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jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 2995
Experience:  I've prepared all types of taxes since 1987.
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I started an audio visual sales and installation company in

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I started an audio visual sales and installation company in Florida last November, 2008. I never applied for sales tax certificate. No one ever told me I had too. I have never charged any of my clients sales tax, but now some of my Clients are asking me to put it on my invoices because it helps them when they get audited. So how do I register for a sales tax number now if I've already been in business for a year and have done about $130,000 in sales. Most of it could be considered taxable, but the rest wouldn't be. I'm scared that if I don't register then my business will never be legit. I'm a straight shooter and don't want any trouble. I really don't want to have to pay about $10,000 in back taxes if I don't have to. What can I do??
Submitted: 4 years ago.
Category: Tax
Expert:  jgordosea replied 4 years ago.

Greetings,

 

You can either:

1) wait for the Department of Revenue to audit you and be subject to the additional tax, penalty and interest on the amount you did owe but did not pay, or

2) you can voluntarily come forward and pay the tax but not be subject to any penalty if you can qualify (and from what you have said so far, you may) as described at http://dor.myflorida.com/dor/forms/2009/gt800053.pdf

 

"Who is eligible?

Anyone who has any tax liability for a tax administered by the Florida Department of Revenue and who has not been previously contacted by the Department concerning the liability.

Disclosures relating to delinquencies or deficiencies that are obvious and would routinely generate a billing if not otherwise self-disclosed are not eligible for the program."

 

If, indeed, you were subject to the tax and have failed to pay the tax there is not any option for amnesty for you to not have to pay the tax due.

 

You should be prepared to determine what was, and was not, subject to sales tax before you submit the Voluntary Disclosure of Tax Liability to the Departmnent of Revenue. Sales tax requirements to collect and pay depend on the particular facts and circumstances of the transactions. For example, Florida sales tax rules can allow you to not collect sales tax so long as you paid all of the sales or use tax on the materials for improvements of residential property.

 

You should consider using an experienced tax practitioner to assist you with the determination prior to filing for voluntary compliance if you are not able to make the determination for yourself.

 

I hope this helps you to know there is an option to avoid penalty even though you likely did not want to hear that there is not an option to avoid paying the tax that is due in your circumstances.

 

Best wishes.

Customer: replied 4 years ago.
Thank you for responding! I wonder if you can help me on this front first....I was also considering opening a DBA under my business name and registering that for the Florida sales tax certificate. If I did that, would they potentially look back at the corporation ownership and review income for possible taxation? Or would the DBA give them sort of a clean slate to start from, eventhough my current corp would be doing the business under my current FEIN number anyway? Could I possibly start a new corp and dissolve my current one? I'd like to know all of my options before I submit for back taxes.
Thanks so much!
Expert:  jgordosea replied 4 years ago.

Hello again,

 

You are quite welcome.

 

Using a fictitous name such as a DBA does not change the underlying liability of the business. The corproation will still be liable whether under the existing or a new name.

 

Indeed, you could form another entity and dissolve the current one; but that will not change any liability of the former entity either. Some benefit might incur from separating the prior and current liabilities. On the other hand, such action could be portrayed or viewed as an attempt to evade the tax due. Potential criminal penalties arise for evasion.

You will get much better treatment from teh government agencies with voluntary compliance than with any action that could be portrayed as contrary to seeking full compliance.

 

The best way for you to know all of your options is to have a face to face conference with a tax attorney or enrolled agent to evaluate your particular facts and circumstances.

You can use Find an Enrolled Agent - portal.naeacentral.org to search by location and specialty.

 

I hope this helps as you consider your options.

 

jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 2995
Experience: I've prepared all types of taxes since 1987.
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