Category Archives: criminal tax law

Receiving notice of an impending Florida sales tax audit can be daunting, but understanding the process and taking the right steps can help you navigate it successfully. Surviving a Florida sales tax audit requires careful preparation and professional assistance. Here's a comprehensive guide to help you navigate the process:

Understanding the Audit Process

A Florida sales tax audit is typically triggered when a business's exempt sales ratio is out of line with industry norms, or through random selection. The Florida Department of Revenue (DOR) will investigate potential violations of Florida tax law, focusing on whether your business failed to remit all collected sales tax.

Notification and Preparation

The DOR initiates the audit process by issuing form DR-840, a Notice of Intent to Audit Books and Records. This notice will indicate that the audit will commence 0 days from the issue date, although it cannot begin earlier than 60 days after the notice date.

Key steps upon receiving the notice:

1. Hire an experienced tax professional immediately.
2. Use the 60-day "homework" period to prepare for the audit.
3. Organize all relevant documentation to present a clear picture of your business's tax compliance.

Types of Audits

The DOR conducts two types of sales tax audits:

1. Desk Audit: Conducted at a DOR office.
2. Field Audit: Performed at your place of business.

What to Expect During the Audit

The auditor will compare your annual federal tax return to sales and use tax returns to identify any discrepancies. They will examine:

• Fixed assets and commercial rent (subject to sales tax)
• Sample months to test exempt sales
• Federal income tax returns
• Florida tax returns  
• General ledgers and journals
• Depreciation  schedules 
• Property records 
• Cash receipt and disbursement journals
• Purchase and sales journals
• Sales tax exemption or resale certificates 
• Documentation to verify amounts entered on tax returns

Post-Audit Process

After reviewing all records, the auditor will issue a DR-5 (Notice of Intent to Make Audit Changes). You have 0 days to request a review of the results.

 

Tips for Surviving the Audit

1. Hire a professional: An experienced tax professional can help navigate the complex audit process and minimize potential assessments.
2. Be prepared: Organize all relevant documentation before the audit begins.
3. Understand your rights: The DOR cannot force you to begin the process or turn over information in less than 60 days.
4. Be cautious: While auditors may seem helpful, remember they are not your friends. Avoid inviting them to your workplace unnecessarily or giving them access to electronic records beyond the scope of the audit.
5. Know the timeline: The DOR can typically audit a business for a three-year period, or longer if you didn't file returns or filed substantially incorrect returns.

Remember, a Florida sales tax audit can range from a minor inconvenience to a serious issue with potentially grave consequences. With proper preparation and professional guidance, you can navigate this process successfully and minimize any potential negative outcomes.

Have a  Florida Sales Tax Problem?

Sales Tax Problems Require

an Experienced Sales Tax Attorney

Contact the Tax Lawyers at

Marini & Associates, P.A.

 for a FREE Tax Consultation Contact US at

www.TaxAid.com or www.OVDPLaw.com

or Toll Free at 888-8TaxAid (888 882-9243)

James P. Sweeney Esq - State and Local tax counsel

Mr. Sweeney is a Tax Attorney with 40 years of experience in the areas of Tax Law, both Federal & State, including Representation before the IRS and various State Taxing Agencies.

Mr. Sweeney is an accomplished attorney with a distinguished career that includes a rich background in tax law and a remarkable tenure at Arthur Andersen's State and Local Tax Practice, including serving as the Northeast Region Practice Leader and a National Office subject matter expert, where he shared a wealth of experience and expertise in State and Local Tax law.

 

 

 

Read more at: Tax Times blog

The IRS changed its internal rules regarding digital signatures on documents during the COVID-19 pandemic. The Internal Revenue Manual (IRM) was temporarily updated so that IRS employees could accept digital signatures and signature images instead of handwritten signatures on certain tax forms and in compliance interactions with tax professionals.

IRM Exhibit 10.10.1-1 contains a list of signature types that can be used for specific forms.

The IRS has also extended, to October 31, 2025, its Interim Guidance allowing tax practitioners to use encrypted email when working with IRS personnel to address compliance or resolve issues in ongoing or follow-up interactions.

The forms to which this flexibility applies are listed below. These forms must be signed and postmarked on August 28, 2020, or later. Electronic and digital signatures appear in many forms when printed and may be created by many different technologies. No specific technology is required for these forms.

• Form 11-C, Occupational Tax and Registration Return for Wagering.

• Form 637, Application for Registration (For Certain Excise Tax Activities).

