Florida Sales Tax Enforcement Actions Checklist
Florida sales tax enforcement actions occur when the Department of Revenue (DOR)
identifies or suspects that a business has not collected, reported, or paid sales tax correctly. These actions can range from routine audits and requests for documentation to formal enforcement notices, assessments, and, in severe cases, referrals to the
Criminal Investigations Division. Sales tax enforcement matters because Florida relies on this revenue for state operations, and the Florida DOR has specific procedures for investigating and collecting unpaid tax under Florida law.
Ignoring enforcement communications can result in mounting tax penalties, interest, and potential legal action. Understanding what enforcement action means and what typically happens next helps clarify your obligations and options throughout the process, whether you are dealing with routine compliance matters or more serious criminal sales tax investigations.
What This Issue Means
A sales tax enforcement action represents the state's formal or informal effort to investigate, assess, or collect unpaid Florida sales tax, penalties, or interest from a business. This can include examination notices, audit requests, deficiency notices, or collection letters related to Sales and Use Tax obligations. The action indicates that
Florida DOR records show a discrepancy between what was reported (or not reported)
and what the state believes is owed.
Enforcement actions exist at different stages: some are routine information requests, while others indicate the state has already determined an amount is due. Each type of
notice includes specific instructions, deadlines, and contact information for the assigned
Department of Revenue representative handling your case.
Why the State Issues Florida Sales Tax Enforcement
Actions
The DOR issues sales tax enforcement actions when it detects potential compliance issues with Florida Sales and Use Tax obligations. Common triggers include failure to file returns, underreporting of sales tax, inconsistencies between reported sales and industry benchmarks calculated using Florida sales tax calculator data, or accounts flagged during routine audits. The state also initiates enforcement when third-party information (such as credit card processor reports) indicates that sales were not reported.
The Florida Department of Revenue documents standard audit procedures and common triggers in official publications. While the DOR does not publish a complete algorithm for audit selection (as no tax agency does), the general criteria and procedures are publicly available. According to state guidance, enforcement actions are issued to ensure tax compliance and collect amounts the state determines are owed under Florida Statute 212.12 and related provisions of Florida sales and use tax law.
What Happens If This Is Ignored
If a Florida sales tax enforcement action is ignored, the state typically sends follow-up notices and may escalate collection efforts. The Florida DOR can issue a formal assessment if an examination is completed without response or cooperation. Unpaid amounts accrue interest and tax penalties, which increase over time at the Sales Tax
Rate for interest published in Tax Information Publications and updated twice yearly on
January 1 and July 1.
If a debt remains unpaid for 90 days, the Department of Revenue charges a 10% administrative collection processing fee. In cases of continued non-compliance involving significant amounts or patterns suggesting intentional evasion, the state may refer matters to the Criminal Investigations Unit for review. Criminal charges are reserved for cases involving fraud, willful evasion, or knowingly filing false returns, but civil collection through liens, levies, or other enforcement mechanisms is more common.
What This Does NOT Mean
Receiving an enforcement action does not automatically mean the state has proven a tax liability or initiated a criminal investigation. An audit notice or information request is part of the examination process, not a final determination. The action does not mean criminal charges are certain or imminent. However, criminal referral is possible in cases of intentional fraud involving false Florida sales tax returns or willful tax evasion prosecuted under Florida law.
An enforcement notice also does not mean the Florida DOR has frozen accounts or seized assets. Those actions occur at later stages of collection and are typically preceded by formal notice and unsuccessful collection efforts after the assessment becomes final.
Checklist: What to Do After Receiving This or Identifying
This Issue
Follow these steps if you receive a Florida sales tax enforcement action or notice from the Department of Revenue.
Step 1: Read the Notice Carefully
Identify the type of notice (audit, examination, deficiency, assessment, or collection letter related to Sales and Use Tax). Note the specific period being examined or the amount claimed under Florida Statute 212.12. Locate the deadline for response or action, which is typically stated prominently in the notice.
Identify the name and contact information of the assigned Florida DOR representative.
This information appears in most enforcement communications and provides a direct point of contact for questions or clarification regarding the Florida sales tax matter.
Step 2: Gather Documentation
Locate sales tax returns filed for the period in question using records from your Florida
Business Tax Application registration. Compile records of gross sales, taxable sales, and exempt sales from your point-of-sale systems and accounting records. Collect invoices, sales journals, and cash register tapes that support your reported amounts on your tax return submissions.
