Posted by: euser
July 19, 2010
Topic: Legal News

Update on Florida Department of Revenue 2010 Tax Amnesty Program

The Department of Revenue has finally posted additional information clarifying its Tax Amnesty Program. These include:

•1) The Tax Amnesty Agreement itself, Form DR-100000

•2) Frequently Asked Questions and Answers

•3) An emergency regulation adopted to implement the program.

To find these forms and documents, go to the Department of Revenue website at www.myflorida.com/DOR. To speak to a Department of Revenue representative call (800) 352-3671. Individuals with hearing or speech impediments may call (800) 367-8331 or (850) 922-1115.

In addition I have had a telephone conversation with different representatives of the department and have received the following oral answers. I emphasis oral because you can not rely, for legal purposes, on oral answers of Agents of the Department of Revenue. In order to obtain a legally binding answer you have to go through a request for technical assistance. However, in light of the short time period this amnesty program will be in effect ( 90 days) that is probably not a practical solution. The answers sound logical, but it has to be emphasized that, from a legal point of view, they may not be reliable and you should not rely upon them without obtaining formal legal advice.

Those questions included:

•1) If the Taxpayer elects to participate in the certified audit program, an option provided in the Tax Amnesty Statute, will the Taxpayer still be exempt from criminal prosecution?

The person with whom I spoke said he did not know the answer and referred me to the certified audit program. I spoke to the coordinator for the certified audit program and he stated that it was his understanding that there would be exemption from prosecutions since participation in the certified audit program would be pursuant to the amnesty provision. There is some value in considering this approach, in that under the certified audit program, penalties are also suspended and there is an avoidance of $25,000.00 of interest right off the top. As noted above, however, his opinion as to whether or not exemption from criminal prosecution would still apply was just that, his opinion. He stated the only way we could get a binding opinion would be to request technical advice from the department.

•2) I asked whether, if the Taxpayer enters into a stipulated payment plan but is unable to complete it, would the Taxpayer not only lose the financial benefits, but also then be subject to criminal charges, assuming the facts supported such charges?

The response I received is that the Taxpayer would not automatically be referred to criminal investigation, but would be referred to the normal collection program. However, after 18 months of collection attempts, if the tax is not paid, then the Taxpayer could be referred to a collections level 12 at which time it could be referred to the criminal investigation division independent of any disclosure made under the amnesty program.

•3) I inquired whether, if a Taxpayer submits amended returns as part of the amnesty application, would he be audited on those returns?

The response was the Taxpayer would not automatically be audited by virtue of participating in the program, but that the Taxpayer might be selected through ordinary random audit selection procedures.

•4) I inquired as to whether or not the Taxpayer could disclose more than three (3) years. I pointed out that the Q& A seems to indicate, in question number 8 (of same), that the amnesty program only goes back three years. The answer I received was confusing.

They stated the Taxpayer could disclose as many years as they wanted to, but the department, by virtue of the statute of limitations, would only look back three years. I pointed out that I was concerned about the possibility that the Department could grant amnesty for three years, but, based upon the three year disclosure, be suspicious that a fraud may have occurred in previous years, and go back to investigate prior years. Both of the individuals I spoke with indicated they do not believe that this would happen because it was not the purpose of the amnesty program to trick people into getting caught into criminal prosecutions. Once again, there is no formal position on that, but it does make practical sense from a policy point of view.

Update on Florida Department of Revenue 2010 Tax Amnesty Program

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