Florida Administrative Code › 12 - DEPARTMENT OF REVENUE › 12 - Departmental › Chapter 12-13 - COMPROMISE AND SETTLEMENT › Section 12-13.005 - Grounds for Finding Doubt as to Liability

Current through Reg. 50, No. 138; July 16, 2024
(1) The Executive Director or the Executive
				Director's designee, as enumerated in Rule
				12-13.004, F.A.C., shall make a
				determination whether there is doubt as to liability for tax or interest based
				on all the facts and circumstances of the specific case. Doubt as to liability
				is indicated when there is reasonable doubt whether an action is required in
				view of conflicting rulings, decisions, or ambiguities in the law, and the
				taxpayer has exercised ordinary care and prudence in attempting to comply with
				the revenue laws of this state.
(2)
				Reasonable reliance upon the express terms of a written determination by the
				Department is one basis for doubt as to liability.
(a) For purposes of establishing doubt as to
				liability, a written determination shall be deemed issued by the Department
				under the following circumstances:
1. Audit
				workpapers from a prior audit of the same taxpayer clearly show that the same
				issue was considered in the course of the audit and that, after such
				consideration, the Department's auditor determined that no assessment was
				appropriate in regard to that issue. Audit workpapers that fail to assess tax
				based on a particular issue are not a written determination in regard to that
				issue unless those workpapers clearly demonstrate that the auditor was aware of
				the issue and determined that no assessment was appropriate in regard to that
				issue. Failure by an auditor to recognize an issue and assess tax in the audit
				workpapers is not a basis for doubt as to liability based on a written
				determination by the Department.
a. Audit
				workpapers include all correspondence, notices, file memoranda, schedules,
				exhibits, or other documents an auditor generates, receives from the taxpayer,
				or reviews in the course of conducting an audit.
b. If an auditor submits a request for
				technical advice and an internal technical advisement is issued in response to
				that request, the internal technical advisement is part of the audit workpapers
				and will be considered a written determination of the Department as to that
				issue.
c. A written communication
				from the auditor to the taxpayer in the course of the audit that discusses an
				issue upon which no assessment is made will demonstrate that the issue was
				considered by the auditor.
d. If an
				auditor issues a notice of intent to make audit changes that includes an
				assessment on an issue and subsequently issues a revised notice of intent to
				make audit changes that removes the assessment on that issue, that revision and
				any written explanation the auditor prepares in regard to that revision
				establishes that the auditor determined that the taxpayer was not subject to
				assessment as to that issue.
e.
				Correspondence from the taxpayer to the auditor that discusses an issue upon
				which no assessment is made will demonstrate that the issue was considered by
				the auditor if the requirements of this sub-subparagraph are met. There must be
				documentation of the auditor's receipt of the correspondence, such as the
				auditor's signature on a receipt or a copy of the correspondence, if it is hand
				delivered, or a return receipt for registered or certified mail. Correspondence
				from the taxpayer will establish that the auditor considered an issue only if
				such correspondence is dated sufficiently prior to the auditor's issuance of a
				notice of intent to make audit changes or a revised notice of intent to make
				audit changes to permit the auditor to investigate the issue and make a
				determination prior to issuing the notice. Correspondence from a taxpayer
				calling an issue to the auditor's attention will not have the effect of
				establishing that the auditor considered the issue if that correspondence is
				delivered to the auditor after the auditor has substantially completed the
				auditor's review of the taxpayer's books and records, unless the taxpayer
				agrees to a reasonable extension of the time in which the auditor must complete
				the audit under the applicable statute of limitations.