Florida Department of Revenue Controversy

The Department of Revenue routinely audits businesses to find out whether state taxes were collected, reported, and paid correctly.  While you are busy running your business, the attorneys at DOROT & BENSIMON PL will take care of your compliance and controversy issues.  Our attorneys are experienced with bringing Florida companies (or companies doing business in Florida) into compliance with the Florida Department of Revenue.

Florida Department of Revenue Audits

  • The Florida Department of Revenue audits taxpayers to:
    • Enforce Florida tax laws uniformly.
    • Deter tax evasion.
    • Promote voluntary compliance.
    • Educate taxpayers.
  • While most returns are accepted as filed, some returns are audited to verify accuracy and evaluate compliance.  Audits do not always result in the taxpayer owing additional tax, penalty or interest.  The auditor may adjust a credit carryover or correct distribution without assessing additional tax.  The auditor may even determine that a refund is due.
  • The methods for selecting a business or individual to audit vary from tax to tax.  Some examples of sources the Florida Department of Revenue uses to identify a potential audit candidate:
    • Internal Revenue Service information.
    • Information sharing programs with other states and state agencies.
    • Computer-based random selection.
    • Analysis of Florida tax return information.
    • Business publications, periodicals, journals, and directories.
  • When the Florida Department of Revenue notifies you of our intent to audit, it will also tell you what records you will need to provide.  The types of records may include, but are not limited to:
    • General ledgers and journals
    • Cash receipt and disbursement journals
    • Purchase and sales journals
    • Sales tax exemption or resale certificates
    • Florida tax returns
    • Federal tax returns
    • Depreciation schedules
    • Property records
    • Other documentation to verify amounts entered on tax returns
  • Remember that you must keep all your records for at least three years since an audit can extend back that far.  The Florida Department of Revenue may audit for periods longer than three years if you did not file, or filed a substantially incorrect return or payment.
  • The Florida Taxpayer’s Bill of Rights provides protection for taxpayers’ privacy and property during their interactions with Revenue employees.  Your rights include:
    • The right to fair treatment.
    • The right to get available information and prompt, accurate responses to your questions.
    • The right to have the Department begin and complete its audit in a timely manner after we notify you of our intent to audit.
    • The right to get simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
  • Throughout the audit process, communication is vital.  After the Florida Department of Revenue sends you a Notice of Intent to Audit Books and Records, the auditor will work with you to set a date to begin the audit.  The auditor will give you deadlines for providing information or documentation.  If you fail to respond or provide the requested information, the Florida Department of Revenue may issue an assessment and file a warrant based on the best available information.

Florida Property Tax Information

  • Property Tax Base – County property appraisers establish a property’s just, or market, value on January 1 of each year. Then they subtract all valid exemptions and classifications to determine the property’s taxable value. The taxable value of all property in a county makes up the property tax base.
  • Property Tax Rates – Florida has more than 640 local governments, known as taxing authorities, that levy a property tax. These include cities, counties, school boards, and special districts such as water management districts. Each year, local taxing authorities set a millage, or tax rate, that is levied on the property’s taxable value. The millage rate multiplied by the taxable value is the tax levied on each property.
  • Annual Notice – In August, the property appraiser sends each property owner a Notice of Proposed Property Taxes, or “TRIM” notice. This notice contains the property’s value on January 1, including any exemptions. It provides the millage rates proposed by each taxing authority and an estimated amount of taxes owed based on those millage rates.
  • Appeals Process – Each county has a five-member value adjustment board, which hears and rules on challenges to a property’s assessment, classification, or exemptions. The value adjustment board is a quasi-judicial body that is independent from the property appraiser and tax collector.
  • Billing and Payment – County tax collectors send annual tax bills to property owners in late October or early November. Full payment is due by the following March 31. Discounts up to 4% are given for early payments.
  • Collections and Refunds – If a property tax bill is not paid by March 31, the tax collector may sell a tax certificate on that property to collect the taxes that were not paid. A tax deed on the property may be sold if the property owner has not paid all back taxes, interest, and fees within two years. Tax collectors also process requests for property tax refunds.
  • Funding of Public Educations and Local Services – Property taxes are distributed by the tax collector to the local taxing authorities. Property taxes in Florida make up roughly 50% of public education funding and 30% of local government revenues.
  • The Role of the Department of Revenue in Property Taxes – The Department of Revenue has general supervision of the assessment and valuation of property so that all property will be placed on the tax rolls at just value. The Department also has supervision over tax collection and all other aspects of the administration of taxes. The supervision of the Department consists primarily of aiding and assisting county officers in the assessing and collection functions. The Department provides education, training, technical assistance and consultation to upgrade assessment skills of both state and local assessment personnel.

Florida Property Tax Appeal

  • As a property owner, you have the right to appeal:
    • The property appraiser’s assessment of your property’s value
    • A denial of your application for an exemption such as homestead, veterans, or senior citizen.
    • A denial of your application for property classification such as agricultural or historic.
    • A denial of your application for tax deferral.
  • You may do any or all of the following:
    • Ask for an informal conference with your county property appraiser.
    • File a petition with your local value adjustment board (VAB).
    • File a lawsuit in circuit court.
  • Informal Conference with your Property Appraiser.  You have the right to an informal conference with your property appraiser to discuss your value or application for a property exemption or classification. By having an informal conference, you may be able to settle the issue without going to a hearing or going to court. At this informal conference, you may:
    • Bring any documentation you have that may support a change in your assessment or eligibility for an exemption or property classification.
    • Ask the property appraiser to present facts that support his or her assessment of your property or the denial of an application for an exemption or classification.
    • Having an informal conference with the property appraiser does not extend your deadline to file a petition with the value adjustment board.
  • Petition the Value Adjustment Board.  If you petition the VAB, you must still pay all your non ad valorem assessments and the required portion of your ad valorem taxes before they become delinquent, usually on April 1.
  • Lawsuit in Court.  You may file a lawsuit in circuit court to challenge the property appraiser’s assessment or denial of an exemption or classification. You are not required to participate in an informal conference with the property appraiser or file a petition with the value adjustment board before filing a lawsuit. Even if you do meet with the property appraiser or file a petition with the value adjustment board, you can still file a lawsuit. You must file within 60 days of the date of a VAB decision or the property appraiser’s certification of the tax roll, whichever is later.