Florida Motor Fuel Tax Audits On The Rise

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Over the past few years the Florida Department of Revenue (“FDOR”) has launched several new campaigns. About 2 years ago, the DOR gained the ability to access the data tracking all tobacco and alcohol items sold to retailers. Armed with third party data, the FDOR did several thousands of audits on those that sold tobacco or alcohol items. With the downturn in the economy, times are tough for the State of Florida and they are launching a similar campaign against auto dealers using DMV records. It was also brought to our attention that the DOR is launching a new campaign by training its auditors for motor fuel tax audits as well.

Has the FDOR reached out to your company or your client’s company about a pending Florida Motor Audit? If you or your client already received the Florida Form DR-840 – Notice of Intent to Audit Books and Records, then that means you have the joy of experiencing an audit. Under Florida law, you have 60 days in which the FDOR cannot bother you unless you waive it. We usually recommend that the Taxpayer use this 60 day period to organize their documents and get prepared for the audit. Around the 120 mark, a Florida DOR auditor will push to start the auditor and they are trained to come into your business with a smile and pretend that they are just there to help.

What many do not know is that the auditor will also ask the taxpayer to sign all sorts of documents that the taxpayer does not have to sign. Many of the documents actually waive certain rights such as agreeing to the auditor’s suggested sample periods. Without significant experience in this area, how are you supposed to know to what you can object? Is it realistic for you to manage the audit in house? Is it feasible to make sure the auditor is not getting off track and asking questions that leave you exposed to other types of liability? Most small and medium sized business owners will not have the ability to handle a Florida Fuel Tax Audit.

This article is intended to let taxpayers know that there are firms like ours that are out there to help you. Our firm offers a unique service to Florida taxpayers in that we almost exclusively represent Florida taxpayers against the Florida Department of Revenue. Our firm focuses almost exclusively on Florida tax controversy, and I heavily focus on other Florida taxes, such as Florida Fuel taxes. Starting with the receipt of your Form DR-840 and handle the case all the way through the protest process and litigation, if necessary, our firm is equipped to help you manage a fuel tax audit.

Often, even more appealing, is that we can usually make the FL DOR agent conduct the audit in our offices. This can serve as an important tool as it eliminates the possibility of an employee misspeaking to an auditor. Others just prefer not to have the pressure of an auditor at their location. From our offices and armed with our former DOR auditors, we manage each stage of the audit and stay heavily involved to ensure the auditor stays on track.

Original Post By:  Jerry Donnini

Mr. Donnini is a multi-state sales and use tax attorney and an associate in the law firm Moffa, Gainor, & Sutton, PA , based in Fort Lauderdale, Florida. Mr. Donnini’s primary practice is multi-state sales and use tax as well as state corporate income tax controversy. Mr. Donnini also practices in the areas of federal tax controversy, federal estate planning, Florida probate, and all other state taxes including communication service tax, cigarette & tobacco tax, motor fuel tax, and Native American taxation. Mr. Donnini is currently pursuing his LL.M. in Taxation at NYU.

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