The Florida Department of Revenue audits businesses to find out whether state taxes were collected, reported, and paid correctly. Although an audit is an
enforcement tool to monitor and evaluate tax compliance, it can also be educational and promote voluntary compliance. During an audit, the Department can help businesses
identify and correct bookkeeping problems that could cause additional tax liabilities.
Audits may not always result in an assessment of additional tax, penalty or interest. The auditor may adjust a credit carryover or correct distribution without assessing
additional tax. The auditor may even determine that a refund is due.
For more information, read What to Expect from a Florida Tax Audit
How Was I Selected for an Audit?
The methods of audit selection vary by tax. Some examples of sources used for audit selection are:
- Internal Revenue Service (IRS) information
- Information sharing programs with other states and state agencies
- Computer-based random selection
- Analysis of Florida tax return information
What Types of Records Will I Need to Provide?
When notified of the Department's intent to audit, you will be informed as to what records you will need to provide. The types of records needed may include, but
are not limited to:
- General ledgers and journals
- Cash receipt and disbursement journals
- Purchase and sales journals
- Sales tax exemption or resale certificates
- Florida tax returns
- Federal tax returns
- Depreciation schedules
- Property records
- Other documentation to verify amounts entered on tax returns
You must keep your records for three years for auditing purposes. The Department may also audit for periods longer than three years if you did not file a return or
payment, or filed a return or payment that was substantially incorrect.
What Are My Rights During an Audit?
The Florida Taxpayer's Bill of Rights (GT-800039 ) included in Section
213.015, Florida Statutes, explains the rights and obligations of the taxpayer and the Department. Your rights include:
- The right to fair and consistent application of tax laws.
- The right to get available information and prompt, accurate responses to your questions.
- The right to have the Department begin and complete its audit in a timely manner following notifications of the intent to audit.
- The right to receive simple, nontechnical statements which explain the reason for audit selection and the procedures, remedies, and rights available during audit, appeals, and collection proceedings.
Communicating and Meeting Deadlines
Throughout the audit process, communication is vital. After the Notice of Intent to Audit Books and Records is issued, the
auditor will work with you to set a date to begin the audit. The auditor will give you deadlines for providing information or documentation. If you need additional time
to prepare, or need to request a delay for other reasons, contact the auditor. The auditor will make every effort to accommodate your requests. If you fail to respond or
provide the requested information, the Department may issue an assessment and file a warrant based on the best available information.
Can I Request Technical Assistance During the Audit?
When an auditor and a taxpayer agree on the facts of an audit case, but disagree on how tax law should be applied to the case, the taxpayer can request an opinion on the
application of law to a specific set of facts. The Department's office of Technical Assistance and Dispute Resolution will issue a Technical Assistance Advisement (TAA),
which is binding on the Department. For more information, read Requesting Advice During an Audit
). The Department's Revenue Law Library can help you research the issue before requesting technical
What Happens When the Audit Is Complete?
After the audit is complete, you may review the audit findings and proposed changes. The auditor will give you a copy of the work papers and
explain your rights, including deadlines for filing protests. If you agree with the audit findings, you are expected to pay the amount due in full, if any. You have
the right to protest the proposed changes if you disagree with them. Additional details are provided through
How to Pay Your Audit Assessment and Notice of Taxpayer Rights
) has more details.
Other Audit-Related Information
Auditing in an Electronic Environment (e-Auditing)
) contains details regarding a computer-assisted audit using electronic records to complete all or
part of the audit. If you use a computer to record your business activity and keep this data electronically, you are eligible for an electronic audit. The Department
prefers to examine electronic records because it is the most accurate and efficient method of conducting an audit.
The Certified Audit Program (GT-800065 ) is a cooperative effort
between the Florida Department of Revenue and the Florida Institute of Certified Public Accountants (FICPA). If you have not received a
Notice of Intent to Audit Books and Records from the Department, you may be eligible to participate. The program gives you the
opportunity to hire a qualified CPA firm to review your sales and use and local option tax compliance. As an incentive, the Department waives penalties and reduces
interest if tax is due.
The Voluntary Disclosure Program allows you to report previously unpaid or underpaid tax liabilities for any tax administered by the Florida
Department of Revenue. Once you have paid the tax and interest, the Department will waive the penalties. If you believe you might owe back taxes and the Department
has not contacted you about the liability, you may be eligible for the Voluntary Disclosure Program.
Tax Clearance Letter, Certificate of Compliance, or Transferee Liability Certificate: When buying a Florida business, the
purchaser should ask the seller for documentation of any tax, penalty, or interest due to the Florida Department of Revenue. A business owner can use a Certificate of
Compliance as proof of good standing with the Department.
Self-audit or self-analysis projects are used to educate taxpayers on issues related to a particular compliance problem or
industry. The Department sends selected taxpayers information about a specific tax or issue, user-friendly instructions, and simple worksheets. The Department asks the
taxpayer to review the materials, complete the worksheets, calculate any additional tax due, and return the paperwork with payment, if needed. The auditor has limited
contact with the taxpayer and does not visit the taxpayer's location. The Department generally accepts the taxpayer’s responses. However, participation in a
self-audit/self-analysis does not exempt the taxpayer from further audit review of the same time period.