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2015 - Florida Bar / Department of Revenue Liaison Meeting

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Florida Bar Tax Section / FL DOR Liaison Meeting – 2015

The Florida Bar Tax Section met with the Florida Department of Revenue for a 3 hour "liaison" meeting on January 16, 2015. The liaison meeting is designed to provide two way communication between the FL Bar and the FL DOR concerning issues both parties are facing and to give insight into the direction the FL DOR will be heading in the next year. The purpose of this article to provide those interested parties with meeting notes of what was discussed.

Disclaimer: Any mention of people and places are purely fiction and not intended to represent real people or places. But seriously, this is my personal meeting notes, so please forgive any typos or missing/misspelled names. If someone feels something needs to be changed or added to the meeting notes, please do not hesitate contacting me. Changes are easy to make.

Welcome Introduction: Mark Holcomb

  • With about 40 people in the room from both sides of the isle, everyone introduced themselves. Marshall Stranburg (executive director) addressed the room with thoughts on DOR. The DOR wants to be approachable with feedback from the bar. If there are problems, then let the DOR know.

GTA Update

  • Maria Johnson – General Tax, Program Director
  • Hiring new auditors is a big issue and state has provided new funding to assist. There is a big "grey tsunami" running through the DOR right now, with many long time employees retiring. Retaining good people is a challenge at DOR salary levels.
  • Taxpayer Rights – enhanced training for auditors and other DOR employees will be done annually, which is new. Lack of Taxpayer Rights training at both the FICPA and FL Bar liaison meetings last year were apparently heard.
  • Collection analytics (automation) – problems with automated liens going out in error. Now it goes through the local office to catch possible issues, such as bad mailing address (or the Governor's name)
  • Issues with collection cold calls being mimicked by fraudsters was brought up by one practitioner. It was suggested that the FL DOR might include a caution of fraudsters with the tax warrant, since this is the most likely place people are getting the taxpayer's details in the first place.
  • Suggestion was made to have a policy to notify taxpayer when an issue is resolved, such as use tax matters where it seems to be a problem.
  • Discussion of the public's need to have interactive classes again was raised by the bar. It was mentioned that the DOR was going to put together videos on specific issues, but it was not likely the DOR would implement classes again. It is worth noting that the Taxpayer Bill of Rights requires the DOR to provide "interactive" training to taxpayers. There is a real question whether the current stance of tax publications and TIPs meets this requirement.
  • Refund Sampling – it is available and the DOR has been expanding areas. Supporting documentation electronic filing is being worked on, but is not available yet. Contacting the refund department prior to the refund application about what might be needed can speed up the refund process. New, more detailed refund applications are in the works that might help as well.
  • Confirmation of extension of deadlines outside the typical audit is not happening timely. DOR will work on it. Much of this is happening with the artificial deadlines imposed by the DOR as opposed to the statutory deadlines.

Legislative Update

  • Danielle Scoggins – new with the DOR in Dec 2014 for legislative affairs
  • New leadership in FL Congress this year with new priorities; discussion of new priorities, but nothing to do with state taxes.
  • 333 bills already filled for the 2015 session, include bills related to Commercial Services Tax, reduction of sales tax rate on commercial rent OR an exemption on commercial rent up to a fixed dollar amount (intriguing way to help small businesses). Governor wants $1 billion in tax reduction – so everyone and their mother are coming up with exemptions. One version of the sales tax reduction on rent seems to be very possible this year.
  • FL DOR is not going to have a big legislative push this year as the DOR push was very successful in 2014.
  • Discussed whether DOR could hire 2 year degreed auditors instead of 4 year degreed auditors. Suggestion was made for the DOR to put DOR employees around the state to teach classes at 2 yr community colleges to have students coming out almost ready to hit the ground running. It was mentioned that most of the "4 year mandate" is really coming from the managers at the local offices who feel their auditors should have 4 yr degrees.

Rule Update

  • Tammy Miller – TADR Deputy Director
  • Ready to be approved (effective Jan 19) protest procedures, compromise authority increase, admissions rule, annual forms package – mostly to comply with statute changes.
  • Rules submitted to cabinet – Veterinary diets, electricity decreased and move more to Gross Receipts Tax, wireless E911 and electronic payments, Sales for resale exemption and certificate of exemption.
  • Not sending resale certificates for e-fillers, but paper filer will get one.
  • Rules in development: Bonus depreciation (emergency rules), Fuel Tax surcharge on car sharing services, scholarship funding credits
  • Long term rules being considered: Secondary metals recyclers, sampling, refunds, documentary stamp tax, corporate income tax, real property leases (the latter of which is ripe to finalize, but waiting to get all the powers that be in agreement – hope to have a workshop this summer per Mark Zych).

