FL DOR USES "CALLZILLA" TO HARRASS TAXPAYERS
Just when you thought it was safe to turn your phone back on after you successfully got your home number on the federal and state "do not call" list and all the robo-calls from politicians have ceased, one more organization has begun using pre-recorded voice messages to harass the citizens and businesses of Florida. This time it is our draconian comrades in Tallahassee aka the Florida Department of Revenue. The FL DOR now uses an automated calling system to call taxpayers when the DOR thinks taxpayers are delinquent on tax returns, late on payments, haven't filed some obscure form, or checked the right box on an online tax application. And the prerecorded messages are not the helpful, respectful, nice messages that you might expect from our business partners in Tallahassee. Instead, the messages a filled with threats of tax warrants, frozen back accounts, potential personal liability, revocations of tax registrations, and even jail tail. In fact, the whole phone message system is so threatening that even the Florida Department of Revenue's own agency unofficially refers to the system as "CALLZILLA." No joke. And – because the whole thing is automated, you don't have a specific person in the FL DOR to speak to about it. Can you imagine coming home on a Friday evening and turning on your voicemail to hear that your government is about to freeze your bank accounts with way to find out any more information until next week? Do you presume it is some type of prank call?
I can understand the idea that the FL DOR wants to save money on personnel (as if no raises for DOR agents 7 years wasn't already saving enough). But I've been getting calls from are business owners that are getting these completely threatening phone calls when they have done absolutely nothing wrong. Automated calls from Callzilla that can't answer any questions leave a taxpayer just short of a heart attack after the call.
For example, if you form a corporation in Florida and elect to be an s-corporation for federal income tax purposes, then there is no Florida corporate income tax imposed on your company. The FL DOR has a flaw in their system that nobody seems to be able to figure out that keeps presuming these new companies are delinquent on their Florida corporate income taxes, which does not even apply. These business owners are getting threatening letters and automated phone calls. The FICPA state tax section has been complaining about this to the FL DOR for quite some time to no avail.
Another example I've seen is when a business or citizen realizes that they have made a mistake with their Florida taxes and wish to come forward to correct the mistake through Florida's statutorily approved Voluntary Disclosure process. These are taxpayers that simply want to do the right thing and make sure all their taxes are paid in full. This type of activity that should be applauded by the state. What I've experienced is that while the Voluntary Disclosure personnel are amazing (and need big raises), the other departments within the DOR can't seem to cooperate with the process. On occasion, the FL DOR's system mistakenly treats the valid disclosure as delinquent returns and sometimes as if the taxpayer has under paid returns. This triggers a world wind of draconian practices including automated letters and phone calls with a level of threats you would not believe. Fortunately, with the assistance of the Voluntary Disclosure personnel, we are usually able to get the matter resolved pretty quickly.
Personally, I believe the taxpayer deserves a formal apology for the unforgivable treatment by our state government, but I have experienced that supervisors in the "Callzilla" department refuse to even return multiple phone messages for weeks, much less take responsibility for the problem. I would not be surprised if the state ended up facing law suits for imposing extreme emotional distress on some of these business owners based on negligent government practices.
The really scary part is the DOR has other automated systems that have been put into place in the last couple of years. For example, tax warrants (liens) are done at least partially through an automated system and you can find an article below about a tax warrant seemingly issued against the Florida Supreme Court in 2012, which was later deemed to have been issued in error by the former head of the DOR. There is also has an automated system that puts freezes on bank accounts. Can you imagine the harm that could be done when the bank account of a large business is wrongly frozen on the day before payroll happens? Believe it or not, this automated system is designed to freeze the accounts when the most money is likely in the account, e.g. the night before payroll.
Our firm gets several calls a month from companies that are completely shocked to find that their bank account has been frozen when they never received as much as a phone call or letter from our friends in Tallahassee. Before a bank freeze can happen legally, the state is statutorily required to notify the taxpayer that an assessment has been made AND formally notify the taxpayer that a tax warrant (lien) has been filed. Failure to do either of these means the FL DOR does not have the legal authority to freeze a bank account. Unfortunately, the FL DOR's automated system does not always send out valid notices to proper addresses. Our draconian comrades do not always take the time and expense to send certified letters with assessments and warrants to the taxpayers to make sure they the taxpayers receive the legally required information that their rights are about to be severally limited. This all too often results in notices being delivered to the wrong address or even to completely invalid addresses. I'm sure each FL DOR employee is merely following procedures told to them, but the procedures have flaws that seriously need to be updated to protect the rights of taxpayers.
I know of one instance in which the DOR sent a "tax might be due on rent" notice to a taxpayer. It turned out to be the legal street address for a property, but the address was not a valid mailing address with the US postal service. The address was pulled from property tax records and the "mailing address" also listed with the county was ignored. Instead of having a system in place to catch that the taxpayer had not received the legally required notice of the assessment nor the tax warrant, the FL DOR's system moved forward like a bull in a china shop freezing the property owner's bank account. In the end, the agent that initiated the warrant was very helpful in getting the freeze lifted and the matter resolved (no taxes were due). The problem is that the FL DOR should have procedures in place to make sure warrants are NOT issued without a properly noticed assessment and bank freezes do NOT happen without a properly served warrant. Automated systems do not seem to be making this any better, in fact, it is getting worse.
The Florida legislature and governor took the time and effort to put a taxpayer bill of rights in place on top of all the other requirements statutorily imposed on the Florida Department of Revenue. After 6 years of trouble economic times in which our state really struggled for revenue, I believe our trusted government revenue authority as a whole has lost sight of protecting taxpayer rights over the prospect of raising revenue. Know your rights and speak up when they have been violated. If you want to be proactive then speak up to your FL senator or representative about beefing up the FL Taxpayer Bill of Rights to put more teeth into the statutes protecting your rights. Our perhaps the FL DOR will begin reviewing and implementing procedures on their own to protect the rights of their business partners throughout the state. Personally, I hope the FL DOR tackles this issue internally before things continue to get worse.
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. 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
FLORIDA TAXPAYER BILL OF RIGHTS, July 8, 2012, by James Sutton, CPA, Esq.
FL TAX WARRANT ISSUED AGAINST THE FL SUPREME COURT, February 10, 2012, by James Sutton, CPA, Esq.
FL TAX ALERT – 200% PENALTY STINGS BUSINESS OWNER, March 24, 2013, by James Sutton, CPA, Esq. and Jerry Donnini, Esq.
CRIPPLING PENALTIES UNDER FLORIDA SALES AND USE TAX LAW, July 19, 2012, by James Sutton, CPA, Esq.
© 2013 James Sutton, all rights reserved.