Florida Tax Audit Attorney | Florida Tax Audit Defense | Florida State and Local Tax Audit Representation
Florida Tax Audit Defense
Moffa Tax Law provides expert tax audit defense for Florida businesses, offering tailored services from pre-audit preparation to representation and appeals.
Protecting Businesses in Florida Tax Audits
A Florida tax audit can be an overwhelming and time-consuming process, putting businesses at risk of significant financial liabilities, penalties, and interest. The Florida Department of Revenue (FDOR) aggressively audits businesses to ensure compliance with state tax laws, including sales and use tax, corporate income tax, and other state and local taxes. Without proper legal representation, businesses may end up overpaying taxes or facing costly penalties due to mistakes in reporting, record-keeping, or misinterpretations of Florida tax laws.
At Moffa Tax Law, we are a boutique state and local tax law firm focusing exclusively on representing businesses in Florida tax audits. We have extensive experience handling audits conducted by the FDOR and other state and local taxing authorities. Our firm provides businesses with strategic defense against aggressive audit practices, ensuring that your rights are protected throughout the process.
Comprehensive Florida Tax Audit Services
Understanding the Florida Tax Audit Process
The Florida Department of Revenue initiates tax audits for various reasons, including random selection, discrepancies in tax filings, or industry-wide enforcement initiatives. Once an audit is initiated, businesses are required to provide records and documentation that support their tax filings. The audit process generally involves the following stages:
- Audit Notification – The FDOR sends an official notice informing the business of the audit and specifying the tax periods under review.
- Records Request & Examination – The auditor requests tax returns, financial statements, invoices, and other business records to assess tax compliance.
- Preliminary Findings – After reviewing the records, the FDOR provides an initial assessment, identifying any alleged underpayments or errors.
- Notice of Proposed Assessment (NOPA) – If discrepancies are found, the FDOR issues a NOPA, detailing the proposed tax liability, penalties, and interest.
- Appeal or Settlement Negotiation – Businesses have the right to challenge audit findings through administrative appeals, protests, and litigation if necessary.
Navigating this process without legal guidance can lead to errors, overpayments, or severe financial consequences. Our firm works with businesses to manage every stage of the audit, ensuring that all legal options are explored and leveraged to achieve the best possible outcome.
Florida Sales Tax Audits
Sales and use tax audits are among the most common tax audits conducted by the FDOR. Florida businesses are required to properly collect, report, and remit sales tax on taxable transactions. Errors in sales tax compliance—such as failing to collect tax, incorrect exemption claims, or improper reporting—can result in substantial tax assessments. The FDOR aggressively enforces sales tax compliance, often issuing high penalties for even unintentional mistakes.
Our firm provides businesses with strong legal defense in Florida sales tax audits, helping them:
- Properly respond to audit notices and records requests.
- Identify and correct potential compliance errors before they escalate.
- Challenge incorrect audit findings and overreaching assessments.
- Negotiate favorable settlements or appeal tax assessments when necessary.
Florida Corporate Income Tax Audits
Corporate income tax audits target businesses operating in Florida to ensure proper tax filings and compliance with state tax laws. The FDOR scrutinizes income reporting, deductions, apportionment methods, and tax credits. Businesses found to have underreported income or improperly claimed deductions may face significant tax liabilities, penalties, and interest.
Our firm represents businesses in corporate income tax audits, ensuring that:
- The FDOR follows proper audit procedures and does not overstep its authority.
- Taxable income, deductions, and apportionment methods are accurately calculated and legally defended.
- Businesses do not overpay taxes due to misinterpretations or aggressive enforcement tactics.
- Administrative appeals and litigation strategies are pursued when necessary to challenge unfavorable audit results.
Audit Defense for Multi-State Businesses
Florida businesses with operations in multiple states may face complex tax audits that involve nexus determinations, apportionment disputes, and multi-state tax liabilities. The FDOR actively audits companies with out-of-state operations to ensure that Florida receives its share of tax revenue. Businesses with significant sales, employees, or property in Florida may be subject to state taxation, even if they are based elsewhere.
We help multi-state businesses defend against aggressive tax audits by:
- Analyzing tax nexus issues and determining whether the FDOR has proper jurisdiction to assess taxes.