Organize exemption certificates for tax-exempt sales claimed on your returns. Gather documentation of any tax paid to other states, if applicable, to use for tax obligations.
Compile records of any adjustments or credits claimed during the examination period.
Step 3: Review Your Sales Tax Account
Verify that your business is registered with the correct classification and filing frequency under your Florida Business Tax Application. Check that all required returns were filed during the examination period. Confirm payments and credits are reflected accurately in
the Department of Revenue records by reviewing your account through the Florida DOR eServices portal.
Note any discrepancies between your records and the state's information. These discrepancies may explain why the enforcement action was initiated and can be addressed in your response to the tax controversy.
Step 4: Respond to the Notice Within the Deadline
If the notice requests information or documents, provide copies (not originals unless instructed). If the notice allows a written explanation, provide factual information about the period in question. Meet the response deadline stated in the notice to preserve your rights under Florida law and prevent automatic assessment.
Keep copies of everything sent to the Florida DOR. Document the date and method of submission; certified mail with return receipt is recommended for essential submissions.
Retain proof of mailing or electronic confirmation for your records.
Step 5: Request Clarification if the Notice Is Unclear
Contact the assigned Department of Revenue representative if the notice is ambiguous or if you need guidance about what is being examined. Request specific clarification on documentation requirements or the examination scope under Florida sales and use tax law. Request additional time if you need it to gather documents; extensions are not automatic but are often granted when requested before the deadline.
Document the date and substance of any conversations with Florida DOR staff. Written confirmation of verbal agreements or clarifications is advisable to prevent misunderstandings during the tax controversy resolution process.
Step 6: Do Not Agree to or Dispute Claims Without Documentation
Do not admit or deny liability without reviewing your records first. Do not pay an assessment unless you understand the calculation and believe it is correct based on your documentation. Do not ignore follow-up notices or requests for additional information, as this can result in default assessment and escalated collection action.
Request time to review the findings if an assessment is issued. The state typically provides a reasonable period for review before the assessment becomes final under
Florida law.
Step 7: Understand Formal Representation Requirements
If you wish to authorize someone to represent you before the Florida Department of
Revenue, you must complete Form DR-835 (Power of Attorney and Declaration of
Representative). This form authorizes your representative to receive confidential tax information and discuss your case with Florida DOR auditors. The form is available on the Department of Revenue website and must be filed before the representative can act on your behalf.
While representation is not required, many businesses engage tax professionals for complex examinations, tax controversy matters, or assessments. The state processes responses regardless of who submits them, provided proper authorization is on file for representatives.
Step 8: Keep Records of All Communications
Save copies of the original notice and any follow-up correspondence. Document dates of phone calls, emails, and in-person meetings with Florida DOR staff. Note the names and titles of Department of Revenue representatives you speak with.
Maintain a timeline of actions taken and responses sent. This documentation is essential if disputes arise or if you need to demonstrate compliance with deadlines and procedures under Florida sales and use tax law.
Step 9: Evaluate Payment Options if Assessment Is Issued
If the Florida DOR issues an assessment, review the calculation carefully and determine whether to accept or dispute it. If you cannot pay for an evaluation immediately, contact the Department of Revenue to inquire about a payment plan. The state offers stipulated payment agreements in appropriate circumstances, though interest continues accruing on unpaid balances at the current rate.
A payment plan typically requires a minimum down payment and full payment within a specified timeframe. The terms depend on the amount owed and your financial circumstances. Entering a payment plan prevents additional collection actions, such as liens or levies, as long as you remain compliant with the payment schedule.
- State enforcement notices and responses
- Sales tax audits, assessments, and collections
- Payroll & trust fund tax enforcement issues
- Penalty and interest reduction options
- Payment plans and state tax relief eligibility
- Representation before state tax agencies
Step 10: Understand Appeal Rights and Procedures
If you disagree with an assessment, you have formal appeal rights with specific deadlines outlined in the notice. The Florida sales tax appeal process typically begins with an administrative protest filed within 60 days of the assessment becoming final.
This deadline is jurisdictional and must be met to preserve your right to challenge in the evaluation.
The appeal may involve an informal conference with the Department of Revenue or a formal administrative hearing. Understanding these procedures early helps you prepare an effective response to the tax controversy.
Understanding the Statute of Limitations for Florida Sales
Tax Enforcement Actions
Florida's statute of limitations for sales tax assessments is three years from the later of the due date, return due date, or filing date. This is the standard period during which the
Department of Revenue can assess additional tax under Florida Statute 212.12. The period extends indefinitely if no tax return was filed, if a substantially incorrect return was filed, or if a fraudulent return was filed.
