Most Florida auto dealers know that sales tax audits can result in financial headaches—back taxes, interest, and penalties. But what many don’t realize is that a sales tax audit can also become something far more serious: a criminal investigation.

Florida treats sales tax as trust fund money—tax that your dealership collects from customers on the state’s behalf. When it’s not remitted properly, the state doesn’t just see it as a mistake. In some cases, they treat it as theft of state funds—and they prosecute it accordingly.

In this article, we’ll explain the difference between a routine sales tax audit and a criminal investigation, walk through the red flags the Florida Department of Revenue (FDOR) watches for, and help you understand what to do if your dealership is at risk.

The Key Difference: Civil Audit vs. Criminal Tax Investigation

A civil audit looks at whether your dealership paid the right amount of tax. You may owe more, but the resolution involves assessments, protests, and payment plans—not jail time.

A criminal investigation, on the other hand, focuses on intent. Did the dealer knowingly collect tax but fail to remit it? Was tax intentionally underreported? Was documentation forged or backdated?

If the answer to any of those is yes—or if the FDOR thinks it might be—you could find yourself the target of a criminal tax case. These cases are prosecuted by the Office of Statewide Prosecution or your local State Attorney’s Office, and they often begin with the same paperwork that launches an ordinary audit.

Common Triggers for Criminal Investigations in Auto Dealerships

Here are some red flags that may cause a civil audit to escalate into a criminal case:

🚩 1. Collecting but not remitting sales tax

This is the single biggest red flag. If your dealership collected sales tax from buyers and kept it—either by not filing DR-15s at all or filing them with false numbers—the FDOR may refer your case for criminal prosecution.

Florida Statutes § 212.15(1) makes it a third-degree felony to fail to remit tax held in trust.

🚩 2. Pattern of late or non-filing

Filing your DR-15 returns late a few times may not get you into serious trouble. But filing late or skipping returns altogether—especially when tax was clearly collected—suggests to the state that you’re using tax money to fund operations. This can support a claim of willful evasion.

🚩 3. False statements or doctored deal jackets

Submitting altered records, omitting transactions from DMS data, or providing falsified exemption documents (like out-of-state removal affidavits or DR-13s) can lead to fraud charges.

🚩 4. Large cash transactions with poor documentation

Auditors and investigators scrutinize high-cash-volume dealers, especially if they find discrepancies between reported taxable sales and actual cash deposits. If a pattern of “missing” sales emerges—particularly on cash deals—it could be viewed as intentional concealment.

🚩 5. Repeat offenses

If your dealership has been audited before and assessed for underpayment, a second audit with the same problems could lead to criminal charges. FDOR may argue that you had notice of the problem and chose not to fix it.

Real Case Example: Florida v. Auto Dealer Owner

In one recent case, the FDOR audited a Central Florida used car dealership and discovered that the owner had collected over $180,000 in sales tax that was never remitted. The dealer had filed DR-15 returns showing little or no tax due, despite records showing taxable vehicle sales. After reviewing bank deposits, DHSMV records, and deal jackets, the FDOR referred the case for criminal prosecution.

The owner was charged with:

• Felony theft of state funds

• Willful failure to remit tax

• Filing false documents

Ultimately, the dealer faced jail time, restitution, and loss of license—a devastating outcome for what began as a “routine” audit.

How the Criminal Investigation Process Works

If an FDOR auditor sees signs of intentional misconduct, they will stop asking questions. That’s not a good sign.

At that point, the case may be referred to the FDOR’s Criminal Investigations Unit (CIU) or to another law enforcement agency. Here’s how the process typically unfolds:

1. Referral and preliminary investigation

   • The auditor refers the case with supporting documentation.

   • Investigators quietly gather more evidence—bank records, DMS exports, witness statements.

2. Subpoenas and interviews

   • You may receive a subpoena for records or be asked to come in for an “informal” interview.

   • Never attend one of these without legal counsel.

3. Filing of criminal charges

   • If the state attorney believes there’s enough evidence of intent, they may file felony charges.

   • You’ll be arrested or summoned to court, and the case proceeds like any other criminal prosecution.

Penalties for Criminal Sales Tax Violations in Florida

Florida law imposes stiff penalties for intentional sales tax violations:

Florida Statutes § 212.15 – Treatment of Sales Tax and Penalties for Non-Remittance

Penalties for Intentional Failure to Remit Sales Tax (Theft of State Funds)

In addition to these criminal charges, motor vehicle dealers charged with criminal offenses may face:

• Permanent revocation of your motor vehicle dealer license

• Restitution and civil penalties

• Loss of business reputation

What To Do If You Suspect a Problem

If you’re concerned that your dealership may be out of compliance—especially if you’ve collected tax that hasn’t been remitted—the worst thing you can do is wait for the Department to find it.

Here’s what to do:

• Stop filing inaccurate returns immediately

• Do not destroy or alter records

• Engage legal counsel experienced in state tax matters

• Consider voluntary disclosure, if appropriate, to resolve the issue before it becomes criminal

At Moffa Tax Law, we represent auto dealers not just in audits but in criminal tax matters. We can help assess your risk, work toward a resolution with the FDOR, and protect your rights if an investigation has already begun.

Final Thought: Don’t Let a Tax Error Become a Criminal Case

Not every sales tax mistake is a crime—but some of them look that way to the Department of Revenue. If you’re concerned about unfiled returns, tax collected but not remitted, or questionable documentation, now is the time to act—not after the Department has launched a criminal probe.

We’re here to help. If you’re an auto dealer facing a sales tax audit or suspect you’re under investigation, contact us today. The earlier we get involved, the more we can do to protect your dealership—and your future.