- Ensuring that income and sales are properly apportioned to minimize unnecessary tax exposure.
- Challenging unfair tax assessments through administrative protests, appeals, and litigation.
Heavily Targeted Industries in Florida Tax Audits
Certain industries in Florida face a higher risk of tax audits due to the nature of their business operations, cash transactions, and common compliance challenges. The Florida Department of Revenue frequently audits businesses in these industries to ensure compliance with sales tax, corporate income tax, and other state tax obligations.
Convenience Store Audits
Convenience stores (C-stores) are a primary target for Florida sales tax audits due to their frequent cash transactions, high sales volume, and complex taxability of items sold. Many convenience store owners struggle with accurately reporting taxable and non-taxable sales, including:
- Proper classification of food and beverage sales (taxable vs. non-taxable items).
- Compliance with tobacco and alcohol excise taxes.
- Managing lottery ticket commissions and associated tax obligations.
- Proper record-keeping to substantiate exempt sales.
The FDOR aggressively enforces sales tax compliance in this industry, often issuing substantial penalties for even minor record-keeping errors. Our firm assists convenience store owners in navigating audits, challenging unfair assessments, and implementing proactive tax strategies to minimize risks.
Automobile Dealership Audits
Auto dealerships in Florida frequently face tax audits due to the complexity of motor vehicle sales tax, trade-in credits, and lease transactions. The FDOR often scrutinizes:
- Sales tax collection on vehicle sales, including trade-in credits.
- Proper handling of out-of-state vehicle sales and documentation compliance.
- Dealer fees and how they are taxed.
- Service and repair labor vs. parts taxability.
Errors in any of these areas can result in significant tax assessments. Our firm helps auto dealers defend against tax audits, ensuring that sales tax is properly applied and exemptions are well-documented to avoid unnecessary liabilities.
Other High-Risk Industries for Florida Tax Audits
- Restaurants & Bars – Due to high cash sales, employee tip reporting, and complex food taxability rules.
- Construction & Contractors – Frequent issues with material vs. labor taxation and subcontractor compliance.
- E-Commerce & Online Retailers – Ensuring compliance with economic nexus rules and remote seller obligations.
- Medical & Healthcare Providers – Taxability of medical devices and professional services under Florida law.
- Hospitality & Vacation Rentals – Compliance with transient rental taxes and short-term lease tax requirements.
The FDOR’s focus on these industries means businesses must be prepared for heightened scrutiny. Our firm provides tailored audit defense strategies, ensuring compliance while aggressively challenging unjust assessments.
Understanding Key Florida Tax Audit Documents
Florida tax audits involve various official documents that play a critical role in the audit process. Understanding these documents and responding appropriately is essential for protecting your business from excessive tax liabilities.
DR-840 – Notice of Intent to Audit Books and Records
The Florida Department of Revenue initiates tax audits by issuing Form DR-840, also known as the Notice of Intent to Audit Books and Records. This document notifies the taxpayer that the FDOR will be reviewing financial records, tax returns, and supporting documentation for a specified period. Receiving a DR-840 is a clear indication that the state is scrutinizing your tax compliance, and businesses should take immediate action.
Once a DR-840 is issued, businesses must comply with FDOR record requests while also ensuring they do not provide unnecessary or overly broad documentation that could expand the scope of the audit. Our firm assists clients in responding strategically to DR-840 notices, ensuring that they comply with state requirements while protecting their legal rights.
DR-1215 – Notice of Intent to Make Audit Changes
During the audit, the Florida Department of Revenue may issue Form DR-1215, the Notice of Intent to Make Audit Changes. This document outlines preliminary findings, including adjustments to reported tax liabilities and any discrepancies identified by the auditor. The DR-1215 is a crucial stage in the audit process, as it provides businesses with an opportunity to respond to the auditor’s proposed changes before a formal assessment is issued.
Our firm works closely with businesses to analyze the DR-1215, challenge incorrect audit findings, and present additional documentation or arguments to refute improper adjustments. Responding effectively to the DR-1215 can help mitigate tax liabilities before the state finalizes its assessment.
NOPA – Notice of Proposed Assessment
If the auditor believes a business owes additional tax after reviewing the records, the FDOR will issue a Notice of Proposed Assessment (NOPA). The NOPA serves as an official notice that the state intends to assess additional tax, penalties, and interest against the business. The business has a limited time to respond to the NOPA before the assessment becomes final.