There is no six-year extension for substantial underreporting as exists for IRS penalties and federal tax law. The three-year or indefinite periods are the only assessment windows applicable to Florida Sales and Use Tax.
What Happens After This Is Completed
After you respond to an enforcement action or meet the deadline, the Florida DOR typically continues its examination or review process. The state may request additional information, conduct further analysis, or issue preliminary findings. If the examination concludes in your favor, the Department of Revenue issues a closing letter with no additional tax due.
If the state determines that tax is owed, it issues a formal assessment or deficiency notice that includes the amount, calculation, and payment or appeal deadline. The evaluation consists of detailed information on how the tax was calculated, applicable tax penalties, and accrued interest based on the daily interest rate factor in effect during the delinquency period.
Understanding Penalty Relief Options
Tax penalties are assessed under Florida Statute 212.12, but the Department of
Revenue has the authority to settle or compromise penalties under specific circumstances. The state may waive penalties when noncompliance is due to reasonable cause and not willful negligence, willful neglect, or fraud under Florida sales and use tax law. Florida Administrative Code rules provide detailed grounds for reasonable cause relief.
Automatic penalty compromise rules apply to compliant filers. For quarterly filers, penalties may be automatically waived if you have had no noncompliant filing events in the preceding 12 months and no unresolved liabilities. Monthly filers may qualify with zero or one prior noncompliant event within 12 months, depending on specific conditions.
Offers in Compromise and Settlement Options
Florida's compromise authority allows compromise of tax, interest, or tax penalties on grounds of doubt as to liability or collectibility. The state may also compromise when noncompliance is due to reasonable cause. The procedures require written requests with supporting documentation submitted to the Florida Department of Revenue.
To request a compromise, submit a detailed written explanation of why the full amount should not be collected, along with financial documentation supporting your position.
The Department of Revenue evaluates compromise requests based on statutory criteria and responds in writing with its determination.
Understanding Criminal Sales Tax Investigations
In cases involving suspected fraud, willful evasion, or knowingly filing false returns, the
Florida Department of Revenue may refer matters to the Criminal Investigations
Division. The Criminal Investigations Unit conducts criminal sales tax investigations separately from civil audits and collection activities. Criminal charges under Florida law can result in felony prosecution for substantial or patterned fraudulent activity.
Civil enforcement and criminal investigation proceed on separate tracks. Most sales tax enforcement actions are civil matters resolved through assessments, payments, or payment plans. Criminal referrals are reserved for cases involving intentional fraud or willful evasion rather than negligence or mistake.
Common Mistakes to Avoid
Several errors can complicate or delay the resolution of Florida sales tax enforcement actions. Missing response deadlines can result in an assessment without examination or in the forfeiture of appeal rights under Florida law. Providing incomplete documentation may not satisfy the state's information request and can trigger additional notices.
Making informal agreements without documentation is risky; verbal promises with
Florida DOR staff should be confirmed in writing. Failing to respond to follow-up notices escalates enforcement action and may trigger liens or levies after the 90-day collection processing fee threshold.
Sending original documents instead of copies can result in lost records; always send copies and retain originals. Disputing findings without supporting evidence typically fails because claims must be backed by documentation under Florida sales and use tax law.
Frequently Asked Questions
How long does a typical sales tax examination take?
Examination duration varies based on complexity, responsiveness, and the period examined. Some examinations are resolved in months; others take longer. Contact the assigned Florida DOR representative for an estimated timeline specific to your case.
What happens if I cannot provide documentation for a specific period?
If records are missing or incomplete, explain the situation in writing to the Department of
Revenue. The state may accept reasonable reconstructions, bank records, or other supporting evidence. However, the inability to document sales may result in an assessment based on alternative methods or available information.
Can I request an extension to respond to the notice?
Contact the assigned Florida DOR representative to request additional time. Extensions are not automatic, but the state typically works with taxpayers who communicate in advance. Submit requests before the deadline whenever possible.
What is the difference between civil enforcement and criminal investigation?
Civil enforcement addresses the collection of unpaid taxes through assessments, payment plans, and collection actions. Criminal investigation by the Criminal
Investigations Division addresses suspected fraud or willful evasion and can result in criminal charges. Most cases are civil matters.
Facing State Tax Enforcement Action?
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