On July 31, 2012, Munaf M. Rashid was arrested by the Lee County's Sheriff's Department on a 3rd degree felony charge related to a mere $8,000 of collected but unremitted Florida sales tax, according to a report on the Florida Department of Revenue's web site. Mr Rashid is the owner of a convenience stored named Snack Shack Food Mart located at 8671 Littleton Road in North Fort Myers. According to investigators, Mr. Rashid collected sales tax from customers at his store but during periods in 2011, he failed to remit the sales taxes to the state. Mr. Rashid now faces up to 5 years in prison and up to $5,000 in fines as well as potential repayment of stolen tax, penalties, interest, and investigative costs.
In Florida, business owners that sell, repair, rent, or provide services that are subject to Florida Sales and Use Tax are forced to be sales tax collection agents for the state of Florida. Sales taxes must be separately stated on the customers invoice and, by law, is property of the state the moment it is collected from the customer. So even though virtually all business owners put sales tax collections in the general checking account of the business, those funds are supposed to remain in the business account until they are timely remitted to the state.
If you or someone you know has collected but not remitted sales taxes, then you truly need to take the matter very, very seriously. It surprises most business owners to know that the Florida Department of Revenue is dramatically more likely to arrest a business owner for tax fraud than the Internal Revenue Service ("IRS"). While both the IRS and the Florida Department of Revenue will put tax liens on the business property (called a "Tax Warrant" in Florida), the Florida Department of Revenue will also put the business owner in jail if the taxes and all associated penalties, interest, fines, and costs are not remitted.
If you or someone you know is in this situation, then please contact an attorney to discuss your situation and potential options. There are ways to negotiate with the state or the assistant attorney's office to potentially enter a payment plan and avoid being formally charged with felony. However, you should not negotiate with the state yourself. Anything you say can be used against you at a criminal trial. You need an experienced attorney to negotiate for you. At the Law Office of the Law Offices of Moffa, Sutton, & Donnini, P.A., our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended clients against criminal charges related to Florida sales and use taxes for more than 20 years. In fact, the only criminal cases we handle are related to Florida sales and use taxes. Our partners are both CPAs 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.
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. 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, Accounting for Lawyers, and Federal Income Tax I. You can read more about Mr. Sutton in his firm bio.
ADDITIONAL RESOURCES
FL TAX ALERT - ALCOHOL & TOBACCO RETAILERS BEWARE!, February 10, 2012, by James Sutton, CPA, Esq.
FL TAX ALERT - CONVENIENCE STORE OWNERS TARGETED!, August 16, 2012, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.
FL DOR'S GREATEST WEAPON - REVOCATION OF A DEALER'S SALES TAX CERTIFICATE, August 6, 2012, by Jerry Donnini, Esq.
CRIPPLING PENALTIES UNDER FLORIDA SALES AND USE TAX LAW, July 19, 2012, by James Sutton, CPA, Esq.
FLORIDA TAXPAYER BILL OF RIGHTS, July 8, 2012, by James Sutton, CPA, Esq.
WHAT SERVICES ARE SUBJECT TO SALES TAX IN FLORIDA?, May 1, 2012, by James Sutton, CPA, Esq.
FL SALES TAX - GAS STATION INDUSTRY - PART I, March 23, 2012, by Jerry Donnini
GAS STATION INDUSTRY - SALES AND USE TAX ISSUES AND OPPORTUNITIES - PART II, April 12, 2012, by Jerry Donnini, Esq.