At this stage, it is crucial to act quickly. Our firm helps businesses file formal protests to dispute the proposed assessment, providing legal arguments, financial analysis, and supporting documentation to challenge the FDOR’s findings. If necessary, we escalate disputes through administrative hearings and litigation to ensure our clients receive a fair review of their case.
Defending Against Florida Tax Audit Penalties and Interest
Florida tax audits often result in not only additional tax liabilities but also substantial penalties and interest charges. Businesses that are found to be non-compliant may face:
- Negligence Penalties – Applied when tax underpayments are due to carelessness, oversight, or errors in reporting. These penalties can add up quickly and significantly increase the overall liability.
- Fraud Penalties – Severe penalties imposed when the FDOR determines that tax was intentionally underreported or manipulated to avoid payment. Fraud penalties can be as high as 50% of the unpaid tax liability and may lead to further legal consequences.
- Failure to File or Pay Penalties – Assessed when businesses fail to timely file tax returns or remit taxes owed. These penalties often accrue over time, compounding the financial impact on a business.
- Substantial Understatement Penalties – Imposed when the FDOR determines that the underreported tax amount exceeds a certain percentage of the total tax liability.
Interest on Tax Deficiencies
In addition to penalties, businesses facing a Florida tax audit may also be responsible for significant interest charges. Interest begins to accrue from the original due date of the tax and continues to accumulate until the liability is fully paid. The FDOR adjusts interest rates periodically, which means that delayed payments can lead to higher costs over time.
Our firm aggressively defends businesses against excessive or unfair penalties and interest, working to reduce or eliminate additional financial burdens imposed by the FDOR. We utilize legal challenges, settlement negotiations, and penalty abatement requests to help businesses minimize financial exposure associated with tax audits. In many cases, we are able to demonstrate reasonable cause for tax discrepancies, which may lead to reduced penalties or interest waivers.
Why Hire a Florida Tax Audit Attorney?
Navigating a Florida tax audit without skilled legal representation can lead to significant financial losses and legal risks. The FDOR is aggressive in its audit practices, and businesses without proper defense may be forced to pay excessive tax assessments or face prolonged disputes. Hiring an experienced Florida tax audit attorney ensures that your business:
- Has strong legal representation throughout the audit process.
- Can effectively challenge incorrect tax assessments and avoid unnecessary tax liabilities.
- Receives guidance on compliance strategies to prevent future audits.
- Is protected from aggressive enforcement actions and excessive penalties.
At Moffa Tax Law, we focus exclusively on Florida state and local tax matters, providing businesses with the dedicated legal support needed to successfully navigate tax audits. Whether you are currently under audit or want to prepare for potential tax enforcement actions, our firm is here to protect your rights and financial interests.
A Florida tax audit is a formal examination of a business’s tax records by the Florida Department of Revenue (FDOR) to verify compliance with state tax laws. The FDOR may audit a variety of state and local taxes, including sales tax, use tax, corporate income tax, reemployment tax, and more. These audits are often triggered by red flags in tax returns, random selection, or targeted enforcement of certain industries.
During a Florida DOR audit, the state reviews financial statements, sales records, exemption certificates, and tax filings to identify underpayments or reporting errors. If discrepancies are found, the FDOR may issue a Notice of Proposed Assessment (NOPA) detailing additional taxes, penalties, and interest owed. Without proper legal representation, businesses often overpay or face unnecessary liabilities. That’s why partnering with a Florida tax audit attorney is essential to protect your rights and minimize exposure.
Businesses receive Florida Department of Revenue audit notices for several reasons. In some cases, the FDOR selects businesses for audits at random. In others, audits are triggered by specific factors, such as:
- Filing inconsistencies or missing returns,
- Industry-wide enforcement initiatives (e.g., targeting cash-heavy businesses),
- Red flags in sales tax or corporate income tax returns,
- Complaints or whistleblower reports,
- Nexus or multi-state operations involving Florida activity.
If your business receives a Form DR-840 (Notice of Intent to Audit Books and Records), it’s important to act quickly. The FDOR will likely review several years of data, and any mistakes or lack of documentation can result in substantial Florida tax audit penalties and interest. A tax audit attorney can help interpret the notice, guide you through what records to provide, and develop a defense strategy to minimize your risk.
