge, penalty or refund denial under “the provision of Chapter 120”. Section 120.569 F.S. provides a right to challenge an assessment or denial decision by the various state agencies listed in the statute. It is important to note that tax assessment challenges brought under this statute are heard by a separate agency from the taxing authority. Jurisdiction is given to the Division of Administrative Hearings (DOAH) for determination of matters in which “disputed issues of material fact” exist. Section 120.569 is in fact entitled “[d]ecisions which affect substantial interests”.

A challenge through the administrative avenue also is important, as will be discussed later, because a tax assessment challenge can be combined in that forum with other forms of challenge when a tax, fee or refund denial is driven not just by a dispute fact over the amount of tax due, but by objection to the underlying rules or policies which impact how the agency makes its decisions. These types of challenges are reserved to the administrative forum rather than through the circuit courts of Florida. Additional discussion concerning the nature of these challenges will be addressed in Part II.

More comments on the Administrative forum choice

Choice of forum is an important consideration to evaluate before challenging a tax assessment, fee, surcharge, penalty or refund denial. The features of each civil forum ( administrative and circuit court) are important. Generally tax litigation in Florida can follow either path. One such factor in weighing the decision is the type of evidence a petitioner has to offer. The administrative forum allows introduction of what is known in the law as hearsay evidence. Hearsay evidence can be presented with certain limitations as to reliance on such evidence. These limitations are set forth in Section 120.57. Generally, this is supplementary information but it is useful to bolster or further support for admissible evidence to win the case. Section 120.57 describes the limitations of using this type of evidence. Generally, the administrative forum offers a less formal setting are routinely heard more quickly than in circuit court. Also, and an important consideration, is the fact that the administrative hearings process allows for testimony from more than one location via video appearances for remote witnesses. This feature saves the petitioner both time and money.

End of Part I

About the Firm: Formed in 1991, the Law Offices of Moffa, Sutton, & Donnini, P.A. is a law firm with a primary practice area of Florida tax controversy and a heavy emphasis on Florida sales and use tax. With offices in Fort Lauderdale, Tampa, and Tallahassee, the firm defends business owners against the Florida Department of Revenue from the initial audit notice through administrative protest and litigation as well as collections, revocations, and criminal investigations.

undefinedAbout the Author: James (Jim) F. McAuley is an experienced attorney, joining the firm in 2015 after an exemplary career with the state of Florida. Holding the Florida Bar board certification as a specialist in State and Federal Administrative Law, Mr. McAuley represented the State of Florida for more than 20 years in the area of state and local taxation and administrative law with an emphasis on litigation. Mr. McAuley is Board Certified by the Florida Bar in the area of State and Federal Government Administrative Practice. Mr. McAuley holds the highest rating given to lawyers by Martindale Hubbell (Av) and has maintained that rating for more than 15 years. He is also a published legal author in both State taxation and Administrative law. He is an alumni & author of the Nova Law Review (Fall 2007). You can read more about Mr. McAuley in his firm bio.

ADDITIONAL RESOURCES

FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, CPA, Esq.

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

BURDEN OF PROOF & PERSUASION IN FL TAX CASES, published May 31, 2015, by James McAuley, Esq.
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