Bill Text: FL S0866 | 2013 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Certified Audit Program

Spectrum: Bipartisan Bill

Status: (Failed) 2013-05-03 - Died in Appropriations Subcommittee on Finance and Tax [S0866 Detail]

Download: Florida-2013-S0866-Introduced.html

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       Florida Senate - 2013                                     SB 866
       
       
       
       By Senator Abruzzo
       
       
       
       
       25-00609B-13                                           2013866__
    1                        A bill to be entitled                      
    2         An act relating to the certified audit program;
    3         amending s. 213.21, F.S.; revising the amounts of
    4         interest liability that the Department of Revenue may
    5         abate for taxpayers participating in the certified
    6         audit program; authorizing a taxpayer to participate
    7         in the certified audit program after the department
    8         has issued notice of intent to conduct an audit of the
    9         taxpayer; amending s. 213.285, F.S.; conforming
   10         provisions; revising procedures, deadlines, and notice
   11         requirements for certified audits; authorizing the
   12         department to adopt rules prohibiting a qualified
   13         practitioner from representing a taxpayer in informal
   14         conference procedures under certain circumstances;
   15         amending s. 213.053, F.S.; conforming terminology;
   16         providing an effective date.
   17  
   18  Be It Enacted by the Legislature of the State of Florida:
   19  
   20         Section 1. Subsection (8) of section 213.21, Florida
   21  Statutes, is amended to read:
   22         213.21 Informal conferences; compromises.—
   23         (8) In order to determine whether certified audits are an
   24  effective tool in the overall state tax collection effort, the
   25  executive director of the department or the executive director’s
   26  designee shall settle or compromise penalty liabilities of
   27  taxpayers who participate in the certified audit program audits
   28  project. As further incentive for participating in the program,
   29  the department shall:
   30         (a) For a taxpayer who requests to participate in the
   31  program before the department has issued the taxpayer a written
   32  notice of intent to conduct an audit, abate the first $50,000 of
   33  any interest liability and 50 percent of any interest due in
   34  excess of the first $50,000; or
   35         (b) For a taxpayer who requests to participate in the
   36  program after the department has issued the taxpayer a written
   37  notice of intent to conduct an audit, abate the first $25,000 of
   38  any interest liability and 25 percent of any interest due in
   39  excess of the first $25,000.
   40  
   41  A settlement or compromise of penalties or interest pursuant to
   42  this subsection is shall not be subject to the provisions of
   43  paragraph (3)(a), except for the requirement relating to
   44  confidentiality of records. The department may consider an
   45  additional compromise of tax or interest pursuant to the
   46  provisions of paragraph (3)(a). This subsection does not apply
   47  to any liability related to taxes collected but not remitted to
   48  the department.
   49         Section 2. Section 213.285, Florida Statutes, is amended to
   50  read:
   51         213.285 Certified audits.—
   52         (1) As used in this section, the term:
   53         (a) “Certification program” means an instructional
   54  curriculum, examination, and process for certification,
   55  recertification, and revocation of certification of certified
   56  public accountants which is administered by an independent
   57  provider and which is officially approved by the department to
   58  ensure that a certified public accountant possesses the
   59  necessary skills and abilities to successfully perform an
   60  attestation engagement for tax compliance review in the a
   61  certified audit program audits project.
   62         (b) “Department” means the Department of Revenue.
   63         (c) “Participating taxpayer” means any person subject to
   64  the revenue laws administered by the department who enters into
   65  an engagement with a qualified practitioner for tax compliance
   66  review and who is approved by the department under the certified
   67  audit program audits project.
   68         (d) “Qualified practitioner” means a certified public
   69  accountant who is licensed to practice in Florida and who has
   70  completed the certification program.
   71         (2)(a) The department may is authorized to initiate a
   72  certified audit program audits project to further enhance tax
   73  compliance reviews performed by qualified practitioners and to
   74  encourage taxpayers to hire qualified practitioners at their own
   75  expense to review and report on their tax compliance. The nature
   76  of certified audit work performed by qualified practitioners
   77  shall be agreed-upon procedures in which the department is the
   78  specified user of the resulting report.
   79         (b) As an incentive for taxpayers to incur the costs of a
   80  certified audit, the department shall compromise penalties and
   81  abate interest due on any tax liabilities revealed by the a
   82  certified audit:
   83         1. For a taxpayer who requests to participate in the
   84  certified audit program before the department has issued the
   85  taxpayer a written notice of intent to conduct an audit, as