Form DR-840 is the Florida Department of Revenue’s official audit initiation notice, formally titled the Notice of Intent to Audit Books and Records. It signals that the state has selected your business for a tax audit and intends to examine specific tax types (usually sales and use tax, corporate income tax, or both) for a defined audit period.
This form requires your business to comply with extensive document requests, including tax returns, sales records, and financial statements. Failure to respond or provide adequate records can result in the FDOR making estimated assessments, which are often significantly inflated. Once a DR-840 is issued, you are already under audit, and any errors may trigger additional taxes, penalties, and interest.
Our firm assists clients in strategically responding to DR-840s to:
- Limit the scope of the audit,
- Avoid unnecessary exposure,
- Ensure that records are complete and correctly interpreted,
- Begin preparing for potential challenges or settlements.
During a Florida tax audit, the FDOR will typically request a comprehensive set of business records to determine tax compliance. These may include:
- Sales tax returns (DR-15) and supporting sales data,
- Corporate income tax returns (F-1120) and apportionment schedules,
- Invoices and receipts for purchases and sales,
- Bank statements and general ledgers,
- Resale and exemption certificates,
- Payroll records and employee data,
- POS system reports and reconciliations.
Incomplete, missing, or poorly organized records may prompt the FDOR to make adverse assumptions or issue estimated assessments. These assessments often come with significant penalties and interest, especially if the Department determines that errors were negligent or intentional. For example, a business that underreports sales tax due to poor documentation may face:
- 10% negligence penalties,
- Substantial understatement penalties if liability exceeds certain thresholds,
- Interest charges that accrue from the original due date of the tax.
Proper audit defense begins with careful record review, preparation, and guidance from an experienced Florida tax audit attorney.
The Florida Department of Revenue imposes a range of penalties and interest charges during and after a tax audit if it finds that your business owes additional taxes. These can significantly increase your liability and often exceed the amount of tax originally assessed. Common penalties include:
- Negligence Penalties – Typically 10% of the underpayment when the FDOR determines the business was careless or lacked proper controls.
- Substantial Understatement Penalties – Imposed when the tax understatement exceeds a certain percentage of the liability.
- Failure to File or Pay Penalties – Assessed for late-filed returns or unpaid balances.
- Fraud Penalties – Up to 50% of the underpaid tax if the Department believes fraud or intentional evasion occurred.
In addition to penalties, the FDOR charges interest on unpaid tax, which begins accruing from the original due date and continues until the balance is paid in full. Interest rates are adjusted semiannually and can compound into substantial amounts over time.
At Moffa Tax Law, we defend clients from unjust penalties and work to reduce or eliminate interest through legal arguments, administrative appeals, and penalty abatement requests. In many cases, we can demonstrate reasonable cause, which can lead to successful waivers or reductions.
A Notice of Proposed Assessment (NOPA) is a formal notice issued by the Florida Department of Revenue (FDOR) stating its intention to assess additional tax, penalties, and interest following a tax audit. The NOPA is typically issued after the FDOR reviews your records and determines that underreporting, noncompliance, or other issues have occurred.
This is a critical turning point in the Florida tax audit process. Once a NOPA is issued, you have only 60 days to file a written protest. If you fail to act during that period, the assessment becomes final, and the Department may initiate collection actions, including tax liens or levies. At this stage, it is essential to engage a Florida tax audit defense attorney to help challenge the proposed findings and prepare a strong response.
To protest a Florida tax audit assessment, you must file a formal written protest within 60 days of receiving the Notice of Proposed Assessment (NOPA). The protest must clearly outline your disagreement with the FDOR’s findings and include supporting legal arguments and documentation.
You can also request an informal dispute resolution conference, where you have the opportunity to present your case to a tax conferee. This protest process is a key opportunity to avoid further escalation, such as enforced collections or litigation. A tax audit protest should be well-documented and legally grounded, especially in audits involving Florida sales tax, corporate income tax, or multistate nexus issues.
The Informal Dispute Resolution (IDR) process is an administrative review opportunity provided by the Florida Department of Revenue to resolve tax disputes without litigation. After you file a protest to a proposed assessment, you may request an IDR conference, during which you can make an oral presentation of your legal and factual arguments.
