By: Matthew O’Kane
If the Florida Department of Revenue (FDR) determines that a business owner has failed to pay tax in a timely manner, it will assess the business owner and the tax plus interest and penalties in most circumstances. The penalties can be as much as 50% of the tax. If no tax return has been filed, the FDR may assess tax, interest and penalties against the business owner from when the compliance problem began. We have represented business owners who have had assessments issued going back more than 15 years. On account of the potential liability issues, some business owners who discover a compliance problem (not paying use tax on internet purchases, not paying or collecting sales tax on commercial lease payment, etc.) are not willing to address the issue. However, the FDR does offer relief if the business owner discloses the problem before the FDR contacts the business owner.
For business owners who discover a compliance issue, the FDR’s voluntary disclosure program allows the business owner to voluntarily report previously undisclosed tax liabilities without being penalized. If the business owner pays the tax and interest, the FDR will waive the penalties. As part of the disclosure, the FDR only requires the business owner’s disclosure to cover the last three years rather than going back to when the noncompliance started. All taxes administered by the FDR are eligible to be part of the voluntary disclosure program. A business owner must apply to the FDR for relief. Not all business owners are eligible. If a business owner has been previously contacted by the FDR about the noncompliance, the business owner is not eligible. Also, certain obvious delinquencies or routine billing issues are not eligible for the program.