   86  provided in s. 213.21(8)(a); or
   87         2. For a taxpayer who requests to participate in the
   88  certified audit program after the department has issued the
   89  taxpayer a written notice of intent to conduct an audit, as
   90  provided in s. 213.21(8)(b) 213.21.
   91  
   92  The This authority to compromise penalties or abate interest
   93  under this paragraph does shall not apply to any liability for
   94  taxes that were collected by the participating taxpayer but that
   95  were not remitted to the department.
   96         (3) Any practitioner responsible for planning, directing,
   97  or conducting a certified audit or reporting on a participating
   98  taxpayer’s tax compliance in a certified audit must be a
   99  qualified practitioner. For the purposes of this subsection, a
  100  practitioner is considered responsible for:
  101         (a) “Planning” in a certified audit when performing work
  102  that involves determining the objectives, scope, and methodology
  103  of the certified audit, when establishing criteria to evaluate
  104  matters subject to the review as part of the certified audit,
  105  when gathering information used in planning the certified audit,
  106  or when coordinating the certified audit with the department.
  107         (b) “Directing” in a certified audit when the work involves
  108  supervising the efforts of others who are involved or when
  109  reviewing the work to determine whether it is properly
  110  accomplished and complete.
  111         (c) “Conducting” a certified audit when performing tests
  112  and procedures or field audit work necessary to accomplish the
  113  audit objectives in accordance with applicable standards.
  114         (d) “Reporting” on a participating taxpayer’s tax
  115  compliance in a certified audit when determining report contents
  116  and substance or reviewing reports for technical content and
  117  substance before prior to issuance.
  118         (4)(a) A The qualified practitioner shall notify the
  119  department of an engagement to perform a certified audit and
  120  shall provide the department with the information that the
  121  department deems necessary to identify the taxpayer, to confirm
  122  whether that the taxpayer is not already under audit by the
  123  department, and to establish the basic nature of the taxpayer’s
  124  business and the taxpayer’s potential exposure to the Florida
  125  revenue laws administered by the department. Once the department
  126  has issued a taxpayer a written notice of intent to conduct an
  127  audit, if the taxpayer requests to participate in the certified
  128  audit program, the qualified practitioner or the taxpayer,
  129  within 30 days after the notice of intent to conduct the audit
  130  was issued to the taxpayer, must notify the department of the
  131  engagement to perform the certified audit.
  132         (b) The information provided in the notification must shall
  133  include the taxpayer’s name, federal employer identification
  134  number or social security number, state tax account number,
  135  mailing address, and business location, and the specific taxes
  136  and period proposed to be covered by the engagement for the
  137  certified audit. In addition, the notice must shall include the
  138  name, address, identification number, contact person, email
  139  address, and telephone number of the engaged firm.
  140         (c)(b) Upon the department’s receipt of the engagement If
  141  the taxpayer has not been issued a written notice of intent to
  142  conduct an audit, the taxpayer becomes shall be a participating
  143  taxpayer, and the department shall so advise the qualified
  144  practitioner in writing within 10 days after receipt of the
  145  engagement notice. However, the department may exclude a
  146  taxpayer from a certified audit or may limit the taxes or
  147  periods subject to the certified audit on the basis that the
  148  department has previously conducted an audit or, that it is in
  149  the process of conducting an investigation or other examination
  150  of the taxpayer’s records, or for just cause determined solely
  151  by the department.
  152         (d)(c) Notice of the qualification of a taxpayer for a
  153  certified audit tolls shall toll the statute of limitations
  154  provided in s. 95.091 with respect to the taxpayer for the tax
  155  and periods covered by the engagement.
  156         (e)(d) Within 30 days after receipt of the notice of
  157  qualification from the department, The qualified practitioner
  158  shall contact the department and, within the following periods,
  159  shall submit a proposed audit plan and procedures for review and
  160  agreement by the department:
  161         1. For a taxpayer who requests to participate in the
  162  certified audit program before the department has issued the
  163  taxpayer a written notice of intent to conduct an audit, within
  164  30 days after receipt of the notice of qualification from the
  165  department; or
  166         2. For a taxpayer who requests to participate in the
  167  certified audit program after the department has issued the
  168  taxpayer a written notice of intent to conduct an audit, within
  169  60 days after the department issued the taxpayer the notice of
  170  intent to conduct the audit.
  171  
  172  The department may extend the time for submission of the plan
  173  and procedures for reasonable cause. The qualified practitioner
  174  shall initiate action to advise the department that amendment or
  175  modification of the plan and procedures is necessary in the
  176  event that the qualified practitioner’s inspection reveals that