IDR is particularly useful in complex Florida sales tax audits or corporate income tax audits where detailed explanations or documentation may help overturn the Department’s initial findings. Engaging a Florida tax audit attorney during IDR can significantly improve your chances of reaching a favorable resolution.
While most Florida tax audits result in civil penalties and interest, in rare cases, audits may uncover evidence of fraud or intentional tax evasion. If the Florida Department of Revenue believes that a business willfully underreported taxes or falsified records, it may refer the case for criminal investigation or prosecution.
Criminal penalties could include fines, restitution, and even jail time in extreme cases. Most businesses do not face criminal liability, but high-dollar discrepancies, forged documents, or repeated audit violations can elevate the risk. Legal representation is essential if fraud is alleged.
Nexus is a legal term that describes a sufficient connection between a business and the state of Florida that triggers tax obligations. The Florida Department of Revenue uses both physical presence and economic activity standards to determine nexus. If nexus is established, the FDOR may initiate a tax audit to assess whether the business has properly collected and remitted sales tax or filed corporate income tax returns.
Businesses with employees, property, or significant sales in Florida—even if headquartered out of state—may unknowingly establish nexus. This is a common area of risk for online retailers, service providers, and multistate businesses. Nexus determinations often result in Florida tax audits, particularly involving sales tax compliance and income apportionment.
In most cases, the Florida Department of Revenue can audit your business for up to three years from the date a return was filed. However, if no return was filed, or if fraud is suspected, the statute of limitations can be extended indefinitely.
Certain audit types, including those involving nexus disputes or underreported sales, may prompt the FDOR to review older records or multiple tax periods. Businesses should maintain complete tax documentation for at least three to five years to be audit-ready.
Florida sales tax audits are commonly triggered by:
- Underreported gross sales,
- Failure to remit sales tax on taxable items,
- Improper exemption certificates,
- Inconsistent monthly filings,
- Cash-intensive operations,
- Filing errors or zero returns.
High-risk industries such as restaurants, auto dealers, and convenience stores are frequent targets for sales tax audits due to complex taxability rules and high audit recoveries. A proactive compliance review by a tax attorney can help prevent audit exposure in these sectors.
The Florida Department of Revenue charges interest on underpaid taxes identified during an audit. Interest begins accruing from the original due date of the return and continues until the balance is paid in full. The interest rate is adjusted twice per year and is compounded daily.
Interest can make up a significant portion of your total liability in a tax audit. For example, a sales tax underpayment of $50,000 could easily accumulate thousands of dollars in interest over several years. Timely resolution and strategic defense are crucial to prevent compounding costs.
Yes. In many cases, businesses are able to settle their tax liabilities for less than the full assessed amount, particularly when there are valid legal defenses, lack of clear documentation, or financial hardship. Settlement may occur during the audit, through informal dispute resolution, or after a protest has been filed.
Working with a Florida tax audit attorney improves your negotiating position and helps you identify legal arguments, procedural errors, or factual misunderstandings that could justify a reduced assessment. We regularly help clients reach fair resolutions without the need for litigation.
An estimated assessment occurs when the Florida Department of Revenue determines that a business has failed to keep or produce adequate records during an audit. Instead of using actual figures, the Department estimates tax liability based on industry averages, third-party data, or assumptions about your business activity.
Estimated assessments often overstate tax owed and result in excessive penalties and interest. Our firm helps businesses challenge estimated assessments by reconstructing records, providing additional documentation, and disputing flawed assumptions.
The FDOR frequently audits industries that:
- Handle high volumes of cash,
- Have complex taxability rules,
- Involve frequent exemption claims,
- Rely on subcontractors or independent contractors.
Common targets include:
- Restaurants and bars,
- Auto dealerships,
- Construction companies,
- Convenience stores,
- E-commerce retailers,
- Medical service providers,
- Vacation rental hosts.
These sectors face elevated audit risk and should prioritize compliance and documentation.
Yes. Most Florida tax audits are resolved through administrative processes such as informal dispute resolution, protests, or negotiated settlements. Only a small percentage of disputes require litigation before the Division of Administrative Hearings (DOAH) or in court.
