On December 29, 2021, we posted an Article on our website entitled, “Florida DOR’s 2022 Legislative Package BAD for Florida Business”, which included a link to the 20 Legislative Concepts proposed and prepared by the Florida Department of Revenue. The Firm is now going to be posting a series of articles involving a more in-depth review of these 20 concepts, and how they may impact you and your business.
DOR’s first concept is called “Pre-Audit Preparation Period”. See attached to this article a Link to this concept. Under current law, the DOR has a 1-year period to complete an audit pursuant to s. 213.345, Fla. Stat., and this period begins with the issuance on the Notice of Intent to Audit Books and Records (DR-840). The 840 gives the Taxpayer 60-day notice to begin to prepare and gather records that will be needed to conduct the audit and gives the Taxpayer time to retain qualified representation. The right to representation is a fundamental right of jurisprudence in America and is one of the provisions found in Florida’s Taxpayer’s Bill of Rights. See subsection 213.015(3), Fla. Stat. This legislative concept is clearly an attack on these rights. The Department essentially admits as much, in a roundabout fashion, when it attempts to justify the concept by stating (whining) that, under current law, “some practitioners have argued that the Department can have no contact with the taxpayer”.
Not only does this concept interfere with a Taxpayer’s right to representation, but its DOR’s attempt also to try to get the Taxpayer to make inadvertent comments or statements that could and will be used against the Taxpayer during the audit. DOR would welcome the opportunity to interrogate a Taxpayer before it has had an opportunity to retain competent representation. However, giving DOR permission to do so is bad for taxpayers. DOR auditors should not be allowed to take advantage of unknowing Taxpayers, who are already in shock from receiving the 840 in the first place. The 60-day notice period currently set forth in the 840 should remain to allow taxpayers to review their current business practices, collect and prepare records for the audit and to obtain competent representation to advise them on how to handle the audit. The Department’s auditors should not be given permission to disrupt a taxpayer’s business any more than they already have during the 60-day period.
The Department tries to justify its proposal as merely a chance to interact with the Taxpayer, confirm that it received the 840 and to answer the Taxpayer’s questions. Don’t be fooled, what the Department is really attempting to do, in addition to getting an unrepresented taxpayer to admit to problems that might not exist, is to extend the amount of time that the Department is allowed to audit your business. Remember the Department has a 1-year tolling period to complete its audit pursuant to s. 213.345, Fla. Stat. This concept will allow the Department’s auditor to get a 2-month jump start on the audit, at a most critical time when the Taxpayer is the most vulnerable. Why should the Department’s auditors be given an extra 60 days to audit your business? This concept is requests legislative approval to do just that, while trampling on your right to representation. DOR’s first concept, “Pre-Audit Preparation Period”, is BAD for Florida Businesses.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 150 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 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.
AUTHORITY
213.345 – Tolling of periods during an audit
213.015 – Taxpayer rights
2022 Florida Department of Revenue Legislative Package
ADDITIONAL RESOURCES
FLORIDA SALES TAX AUDIT HELP, published August 24, 2020, by James Sutton, CPA, Esq.
GO TO JAIL FOR NOT PAYING FLORIDA SALES TAX?, published November 3, 2013, by James Sutton, CPA, Esq.
FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, CPA, Esq.
IS LABOR SUBJECT TO SALES TAX IN FLORIDA, published October 4, 2021, by Jeanette Moffa, Esq.