What to Expect in a Florida Sales Tax Audit of Your Restaurant

Running a restaurant in Florida means juggling a thousand moving parts—menus, staffing, suppliers, customer service, health inspections… and yes, taxes. One thing that catches many restaurant owners off guard? A sales tax audit by the Florida Department of Revenue (DOR).

If you’ve recently received a letter called a “Notice of Intent to Audit Books and Records” (Form DR-840), you’re not alone. Florida restaurants are one of the most frequently audited industries in the state. This article will walk you through what that means, what the DOR is looking for, and what to expect every step of the way—from the first letter to the final assessment.

Step 1: The Audit Begins – You Get a DR-840 Letter

The sales tax audit officially begins when you receive Form DR-840, titled Notice of Intent to Audit Books and Records. This isn’t just a routine letter—it’s the DOR’s formal way of saying:
“We’ve selected your business for a sales tax audit, and we want to review your records.”

The DR-840 will tell you:

• Which taxes they’re auditing (usually sales and use tax)

• The specific time period under review (typically the last three years)

• The name and contact info of the auditor assigned to your case

• A proposed start date for the audit

You’ll also see a statement about your rights as a taxpayer, including the right to representation.

Florida law gives you 60 days to prepare before the auditor can begin reviewing your records. That 60-day window is your chance to get organized—gather documents, understand your reporting history, and talk to a tax professional if you need help. The DOR may offer to start sooner if you waive that delay, but you don’t have to agree. In fact, unless you’re 100% confident you’re audit-ready, it’s best to use that time.

Step 2: What the Auditor Will Ask For

After you receive the DR-840 and the audit moves forward, the auditor will send a records request (sometimes informally called an “IDR,” or Information Document Request). This is a list of documents they want to see.

If you own a restaurant, you can expect them to ask for:

• Your sales tax returns (Form DR-15)

• Bank statements and daily deposit summaries

• POS system reports and Z-tapes (if applicable)

• Credit card processing statements

• Purchase invoices for food, alcohol, supplies

• Employee payroll records

• Third-party delivery platform reports (e.g., Uber Eats, DoorDash, Grubhub)

• Federal income tax returns (for comparison)

They’ll use these documents to look for inconsistencies or signs that you may have underreported sales or collected sales tax but failed to remit it. If your records don’t match up—or if they’re missing entirely—the auditor can use estimation techniques to recreate your sales figures. That can result in a much higher tax bill than you expected.

Common examples of estimation include:

• Comparing credit card sales to reported totals

• Using markup percentages (what you paid for goods vs. what you sold them for)

• Choosing a sample time period and applying it to the whole year

• Doing in-person observations of your restaurant’s activity

Step 3: Preliminary Results – You Get a DR-1215 Letter

Once the auditor finishes reviewing your records, they’ll send you Form DR-1215, called a Notice of Intent to Make Audit Changes. This is a draft report of what the auditor thinks you owe. It’s not final yet—this is your opportunity to review the findings and respond.

Here’s what’s typically included in a DR-1215:

• A detailed breakdown of proposed changes

• A summary of the additional tax, interest, and penalties being assessed

• An explanation of the auditor’s methods and findings

• A deadline to respond, usually within 30 days

This is your chance to push back if something looks wrong. Maybe the auditor misunderstood how your POS system works. Maybe they’re taxing exempt sales. Or maybe you have missing documents that could reduce your tax liability. If you don’t respond or provide additional records, the DOR will assume the audit is accurate—and move forward with a formal assessment.

You (or your tax representative) can usually request extra time to gather evidence or explain your position. But don’t ignore the DR-1215—it’s your best chance to fix problems before they become permanent.

Step 4: The Final Blow – The NOPA (Notice of Proposed Assessment)

If the issues raised in the DR-1215 aren’t resolved, the Department of Revenue will issue a Notice of Proposed Assessment (NOPA). This is the official tax assessment, and it has serious consequences.

The NOPA includes:

• The final amount of tax, interest, and penalties being assessed

• The time periods involved

• Instructions for how to challenge the assessment

Once the NOPA is issued, the clock starts ticking. You have only 60 days to file a written protest and formally challenge the audit. This protest goes to the DOR’s Office of the General Counsel, where it will be reviewed by lawyers rather than auditors.

If you don’t protest the NOPA in time, it becomes final and enforceable. That means the DOR can:

• Garnish your bank account

• Intercept funds from delivery platforms or credit card processors

• File a tax lien against your business or personal property

• Pursue criminal charges if they believe sales tax was knowingly collected but not paid

Why Florida Targets Restaurants for Sales Tax Audits

Restaurants are often a favorite target for sales tax audits in Florida. Why? Because restaurants deal with:

• Large volumes of cash and card transactions

• High employee turnover, which can create recordkeeping issues

• Complex rules for exempt sales, delivery fees, and catering

• Multiple third-party platforms (like Uber Eats) that report income separately

• Frequent underreporting errors—intentional or not

Even honest mistakes can look suspicious if your records are inconsistent. That’s why audits of restaurants are often aggressive and detail-heavy, especially if you’ve had prior issues or received a tip or complaint.

Final Thoughts: Don’t Wait Until It’s Too Late

If you’ve received a DR-840 audit notice—or think your restaurant might be at risk—don’t wait until the NOPA stage to take action. The earlier you get help, the more options you have to reduce penalties, correct errors, and protect your business.

A Florida sales tax audit isn’t something you want to face alone, especially in the restaurant industry where things move fast and records can get messy. A tax professional who understands the DOR’s process can help you defend your position, negotiate a better outcome, or even resolve the audit before it becomes a major financial hit.