Appeal from the State of Florida, Department of Revenue.
Lower Tribunal No. AUDIT# 200199515, BPN:0003398990
& Company, Joseph A. DiRuzzo, III, and Daniel M. Lader (Fort
Lauderdale), for appellant.
Moody, Attorney General, and Randi E. Dincher, Assistant
Attorney General, (Tallahassee), for appellee.
LINDSEY, HENDON and GORDO, JJ.
case is a direct appeal pursuant to Florida Statutes section
120.68 from a "Notice of Decision" issued on
November 16, 2018, by the Florida Department of
Revenue (the "Department") following the
Departments audit of Appellant, A & S Entertainment, LLC
("A & S"). The Notice of Decision informed A & S
that it owed the State of Florida sales and use tax,
penalties and accrued interest totaling $1,925,953.17. A & S
argues in this appeal that the Department denied it
procedural due process throughout the course of the audit
because the Department prepared its tax assessment without
considering certain unverified documents untimely submitted
by A & S. A & S further contends that the Department
misapplied the law in categorizing certain fees as taxable
income. As we conclude the Department afforded A & S
procedural due process and properly applied the law during
its audit, we affirm.
FACTUAL & PROCEDURAL BACKGROUND
A & S
is a company that owns and operates adult entertainment
establishments. In February of 2016, the Department issued A
& S a "Notice of Intent to Audit Books and Records"
and commenced an audit of its sales tax liability, for the
time period of January 1, 2013, through December 31, 2015.
The initial notice advised A & S of the audit commencement
date and included an itemized list of required documentation.
Throughout the pendency of the audit, the Department sent
numerous correspondences to A & S, requesting federal income
tax records, bank statements and other information, in order
to assess A & Ss outstanding sales taxes. The Departments
auditor made written requests for specific documentation on
April 7, 2016; May 13, 2016; July 19, 2016; October 17, 2016;
November 10, 2016; December 14, 2016; December 23, 2016;
January 4, 2017; January 17, 2017; and January 30, 2017.
the first field visit, A & Ss accountant and corporate
representative advised the auditor that he was recently hired
and was not in possession of the financial records evidencing
and supporting the tax returns for the audit period. From
April of 2016 to August of 2016, the auditor attempted to
meet with A & Ss corporate representative an additional five
times. The representative cancelled each meeting, stating
that he was unavailable or did not have the requisite
documents. By the time the auditor and corporate
representative finally met at the end of August of 2016, the
corporate representative was still not in possession of the
A & S
failed to provide verifiable bank statements, cash register
tapes, cancelled checks, an amended federal tax return for
2013 and filed federal tax returns for 2014 and 2015. On
appeal, A & S concedes the records it provided to the
Department were incomplete. Further, A & S casts doubt on the
accuracy of even the ...