Have you received a phone call from the Florida Department of Revenue about a sales and use tax audit or reemployment tax audit? From the start - you should know that it is standard practice for the Florida Department of Revenue to call a business before sending out a tax audit notice. So, while people are being targeted with an exponentially increasing number of scam phone calls these days, you should take a call from someone purporting to be from the Florida Department of Revenue seriously. That being said, you should still keep your guard up for scams even from the Florida Department of Revenue. Here's how....
You received a call from the Florida Department of Revenue - Is it Real?
The easiest way to make sure a phone call really is from the Florida Department of Revenue employee is to evaluate the basics: Who, What, When, Where, and Why.
Who: If a Florida Department of Revenue employee is calling you, they usually will have no problem identifying themselves. Keep in mind that employees from taxing authorities in other states, such as Illinois, will not always give out their last name for safety reasons. However, Florida has broad public record “sunshine” laws that require most state employees to provide their name. Occasionally you will run into a Florida Department of Revenue employee that is too worried about someone targeting them to give out their full name over the phone. They are supposed to give their name, but they don't always. I also suggest you ask for their job title, just to make sure they are not a criminal investigator (yes, sales tax can turn criminal).
When you first answer the call and are told you are being contacted by the Florida Department of Revenue, ask for the first and last name of the person on the line. After confirming spelling, search “By Employee” on the left-hand side of the https://www.myflorida.com/411 website and type in the employee’s name. You do not need to fill out the “Entity” line in the search.
After pressing “Search,” the screen will show the name, organization, phone number, email address, and city of all state employees with that name. If nothing comes up on your search from the Department of Revenue, then it is possible that you are not speaking with a Department of Revenue employee. The search engine on this website is very, very specific. So, if they told you their name is Jon Smith, but their real name is Robert Jonathan Smith, then you search will not work. In other words, this is not a full proof method of identifying scammers, but you can find most employees of the Department of Revenue this way. Also, in an extreme case, you could have a scammer using a real Florida Department of Revenue employee's name.
What: If you’ve received a call from someone claiming to work at the Florida Department of Revenue, consider what it is they are asking. The purpose of a legitimate call from the Florida Department of Revenue is to confirm the business is still open, what type of industry your business is in, and the proper contact information for your business (mail, phone, email). If the Department of Revenue is calling about your business, but then asks for personal information, it is a red flag. For example, no employee of the Department of Revenue is going to ask for your social security number over the phone. But they might ask for the federal tax ID number of your business, which is usually already public information on the Florida Department of State's website. Consider the nature of the call and if it is within the scope of the Department of Revenue’s purpose. If something they are asking for seems suspicious, you can ask for mail communications instead so that it can be investigated later.
When: Like other government agencies, the Department of Revenue operates during normal business hours, Monday through Friday. If you receive a call before 8am or after 5pm or on the weekend, it is at least a red flag. That being, since the pandemic, some Florida Department of Revenue employees are working from home and working some odd hours (presuming they are actually working). I have received emails at 5:00 AM from some Revenue agents in the last year. Shocking!
Where: Where are you receiving the call? If you are at home answering from your cell or house phone number, but the Department is calling for a business which has a separate physical location and its own phone number, that is a red flag. If you normally give out your personal cell number for business purposes, then it might be legitimate. If the Department is calling regarding a business you are associated with, but you are not an owner or officer of the company, then it might be a scam call. For example, the Department of Revenue would not contact a waiter who works at a restaurant regarding the restaurant’s business taxes. If you are not an officer of registered agent for the company, the Department should not be contacting you at home or on your personal phone.
Why: You also want to consider why they are calling you in that moment. Did you miss a deadline for a sale tax return or reemployment tax return? Then you probably know why they are calling even before they call. You can expect them to be pushy about getting that return and the money. But if the caller says they are doing an audit and they are putting pressure on you to give them something in that exact moment, be cautious. A legitimate call always says you will be receiving an audit notice in the mail shortly. Some auditors will even offer to email you the audit notice, but it will always be through a "secured email" that many people have trouble opening.
Phone calls with Florida Department of Revenue: Sales Tax Advice
While the Department’s most common mode of communication is US mail, the initiation of a sales tax (or reemployment tax) audit almost always starts with a phone call. Because a phone call is less formal and requires an immediate response, it is important for taxpayers to be cautious when speaking over the phone with the Department of Revenue. Taxpayers may erroneously believe the phone call is “off the record,” as it is verbal. However, any information you provide to the Department may be documented on their end. Furthermore, you will not see where it’s documented and so you are not able to clarify your words or make certain your intended meaning was captured.
Not only will the Department potentially be documenting your “informal” phone call, but that will likely end up being the only proof on the matter (if it even exists). Quite often, I hear clients tell me that the Department of Revenue gave them certain advice or instructions over the phone. However, they do not have the name of the person who gave the advice or instructions and they also do not have any proof. In many cases, taxpayer rely on this type of sales tax advice for years and apply it on millions of dollars of transactions. Many years later, they will say “The Department told me to do it this way on the phone.” I know in these cases we will have a challenge ahead of us, as it is extremely rare for the taxpayer to have documented the call or even have the name of the person who provided the erroneous advice. However, even if we did have that, the Department is not bound by advice given over the phone.
The bottom line is that what you tell a Department of Revenue employee over the phone may be documented and used against you. Meanwhile, what they tell you has no bearing on what they may or may not do in the future. If this seems unfair, it’s because it is! In order to give yourself time to carefully respond (perhaps after consulting with an attorney), you may want to request email communications. Doing so not only gives you a chance to consider the information you provide, and all its consequences, but also to document the conversation for your own purposes down the line.
Conclusion
If you get a phone call from the Florida Department of Revenue, take it seriously. Don't presume it is a scam an ignore it as the consequences as can be very costly. However, you also don't want to bare your soul to a scam artist. Therefore, taxpayers should proceed extremely cautiously when answering such a call. Asking who, what, when, where, and why, can help reveal the identity of the caller and confirm their relationship to the Department of Revenue. But even when the caller’s identification is confirmed as an employee of the Department of Revenue, taxpayers should still be wary of phone calls with Department of Revenue employees regarding sales and use tax as it pertains to their business. Many taxpayers presume the call is a scam until they get the audit notice in the mail, giving up that additional time to prepare for the audit. If you received a call from the Florida Department of Revenue and have questions, then you are welcome to take advantage of our free initial consultation.
Jeanette Moffa is an attorney in the Fort Lauderdale office of Moffa, Sutton, & Donnini, P.A. She focuses her practice in Florida state and local tax, with an emphasis on sales and use tax. Jeanette provides SALT planning and consulting as part of her practice, addressing issues such as nexus and taxability, including exemptions, inclusions, and exclusions of transactions from the tax base. In addition, she handles tax controversy, working with state and local agencies in resolution of assessment and refund cases. You can learn more about Jeanette HERE.
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 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 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
Is Labor Subject to Sales Tax in Florida? by Jeanette Moffa, Esq., published October 4, 2021
Letter from Florida Department of Revenue: Sales Tax, by Jeanette Moffa, Esq., published October 15, 2022
2022 Florida Sales Tax Rate on Commercial Rent, by James Sutton, CPA, Esq., published December 8, 2021
FL Governor Signs Economic Nexus Legislation, by James Sutton, CPA, Esq., published April 20, 2021
A Taxing Decision: When Tax Overpaid Cannot Be Refunded, by James F. McAuley, Esq., published March 29, 2022
Florida Sales Tax – Voluntary Disclosure Program, by Jeanette Moffa, Esq., published April 9, 2018