Economic Update - Download the PowerPoint presentation HERE

  • Bob McKee – Chief Economist
  • Jobs/Unemployment – FL unemployment rate has improved considerably to about 5.8%. Florida starting seeing recession indications in fall 2006 in construction section and our overall recession lasted longer than the rest of the country. We expect employment rate to stay a little higher than historically because many people are re-entering the workforce.
  • Interest Rates – Interest rates have starting ticking up.
  • Bond Rates – practically a zero rates, but expecting to go up in 2015.
  • Vehicle Registrations – Significant increase in car sales over the last few years. The drop in vehicle sales during the great recession was very dramatic, but back to 2000 levels now.
  • Gasoline – prices were below $2/gal before 2003, then went quickly up to over $3.50 a gallon. Back down around $2/gal now. The result is dramatically more money available in Florida's economy based on lower gas prices. Tax on gas is per gallon in Florida, so this does not result in less gas tax. When the savings is spent by consumers, there is a real potential for increased sales tax revenue.
  • Personal income Growth: Personal per capital personal income is about where we were in 2005.
  • Florida Tourism: healthy recovery since the great recession.
  • Median Home Price – Dramatic graph for increase before great recession the huge drop; total sales have returns to pre-depression levels, but median price has not yet.
  • Sales Tax – DOR gets information by 20th of next month and the DOR does track by industry. DOR can't tell difference between tourist spending and resident spending.
  • Question about sales tax affect by 5 years of good weather: Crowd surprised that big storms usually has bigger positive impact on sales tax than good weather. The reason is huge amounts of money flowing into the state from FEMA and insurance companies. Also causes large scale new development.

External Communicates Update

  • Renee Watters – Public Information Officer
  • New Pending Revenue Website shared with audience.

Specific topics of discussion initiated by the Tax Section:

  • FL DOR encrypted email system: problem with saving emails. Does not allow you to initiate a secure communication with DOR, only reply. No way to see all your emails to/from DOR and very hard to see/find past emails. Tumbleweed ended in June 28, 2014. DOR now uses Microsoft Office 365 and OME is the encryption software. – If you select the whole email and hit print to PDF, then it will work. DOR is working with Microsoft to get other fixes, including a mailbox with all secure email for practitioners similar to tumbleweed.
  • DOR currently doesn't allow refunds based on post assessment refund of a payment without approval. DOR says they address it on a case by case basis. 215.26(5) argument. Foster Windows and Doors case is pending on this issue (Case # 14-2043)
  • A question was raised about the Sec. 213.29 200% of tax personal liability being imposed on taxpayers who have entered diversion payment agreements or restitution agreements in the criminal court systems. DOR will do it to establish a lien on personal assets of the individual via 213.29 regularly when payment plan is entered on criminal side. However, collection side will not enforce until after criminal payment plan finished. Each $1 paid via court payment plan will remove $2 of 2123.29 penalty. The DOR does not feel like this is tax collection during criminal prosecution, which is questionable under federal debt collection statutes.
  • Batch mailing of notices mailed well after date on notice. DOR has greatly improved the process by postdating the letters 2 days and mailing within two days. The issue is very rarely coming up in last 6 months. This was a prior complaint by the FL BAR that seems to have been heard and addressed.
  • Addressing TADR Backlog. "We have a back log" per Zych. Set goal to get back to normal letters by end of June. Normal – 4 to 6 months before conferee assigned to a case and 90 days to complete. 38 conferees each have 25 cases…. The back log is cases not getting to conferee's desk, for the most part.
  • When is a "refund" claim complete for purposed of interest due client. "We are as efficient as we can be." Follow up with the auditor or their supervisor if you think something is not moving fast enough or the DOR is asking for too much. New DR-26S is in the works. There is a distinct impression among tax practitioners that refunds are always labeled "incomplete" as a way of avoiding interest. One of these days, someone is going to put a former collection agent on the stand – and things will get interesting.

If you have any other questions about this liaison meeting or other Florida Sales and Use Tax questions, then please don't hesitate to contact me. At the Law Offices of Moffa, Sutton, & Donnini, P.A., the vast majority of our practice is devoted to helping business owners deal with the Florida Department of Revenue. From audits and administrative appeals, to collections and even criminal defense, Florida sales and use tax is simply what we do. With offices in Tampa and Fort Lauderdale, we help businesses and business owners throughout the state. If you have a Florida sales tax question, then please take advantage of our FREE INITIAL CONSULTATION policy. We are here to help.

Florida Sales Tax Attorney; Florida Sales Tax Audit; Tampa Sales Tax Attorney; Tampa sales Tax Audit; Orlando Sales Tax Attorney; Orlando Sales Tax Audit; James Sutton Attorney

About 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's primary practice is Florida tax controversy, with an almost exclusive focus on Florida sales and use tax. Mr. Sutton worked for in the State and Local Tax department of one of the Big Five accounting firms for a number of years and has been an adjunct professor of law at Stetson University College of Law since 2002 teaching State and Local Tax and at Boston University College of Law since 2014 teaching Sales and Use Tax. Mr. Sutton is a frequent speaker on Florida sales and use taxes for the FICPA, Lorman Education, NBI, and the Florida Society of Accountants. Mr. Sutton is also the State and Local Tax Chairman for the American Association of Attorney – Certified Public Accountants. You can read more about Mr. Sutton in his firm BIO HERE.


2014 FICPA DOR LIAISON MEETING SUMMARY, published December 10, 2014, by James Sutton, CPA, Esq.

FLORIDA SALES TAX AUDITS OF CAR DEALERS ON THE RISE, published November 14, 2014, by James Sutton, CPA, Esq.

FL DOR – THE MAGIC BEHIND THE CURTAIN, published November 10, 2014, by James Sutton, CPA, Esq.

WHEN A CLOSED BUSINESS ISN'T CLOSED TO FL DOR, published September 26, 2014, by Matthew Parker, Esq.

FLORIDA SALES TAX ON PRIVATE INVESTIGATORS, published September 9, 2014, by Jerry Donnini, Esq.