Have you ever felt as if the Florida Department of Revenue has targeted your business or your industry? If you ever have felt this way, you are far from being alone. Countless companies doing business in Florida have felt and do feel the same way. It is something I hear frequently. One popular reason for owners to feel this way is since the company did not collect the sales tax, the Florida Department of Revenue should not come after the company. It is not fair or right. After all, the payment of the assessment would be coming from the business’s bottom line for sales tax that has not been collected. However, what if I said there was an actual internal meeting at the Florida Department of Revenue to discuss taxing various taxpayers? Read on to learn more about this secret meeting about the targeting of taxpayers by the Florida Department of Revenue.
In life, there are two things that are certain – death and taxes. The Florida Department of Revenue helps with only one of these two certainties. While the assessment of taxes by the Florida Department of Revenue can many times be the death of a business, the Florida Department of Revenue believes such assessments to be the fair administration of the tax laws of Florida. Afterall and from the Florida Department of Revenue’s standpoint, if the Florida Department of Revenue is assessing large sums of money against everyone, how is that action not fair? The Florida Department of Revenue is treating everyone the same in that scenario. The question comes into play of when “fair” becomes blatant targeting.
Our firm understands the Florida Department of Revenue will target certain industries for audits due to varying reasons. This knowledge may be common knowledge. Usually, the targeting is done via certain “objective” parameters, such as the company’s North American Industry Classification System which is also known as the NAICS code. This six-digit code is provided to the Florida Department of Revenue when a business registers for tax purposes with the Florida Department of Revenue. Sometimes, and for those businesses not registered, the Florida Department of Revenue might have the NAICS code through another means. There are other “objective” parameters used by the Florida Department of Revenue to pursue certain industries. The details of such methodologies is the subject of another article.
Recently, I was involved in litigating some cases against the Florida Department of Revenue, which the state was fighting tooth and nail on for some reason. At one point in process, I had the opportunity to depose the tax conferee. I genuinely do enjoy the chance to depose Florida Department of Revenue employees. A “tax conferee” is an individual in the Informal Dispute Resolution (“IDR”) unit (formerly known as Technical Assistance and Dispute Resolution). IDR will handle an “appeal” of a tax assessment as well as a second “appeal”, should such a second appeal be requested. If one disagrees with the result of the appeal or second appeal, you still have further rights to fight the assessment, including litigation. That is how we got to the point of litigating the case and deposing the tax conferee.
During the deposition of this particular tax conferee, the truth was revealed, although this person did the best job possible at trying to cover it up. The tax conferee casually mentioned a meeting that occurred before the appeal decision was rendered. Specifically, the Florida Department of Revenue had a large internal meeting about multiple taxpayers. The large internal meeting had auditors, various individuals from IDR, and persons from another area of the Florida Department of Revenue present to discuss the issues. The goal of this large and organized internal Florida Department of Revenue meeting seems fairly straightforward from this tax conferee’s sworn testimony – the apparent specific targeting of taxpayers of a particular industry and an agreement to tax these particular taxpayers.
Let that sink in for a moment. The Florida Department of Revenue is meeting internally to discuss across multiple areas within the Florida Department of Revenue about the assessment and taxing of certain taxpayers along with proceeding forward. There is no doubt in my mind this was in part a strategy meeting held by the Florida Department of Revenue to develop what they believed was the best arguments to support these otherwise baseless assessments. This meeting was not a meeting called for by the taxpayer, as it was not even known to us until litigation that such a meeting occurred. If that is not specific targeting of taxpayers, then I do not know what is. If this is just what we know about in terms of secret internal meetings at the Florida Department of Revenue, imagine how many more secret meetings there might be in which it could be discussed about the targeting of taxpayers.
When attempting to get information about this secret meeting such as who attended, notes from the meeting, and the like, the Florida Department of Revenue’s response was simple – no. They refused to provide the information. While the Florida Department of Revenue’s official position appears to be the information was irrelevant, one can only speculate as to the true reason why. Perhaps the information would be embarrassing for the details to come to light. Perhaps the information might cause someone to get fired. In any respect, the Florida Department of Revenue has fought very hard to keep the details of this secret internal meeting as secret as possible. If there was nothing to hide, why would they fight so hard?
In any respect and at this time, the Florida Department of Revenue appears to be very concerned about this information coming out. We must hold the Florida Department of Revenue accountable for secret meetings taking place for the specific targeting of companies doing business in Florida. Businesses deserve better. One should not have a seven-figure assessment in litigation only to learn the business was the subject of an internal meeting that potentially targeted that business. There should be more transparency in government to require all meetings of two or more employees Florida Department of Revenue employees discussing a taxpayer to make a record of such meeting to ensure a level playing field. Without as much, the Florida Department of Revenue will continue to operate in the shadows and exploit the unwary for as long as the Florida Department of Revenue can do so.
If more information becomes available on this subject at a later date, I will look to post another article about the subject. It is important for Florida businesses to know what they are up against, especially when the Florida Department of Revenue continues to stack the deck against hardworking business owners.
In conclusion, it seems as though there may be secret meetings taking place within the Florida Department of Revenue in which the Florida Department of Revenue discusses the purposeful targeting of Florida businesses. If you get or have already received a Florida audit notice or assessment, keep one thing in mind. The Florida Department of Revenue could be targeting you or your industry. Your business should not be responsible for filling the state coffers with unnecessary amounts. You pay your taxes that you owe and nothing more. It is the “nothing more” part the Florida Department of Revenue consistently challenges.
About the author: David Brennan is partner with Moffa, Sutton, & Donnini, P.A. His primary practice area is multistate tax controversy. David received a B.S. in Accounting and Finance, with a minor in Computer Science, from Florida State University. He worked as an accountant for a CPA firm before attending law school at Regent University. He received his Juris Doctor in 2013 and was licensed to practice law in Florida in the same year. In 2015, David earned his Masters of Laws in Taxation from Boston University. While working for the Florida Department of Revenue as a Senior Attorney, David focused on various sales and use tax issues. You can read his BIO 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. Contact us for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
AUTHORITY
Section 213.015, F.S. – Taxpayer Bill of Rights
ADDITIONAL RESOURCES
FLORIDA SALES TAX - A CASE STUDY OF AGGRESSIVE SALES TAX AUDITS, published October 9, 2023, by David J. Brennan, Jr., Esq.
2023 FLORIDA SALES TAX UPDATE PART II, published August 14, 2023, by David J. Brennan, Jr., Esq.
FLORIDA SALES TAX AUDITS PROCESS AND TRAPS, published March 4, 2023, by David J. Brennan, Jr., Esq.
PHONE CALL FROM FLORIDA DEPARTMENT OF REVENUE: SALES TAX, published October 15, 2022, by Jeanette Moffa, Esq.
FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, C.P.A., Esq.
FLORIDA SALES TAX - VOLUNTARY DISCLOSURE PROGRAM, published April 9, 2018, by Jeanette Moffa, Esq.