Inside the Mind of a Florida Department of Revenue Auditor

For many businesses in Florida, the phrase “sales tax audit” evokes anxiety, confusion, and frustration. But beneath the stack of DR-1215s, DR-840s, and records requests, there is a human being: a sales tax auditor. Understanding what a Florida Department of Revenue auditor actually wants to talk about—what questions they ask, what documentation they expect, and what triggers their scrutiny—can be the difference between a minor assessment and a costly tax liability.

This article explores the goals, focus areas, and audit communication preferences of Florida sales tax auditors. Whether you’re undergoing your first Florida sales tax audit or you’re a seasoned taxpayer, knowing what the auditor wants to discuss is critical for effective sales tax audit defense.

I. The Auditor’s Primary Goal: Tax Compliance, Not Conversation

Let’s start with the fundamentals: a Florida Department of Revenue auditor is not coming to your business to make small talk or trade stories about your industry. Their job is clear-cut: to determine whether your business has properly collected, reported, and remitted Florida sales and use tax in accordance with Chapter 212, Florida Statutes, and applicable Department rules.

This means they want to talk about:

• Your taxable and exempt sales

• Your business’s recordkeeping practices

• Your sales and use tax returns (DR-15s)

• Documentation supporting any exemptions claimed

• Use tax owed on out-of-state purchases

• Industry-specific taxability issues (e.g., restaurants, contractors, auto dealers)

But within that structured framework are dozens of subtopics the auditor will probe. Let’s break them down.

II. The First Visit or Call: Establishing Scope and Control

The initial phase of a Florida sales tax audit often begins with a DR-840 Notice of Intent to Audit Books and Records, followed by a kickoff meeting or phone call. This is when the auditor will want to talk about:

• What the business does: industry, NAICS code, business model

• How sales are made: in-store, online, delivery, out-of-state

• Which POS system or accounting software is used

• How sales are recorded and reconciled

• Who prepares the sales tax returns

• Who will be their point of contact

• The requested period (usually the last 3 years)

They may also ask for:

• A chart of accounts

• Sample invoices

• Sales tax exemption certificates

• Federal income tax returns

This is less of a conversation and more of an intake interview. Still, your responses—and your demeanor—can shape the rest of the audit.

III. What They Really Want to Know: Sales Tax Exposure

A Florida sales tax auditor wants to talk about exposure. That is, any area where your business might have failed to charge or remit the correct amount of tax. Here’s where the conversation gets detailed:

1. Taxable vs. Non-Taxable Sales

Auditors will want to know:

• Are you properly charging tax on tangible personal property?

• Are you improperly excluding services that are taxable under Florida law (e.g., security services, commercial cleaning)?

• Are your sales consistently treated the same across your invoices and records?

Expect questions like:

• “Can you walk me through how this item is sold and taxed?”

• “What documentation do you have to support this exemption?”

• “Why was this sale not taxed?”

2. Exemption Certificates

If your business deals with resale or exempt customers, the auditor will want to see:

• Valid Florida Resale Certificates (Form DR-13)

• Annual renewals

• Certificates of exemption for government or nonprofit buyers

They’ll ask:

• “How do you store and track exemption certificates?”

• “Do you validate them through the DOR’s Certificate Verification System?”

This is a common audit pitfall. Missing or expired certificates = exposure.

3. Use Tax

Auditors often focus on use tax, especially for businesses that:

• Buy supplies or equipment online or out-of-state

• Take delivery in Florida but do not pay sales tax to the vendor

Expect the auditor to ask:

• “Do you buy from Amazon, eBay, or out-of-state wholesalers?”

• “How do you handle tax on business purchases?”

• “Can you provide a list of fixed asset purchases?”

IV. The Z-Tape and Sales Summary Deep Dive

If you’re in a retail or restaurant business, the auditor will be laser-focused on your Z-tapes, daily sales summaries, and POS reports.

They will ask:

• “Do you have Z-tapes for every day of the audit period?”

• “How are cash and credit card sales tracked separately?”

• “Do you have void and refund logs?”

• “What is your process for reconciling daily sales to your tax returns?”

Missing Z-tapes, underreported cash sales, or mismatched totals between your POS and DR-15 returns can lead to large assessments. In some cases, auditors will resort to markup analyses or bank deposit methods to estimate unreported sales.

V. The Auditor’s Favorite Topic: Inconsistent Reporting

Few things delight a Florida auditor more than inconsistencies between:

• Federal income tax returns and Florida DR-15 sales tax returns

• Sales reports and bank deposits

• Schedule C income and state taxable sales

• Your story and your records

The auditor will talk extensively about these inconsistencies—asking you to explain them, document them, or revise your filings.

VI. When They Suspect Fraud or Evasion

If a Florida auditor begins to suspect intentional underreporting, you can expect the tone and content of your conversations to shift dramatically. The auditor may begin asking about:

• Altered records or missing invoices

• “Off-the-books” sales

• Cash transactions not recorded in your books

• Previously audited periods with large discrepancies

In serious cases, the auditor may refer the matter to the Florida Department of Revenue’s Criminal Investigations Unit, or issue a subpoena for records.

This is when having a Florida sales tax audit defense attorney becomes crucial. The auditor isn’t just “talking” anymore—they’re building a case.

VII. The Endgame: What They’ll Talk About in the Exit Conference

At the end of a Florida sales tax audit, the auditor will hold an exit conference to go over their findings. They will talk about:

• Underreported sales or use tax

• Recommended assessment amounts

• Penalties and interest

• Your right to file a protest or request reconsideration

The auditor may issue a Notice of Intent to Make Audit Changes (DR-1215). If no agreement is reached, a formal Notice of Proposed Assessment (NOPA) will follow.

This is your chance to talk back. You can submit legal arguments, additional documents, or initiate settlement discussions—ideally with the help of a Florida tax attorney.

VIII. What They Don’t Want to Talk About (But You Might Try)

There are some topics auditors don’t want to spend time on:

• “I didn’t know I had to collect tax on that.”

• “Other businesses do it this way.”

• “My accountant told me this was fine.”

• “That’s how we’ve always done it.”

These explanations rarely persuade an auditor. While the Department of Revenue may waive penalties for reasonable cause, ignorance of the law is not a defense to tax liability.

IX. Strategies for Productive Auditor Conversations

If you must talk to the auditor, make the conversation strategic:

• Be respectful but cautious—never speculate.

• Stick to facts and documentation.

• Let your tax attorney or accountant handle technical questions.

• Keep communication written when possible.

• Don’t offer unnecessary information.

In many cases, it’s best to speak through legal counsel. The less said, the better—especially if you’re uncertain about your records or taxability.

X. Final Thoughts: Sales Tax Audits Are About Numbers, Not Narratives

Florida sales tax auditors are not there to argue policy or hear your business’s backstory. They want to review your records, identify underpayments, and assess tax, interest, and penalties. That’s it.

But by understanding what they want to talk about—and preparing for it—you can better defend your position, reduce liabilities, and avoid future audits.

If your business is facing a Florida sales tax audit, don’t wait until the auditor has finished their report. Early and proactive Florida sales tax audit defense is the key to minimizing exposure and preserving your rights.

Need Help with a Florida Sales Tax Audit?
At Moffa Tax Law, we represent businesses facing audits by the Florida Department of Revenue. From responding to DR-840 notices to challenging NOPAs and negotiating settlements, we provide strategic and aggressive sales tax audit defense. Contact us for a confidential consultation.

© 2025 Jeanette Moffa. All Rights Reserved.