In-Depth Review of BAD DOR’s 2022 Legislative Package – Part IV
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 twenty proposed ideas prepared by the Florida Department of Revenue (“DOR”). These ideas are a wish list of how the DOR wants to further mistreat taxpayers. We are posting a series of articles involving a more in-depth review of these proposed ideas and how the ideas may impact you and your business. Senator Joe Gruters, from Senate District 23, is sponsoring this legislation in SB 1382, and Representative Cyndi Stevenson, from House District 17, is the sponsor of the companion bill in the House in HB 1041.
In the DOR’s sixth Legislative concept, they continue to penalize businesses that fail to provide records. The DOR wants to make 50% penalties mandatory for failing to provide any and all records. In the DOR’s description of the issue in this concept, is contrary to how the DOR has been compromising penalty for more than twenty years! The Issue Statement indicates the DOR is required to compromise 25% of the penalty if the department determines that compliance errors were due to reasonable cause and not willful negligence, willful neglect or fraud. The Issue Statement then goes on to claim the DOR has the discretion to compromise the remaining 25% for the same reason. That is NOT how the DOR has been implementing the penalty compromise statute in s. 213.21(3), Fla. Stat. The DOR has been compromising half of the 50% penalties, unless there has been a specific finding of willful negligence, willful neglect, or fraud. The remaining penalties have traditionally been compromised if there is reasonable cause, i.e., first-time audit; reliance upon tax professional; or unknowing taxpayers to name a few. These are some of the criteria and guidelines set forth in DOR’s Rules 12-13.007 and 12-13.0075, FAC. Part of the proposed legislative language clarifies and confirms what the DOR has been doing for more than twenty years, which is not problematic.
The major problem for business owners is with the piling on impact the DOR proposes in this concept. DOR wants to create a presumption of willful negligence, willful neglect, or fraud if a business owner, who is just trying to run his/her business, fails to provide adequate records. In such instances, the DOR wants a mandatory penalty of 50% to be imposed. The question that must be asked is who makes the determination of what is “adequate”? DOR has and will continue to take a simple approach of indicating that the taxpayer failed to provide adequate records. With its newfound statutory power, should this legislation pass, the DOR will then slap a statutorily mandated 50% penalty on every audit of every business.
This concept 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
SB 1382 – Tax Administration
HB 1041 – House Bill
213.21 – Informal Conferences; compromises
Rule 12-13.007 FAC – Grounds for Reasonable Cause for Compromise of Penalties
Rule 12-13.0075 FAC – Guidelines for Determining Amount of Compromise
2022 Florida Department of Revenue Legislative Package
ADDITIONAL RESOURCES
Florida DOR’s 2022 Legislative Package BAD for Florida Businesses, published December 29, 2021
Part 1 – FL DOR’s 2022 Legislative Package, published January 9, 2022
Part 2 - FL DOR’s 2022 Legislative Package, published January ??, 2022
Part 3 - FL DOR’s 2022 Legislative Package, published January ??, 2022
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.