On April 8, 2013, [name omitted], owner of Palm Trading Group, LLC was arrested by the Seminole County Sheriff's Office on felony charges concerning theft of over $49,000 of sales tax (collecting sales tax from customers but not remitting the tax to the state). The Ocala resident faces up to 15 years in prison and up to $10,000 in fines in addition to repayment of stolen taxes, interest, penalties, and investigation expenses. According to investigators, [name omitted] collected sales tax from customers at the dealership but during periods of 2009 through 2012 but he failed to remit the sales taxes to the state.
What the used car dealer likely did not know is that the state has recently started downloading the entire DMV database. Now the state can compare all used car dealers DMVS sales per month to the used car dealer's sales tax returns. If there is a discrepancy, then the dealer is queued up for either an audit or a criminal investigation, then choice dependent solely on the available resources in the criminal division at the time. There is a link to a more in depth article on this topic at the bottom of this page.
Once a sales tax fraud matter leaves the hands of a Department of Revenue investigator and a local state attorney's office gets involved, the danger level for the taxpayer goes up exponentially. An arrest warrant will be issued shortly followed by a night in jail, a bail hearing, and, if you can afford to eventually pay the tax, a plea deal with monthly payments and some extended period of probation is likely. If you can't pay or refuse to pay the tax, then jail time is very likely. One of the other consequences that you might not consider is that the taxpayer's arrest photo is very likely to appear in one of the "mug shot photo" websites that will prominently appear in Google/Bing/Yahoo search engine results when anyone searches for the taxpayer's name. This can be extremely damaging to a business owner's reputation. In other words - if you are under investigation by the Florida Department of Revenue, then it is extremely important to handle this matter with a competent professional BEFORE the matter gets forwarded to the state's attorney's office.
Florida law requires business owners that sell, repair, rent, or provide services to act as an agent to the state and they must remit all sales tax collected to state of Florida. Further, Florida sales tax is required to be separately stated on the customers invoice. More importantly, Florida law mandates that the taxes collected is property of the state the moment it is collected from the customer. Therefore, despite putting these amounts in their own checking accounts, business owners must segregate sales tax collect and remit it to the state in a timely fashion. Business owners that sell tangible personal property must also timely file sales tax returns.
Sales tax collected but not remitted is a crime under Florida law and must be taken extremely 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 has collected but not remitted Florida sales tax, then please contact an attorney experienced in Florida sales and use tax criminal defense for a confidential conversation to discuss his or her options. There are mechanisms in place that allow individuals or their attorney to negotiate with the state to enter into a payment plan. While the monetary sanctions can be harsh, it is better than losing one's freedom. Like any other crime, anything said by you is an admission and can be used against you at a criminal trial. Therefore, it is wise to have an attorney speak on your behalf.
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 IS IN CHARGE OF THE TAMPA OFFICE FOR THE FIRM AND HIS PRIMARY PRACTICE IS FLORIDA SALES AND USE TAX CONTROVERSY & CRIMINAL DEFENSE. MR. SUTTON WORKED FOR THE STATE AND LOCAL TAX DEPARTMENT OF A BIG FIVE ACCOUNTING FIRM 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 - USED CAR DEALERS TARGETED!!!, January 19, 2013, by James Sutton, CPA, Esq.
FL TAX ALERT – CONVENIENCE STORE OWNERS TARGETED!, August 16, 2012, by James Sutton, CPA, Esq., and Jerry Donnini, Esq.
TAMPA JEWELRY STORE MANAGER ARRESTED FOR SALES TAX THEFT, August 30, 2012, by James Sutton, CPA, Esq.
MIAMI AUTO REPAIR SHOP OWNER ARRESTED FOR SALES TAX, August 25, 2012, by Jerry Donnini, Esq.
FT. MYERS BUINESS OWNER ARRESTED FOR FAILING TO REMIT ONLY $8,000 IN SALES TAX COLLECTED, August 11, 2012, by James Sutton, CPA, Esq.
FL DOR'S GREATEST WEAPON – REVOCATION OF 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.
WHAT SERVICES ARE SUBJECT TO SALES TAX IN FLORIDA, May 1, 2012, by James Sutton, CPA, Esq.
© 2013 All rights reserved - James H Sutton Jr