The Florida Department of Revenue states that a tax audit is meant to be an “educational experience” for taxpayers, which helps businesses identify and rectify bookkeeping issues, which could lead to more tax liabilities. So, why are taxpayers audited? Officials say the goal of tax audits is to help ensure that the state’s tax laws are uniformly enforced, to discourage tax evasion, and to encourage taxpayers to comply with the law. While a vast majority of tax returns are accepted as filed, some returns are flagged to verify whether they are accurate and compliant.
It is not correct to assume that you will owe additional tax, penalty or interest if you are audited. There are many potential outcomes of an audit. There are also several ways in which an individual or business is selected for an audit. The Department of Revenue may use a number of sources to identify a potential audit including IRS information, computer-based random selection or business publications, journals, directories, etc.
What Happens During a Tax Audit?
The Florida Department of Revenue may conduct a desk audit, one that’s done in their offices or a field audit where auditors will conduct the audit at your place of business. When you are up for an audit, you will get a Notification of Intent to Audit Books and Records in the mail. This notice will provide crucial information including the audit period that the types of taxes to be reviewed or examined.
The auditor will also provide you with a list of documents you need to provide. This may include federal income tax returns, state tax returns, ledgers, property records, purchase and sales journals etc. Businesses are required to hang on to records for three years because an audit could very well extend that far back. If you don’t have the records or fail to produce them, the tax liability will be based on whatever information is available. If yours is a field audit, the auditor will contact you to arrange a date when he or she can review your records. It is important that you make the necessary records available so the audit can be completed smoothly.
After the Audit
Once the audit is completed, you will be notified by the auditor about the findings. If you don’t agree with the findings, it is important that you notify the auditor regarding your disagreement within 30 days. If you agree with the audit findings and owe money, sign the notice and pay whatever amount is due. If you are unable to pay the amount in full, contact the auditor to discuss potential payment plans.
If you feel intimidated by the auditor and are worried about paying taxes due, please contact an experienced Florida tax audit lawyer who will be able to advise regarding the best course of action. You may be able to avoid additional liability, or our lawyers will be able to help you come up with a way to pay the taxes you owe. Contact our Florida tax lawyers to find out how we can help you.