Legal representation during the audit and appeals process is often sufficient to reach resolution and avoid lengthy or expensive court proceedings.
If your business receives a Florida Department of Revenue audit notice (such as Form DR-840), you should:
- Contact a Florida tax audit attorney immediately,
- Begin gathering requested records and tax returns,
- Avoid providing unnecessary documentation,
- Do not make assumptions or admissions during communications with the FDOR.
Acting quickly and strategically can significantly affect the outcome of the audit and help avoid future complications.
The timeline of a Florida tax audit varies depending on the complexity of the issues involved. Simple audits may conclude in a few months, while more complex audits—particularly those involving multistate issues or multiple tax types—can take a year or longer.
Delays often occur due to missing records, extended negotiations, or administrative backlogs. Proactive engagement and legal support can help streamline the process and keep the audit on track.
While not legally required, working with a Florida tax audit attorney significantly improves your chances of a favorable outcome. An experienced attorney understands the FDOR’s audit procedures, knows how to challenge improper assessments, and can negotiate reduced penalties and settlements.
Legal representation is particularly valuable when the audit involves high-dollar liability, multiple tax years, missing records, or risk of fraud allegations. Our firm provides full-service audit defense for businesses of all sizes and industries.
Why Choose Our Florida Tax Audit Defense Services?
Expertise and Experience
Our team of tax professionals brings extensive experience and expertise in handling a wide range of tax audits in Florida. We have a deep understanding of Florida’s tax laws and regulations, enabling us to anticipate audit issues and develop proactive defense strategies. Whether you’re facing a sales tax audit, income tax audit, payroll tax audit, or any other type of state tax audit, we have the knowledge and resources to effectively represent your interests.
Proactive Approach
We believe in taking a proactive approach to tax audit defense. Our process begins with a comprehensive review and analysis of your financial records, tax filings, and compliance practices. By identifying potential audit risks early on, we can address any issues before they become audit challenges. This proactive preparation not only minimizes the likelihood of audit adjustments but also positions your business for a successful audit outcome.
Personalized Strategies
We understand that every business is unique, with its own set of challenges and circumstances. That’s why we develop personalized defense strategies tailored to your specific needs and industry requirements. Whether you’re a small business or a large corporation, we take the time to understand your business operations and goals to craft effective defense strategies that protect your interests during the audit process.
Compliance Assurance
Ensuring compliance with Florida tax laws is essential to avoiding penalties and fines. Our proactive approach to tax audit defense not only defends your business during audits but also enhances your overall compliance practices. We work closely with your team to implement best practices and procedures that help mitigate audit risks and maintain compliance with state tax regulations.
Our Comprehensive Services
At Moffa Tax Law, we offer a wide range of tax audit defense services to meet the needs of businesses throughout Florida. Our services include:
Pre-Audit Preparation
Comprehensive Review: Thorough review and analysis of financial records, tax filings, and compliance practices to identify potential audit risks. Documentation Preparation: Assistance with organizing and preparing documentation required for the audit process, including supporting documentation for deductions and exemptions.
Audit Representation
Representation: Serve as your dedicated advocate and representative during all stages of the audit process. Audit Defense: Respond to audit inquiries, provide explanations and documentation, and negotiate with tax authorities on your behalf to resolve audit issues.
Appeals and Resolutions
Appeals Representation: Handle appeals and negotiate with tax authorities to achieve favorable resolutions and outcomes. Litigation Support: Provide support and guidance in cases where litigation or dispute resolution is necessary to resolve tax audit issues.
Compliance Consulting
Compliance Reviews: Conduct comprehensive reviews of your current compliance practices and procedures to identify areas for improvement. Training and Education: Provide training and education to your staff on best practices for maintaining compliance with Florida tax laws and regulations.
Client-Centered Approach
At Moffa Tax Law, client satisfaction is our top priority. We strive to build strong, long-lasting relationships with our clients based on trust, integrity, and results. Our team is committed to providing personalized attention and responsive service to ensure that your business receives the highest level of representation and support throughout the tax audit process.
- (954) 800-4138
-
Trade Centre South, Suite 930A
100 W Cypress Creek Rd. Fort Lauderdale, FL 33309 - [email protected]
Schedule a Consultation with a Florida Tax Audit Attorney Today