• Form 706, U.S. Estate Tax Return.

• Form 706-A, United States Additional Estate Tax Return.

• Form 706-GS (D), Generation-Skipping Transfer Tax Return for Distributions.

• Form 706-GS (D-1), Notification of Distribution from a Generation-Skipping Trust.

• Form 706-GS (T), Generation-Skipping Transfer Tax Return for Terminations.

• Form 706-QDT, U.S. Estate Tax Return for Qualified Domestic Trusts.

• Form 706 SCHEDULE R-1, Generation-Skipping Transfer Tax.

• Form 706-NA, U.S. Estate (and Generation-Skipping Transfer) Tax Return.

• Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

• Form 730, Monthly Tax Return for Wagers.

• Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

• Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

• Form 1120-C, U.S. Income Tax Return for Cooperative Associations.

• Form 1120-FSC, U.S. Income Tax Return of a Foreign Sales Corporation.

• Form 1120-H, U.S. Income Tax Return for Homeowners Associations.

• Form 1120-IC DISC, Interest Charge Domestic International Sales – Corporation Return.

• Form 1120-L, U.S. Life Insurance Company Income Tax Return.

• Form 1120-ND, Return for Nuclear Decommissioning Funds and Certain Related Persons.

• Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return.

• Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts.

• Form 1120-RIC, U.S. Income Tax Return for Regulated Investment Companies.

• Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B).

• Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship.

• Form 1128, Application to Adopt, Change or Retain a Tax Year.

• Form 2678, Employer/Payer Appointment of Agent.

• Form 3115, Application for Change in Accounting Method.

• Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.

• Form 3520-A, Annual Return of Foreign Trust with a U.S. Owner.

• Form 4421, Declaration – Executor’s Commissions and Attorney’s Fees.

• Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes.

• Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues.

• Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues.

• Form 8038-GC; Information Return for Small Tax-Exempt Governmental Bond Issues, Leases, and Installment Sales.

• Form 8283, Noncash Charitable Contributions.

• Form 8453 series, Form 8878 series, and Form 8879 series regarding IRS e-file Signature Authorization Forms.

• Form 8802, Application for United States Residency Certification.

• Form 8832, Entity Classification Election.

• Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent.

• Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement.

• Elections made pursuant to Internal Revenue Code Section 83(b).

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

On January 24, the 5th Circuit Court of Appeals granted the Department of Labor's (DOL) request to postpone oral arguments in a case challenging the agency's 2024 worker classification rule. This rule, which was set to take effect in March 2024, reinstated the broader "economic realities" test for determining employer-employee relationships, replacing the 2021 rule's narrower interpretation in Frisard’s Transp., LLC v. United States DOL, No. 24-30223, January 24, 2025.

The 2021 rule focused on two "core factors" to determine worker classification: the nature and degree of the worker's control over the work, and the worker's opportunity for profit or loss.

The 2024 rule returned to a multi-factor test considering six factors, all equally important, based on U.S. Supreme Court cases from the 1940s.

The case, Frisard's Transportation, LLC v. United States DOL, was filed on February 8, 2024, in a Louisiana district court. The plaintiffs claim that the 2024 rule oversteps the DOL's statutory authority and threatens the business model of independent contractors.

The DOL's Request To Delay Oral Arguments May 
Signal The New Administration's Intent To Review  
And Potentially Revert To The More
Employer-Friendly 2021 Worker Classification Test.

If the DOL withdraws the 2024 rule and reinstates the 2021 rule, the two primary factors (worker's control and opportunity for profit/loss) would become more significant in determining worker classification, though other factors would still be considered with less weight.

The 5th Circuit Court of Appeals granted the DOL's motion on January 24, 2025, allowing the new leadership at the DOL to review the rule and decide on next steps.

This development highlights the ongoing debate and legal challenges surrounding worker classification rules, which have significant implications for businesses and workers in the gig economy and other industries relying on independent contractors.

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Read more at: Tax Times blog

FINCEN updated its page to state that:

With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies. 

Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. 

FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses. 

Updated Deadlines

• For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.

• Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.

• As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

• For updates on other litigation related to the Corporate Transparency Act and its effect on reporting requirements for certain plaintiffs, see alerts below.

For more information, see FinCEN Notice, FIN-2025-CTA1, FinCEN Extends Beneficial Ownership Information Reporting Deadline by 30 Days; Announces Intention to Revise Reporting Rule (February 18, 2025).

Need Help Filing Your BOI Report?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

Read more at: Tax Times blog