  177  the taxpayer’s circumstances or exposure to the revenue laws is
  178  substantially different than as described in the engagement
  179  notice.
  180         (f) If the taxpayer has been issued a written notice of
  181  intent to conduct an audit but submits a proposed audit plan and
  182  procedures in accordance with subparagraph (e)2. within 90 days
  183  after the notice of intent was issued to the taxpayer, the
  184  department shall designate the agreed upon procedures to be
  185  followed by the qualified practitioner in the certified audit.
  186         (5) Upon the department’s designation of the agreed-upon
  187  procedures to be followed by the practitioner in the certified
  188  audit, the qualified practitioner shall perform the engagement
  189  and shall timely submit a completed report to the department.
  190  The report must shall affirm completion of the agreed-upon
  191  procedures and shall provide any required disclosures. For a
  192  certified audit completed pursuant to agreed-upon procedures
  193  designated by the department under paragraph (4)(f), the
  194  completed report is considered timely only if submitted to the
  195  department within 285 days after the notice of intent to conduct
  196  the audit was issued to the taxpayer.
  197         (6) The department shall review the report of the certified
  198  audit and shall accept it when it is determined to be complete.
  199  Once the report is accepted by the department, the department
  200  shall issue a notice of proposed assessment reflecting the
  201  determination of any additional liability reflected in the
  202  report and shall provide the taxpayer with all the normal
  203  payment, protest, and appeal rights with respect to the
  204  liability. In cases where the report indicates an overpayment
  205  has been made, the taxpayer shall submit a properly executed
  206  application for refund to the department. Otherwise, the
  207  certified audit report is a final and conclusive determination
  208  with respect to the tax and period covered. An No additional
  209  assessment may not be made by the department for the specific
  210  taxes and period referenced in the report, except upon a showing
  211  of fraud or misrepresentation of material facts and except for
  212  adjustments made under s. 198.16 or s. 220.23. This
  213  determination does shall not prevent the department from
  214  collecting liabilities not covered by the report or from
  215  conducting an audit or investigation and making an assessment
  216  for additional tax, penalty, or interest for any tax or period
  217  not covered by the report.
  218         (7) To implement the certified audit program audits
  219  project, the department may shall have authority to adopt rules
  220  relating to:
  221         (a) The availability of the certification program required
  222  for participation in the certified audit program project;
  223         (b) The requirements and basis for establishing just cause
  224  for approval or rejection of participation by taxpayers;
  225         (c) Procedures for assessment, collection, and payment of
  226  liabilities or refund of overpayments and provisions for
  227  taxpayers to obtain informal and formal review of certified
  228  audit results;
  229         (d) The nature, frequency, and basis for the department’s
  230  review of certified audits conducted by qualified practitioners,
  231  including the requirements for documentation, work-paper
  232  retention and access, and reporting; and
  233         (e) Requirements for conducting certified audits and for
  234  review of agreed-upon procedures; and
  235         (f) Circumstances under which a qualified practitioner who
  236  conducts a certified audit for a taxpayer after the department
  237  has issued the taxpayer a written notice of intent to conduct
  238  the audit is prohibited from representing the taxpayer in
  239  informal conference procedures established pursuant to s.
  240  213.21.
  241         Section 3. Paragraph (m) of subsection (8) of section
  242  213.053, Florida Statutes, is amended to read:
  243         213.053 Confidentiality and information sharing.—
  244         (8) Notwithstanding any other provision of this section,
  245  the department may provide:
  246         (m) Information contained in returns, reports, accounts, or
  247  declarations to the Board of Accountancy in connection with a
  248  disciplinary proceeding conducted pursuant to chapter 473 when
  249  related to a certified public accountant participating in the
  250  certified audit program audits project, or to the court in
  251  connection with a civil proceeding brought by the department
  252  relating to a claim for recovery of taxes due to negligence on
  253  the part of a certified public accountant participating in the
  254  certified audit program audits project. In any judicial
  255  proceeding brought by the department, upon motion for protective
  256  order, the court shall limit disclosure of tax information when
  257  necessary to effectuate the purposes of this section.
  258  
  259  Disclosure of information under this subsection shall be
  260  pursuant to a written agreement between the executive director
  261  and the agency. Such agencies, governmental or nongovernmental,
  262  shall be bound by the same requirements of confidentiality as
  263  the Department of Revenue. Breach of confidentiality is a
  264  misdemeanor of the first degree, punishable as provided by s.
  265  775.082 or s. 775.083.
  266         Section 4. This act shall take effect July 1, 2013.