Florida Proposed Rules

Purpose:   Section 212.12(6)(c), F.S., authorizes the Department to sample certain taxpayer records and to project the sample findings over the tax audit period to project a tax deficiency or tax overpayment based upon the sample findings. This statutory provision requires the Department to prescribe by rule the procedures to be followed for each method of sampling taxpayer records that follow generally accepted auditing procedures, to establish procedures for sampling agreements, and to establish the training required for a taxpayer to employ a sampling method to project a tax overpayment. When in effect, the draft amendments to Rule 12-3.0017, F.A.C., will provide procedures for sampling machine-sensible taxpayer records that are adequate but voluminous for determining tax compliance regarding sales tax, surtax, surcharge, or solid waste fees imposed or administered under Chapter 212, F.S.

The draft amendments to Rule 12-3.0017, F.A.C., are necessary to: (1) update the title to reflect the revisions to the rule; (2) provide that, for purposes of the sampling methods established in the rule, the records must be machine-sensible, adequate, and voluminous; (3) provide definitions for terms used in the rule; (4) provide that when the Department is not able to conduct a statistical sample on taxpayer records, a non-statistical sampling method will be used or the records will be reviewed in detail; (5) provide the procedures for non-statistical sampling of records; (6) provide that the Department uses a stratified statistical sampling method, generally using seven or fewer sample strata for each sampling frame; (7) provide for using a pilot sample to determine the final sample size; (8) provide that a Sampling Agreement will be issued for each sample recorded in an audit exhibit and the elements of the Agreement; (9) provide procedures for conducting a non-statistical sample or a statistical sample; (10) provide the specific requirements for Sampling Agreements regarding the sampling of fixed assets; (11) provide procedures for a taxpayer to request a review of a Sampling Agreement by the Executive Director's designee; (12) provide that an Assignment of Rights is required to include an overpayment of tax in a sample when the tax was not paid directly to the Department; (13) provide procedures for projecting and allocating a non-statistical sample or a statistical sample; (14) provide that the pooled approach is used to calculate the precision of a stratified statistical sample; (15) provide that the additional tax due or a tax overpayment projected from the results of a statistical sample will be apportioned based on the filing frequency of the taxpayer; and (16) remove the unnecessary incorporation by reference of auditor training manuals which contain provisions that do not meet the definition of a "rule."