Florida Sales Tax Audit Notice (DR-840): What to Do Next

Start with the complete DR-840 package

Form DR-840 identifies the tax types and audit period and starts the Department's pre-audit process. Keep the notice, envelope, tax-records guide, questionnaires, electronic-audit materials, and every other attachment together. Confirm the business name, account, periods, proposed start date, auditor, and contact information before building the response file.

Do not upload the notice, account numbers, returns, customer information, bank records, or other confidential documents through the public website form. A brief description and the printed timing are enough for an initial scope request. Sensitive records should move through the secure document process only after the next step is confirmed.

• Notice date and proposed audit-start date
• Taxes and reporting periods listed
• Auditor name and verified contact information
• Requested-records attachment and any questionnaire
• Prior correspondence, returns, payments, and account changes
• Any deadline or meeting already scheduled

Use the 60-day pre-audit period deliberately

The Florida Department of Revenue's current sales-and-use-tax audit guide says Form DR-840 begins a 60-day notice period. During that period, the Department can answer general process questions and the business can begin gathering the records listed with the notice. The guide says the audit generally begins after the period closes, or sooner if the taxpayer signs and returns the waiver on Form DR-840.

A waiver is not merely an acknowledgment that the notice arrived; it can allow the Department to begin the audit sooner. Before signing, confirm what the form does, how prepared the records are, and whether the business wants professional assistance. Florida law includes limited exceptions to the ordinary advance-notice rule, so the notice and current official guidance control the particular matter.

Organize records by tax type, period, and source

The Department says the requested records depend on the audit. Common records include general ledgers and journals, cash-receipt and disbursement journals, purchase and sales journals, exemption or resale certificates, Florida and federal tax returns, depreciation schedules, property records, and other documentation supporting amounts reported on returns.

A useful audit file reconciles the filed returns to the books and transaction-level records. Separate direct sales from marketplace-facilitated sales; taxable sales from exempt or resale transactions; Florida sales from other jurisdictions; tax collected from tax remitted; and business purchases on which use tax may be at issue. Preserve the original records and document reconciliation adjustments without changing source documents.

• Sales by period, location, channel, product or service, and customer destination
• Invoices, receipts, credit memos, refunds, and shipping or delivery support
• Marketplace statements and payment-processor reports
• Exemption and resale certificates tied to the supported transactions
• Filed DR-15 returns, payment confirmations, and account correspondence
• Purchase invoices, fixed-asset records, and use-tax workpapers
• General ledger, sales journals, bank deposits, and federal-return reconciliation

Understand the entrance interview and Form DR-835

After the 60-day period, or sooner after a signed waiver, the Department's guide describes an audit entrance interview. The taxpayer and auditor discuss the audit plan, business operations, organizational structure, accounting methods, books and records, and next steps.

If the business wants the auditor to discuss the audit with a representative, the Department's guide says Form DR-835, Power of Attorney and Declaration of Representative, is required. Hiring a CPA for return preparation does not automatically authorize audit representation. The engagement, issues, periods, communication responsibilities, and authorization must be accepted and documented before representative contact begins.

Track requests and reconcile the audit record as work proceeds

Florida's audit overview says the auditor will identify the records to provide and set information deadlines. The Department can conduct the review using paper or electronic records. Its current guide says the lookback period is typically three years, but a longer period may apply when returns or payments were not filed or were substantially incorrect.

Keep a request log showing what the Department asked for, the period involved, who is responsible, the response date, what was provided, and any follow-up question. If the facts are agreed but the application of Florida tax law is disputed, the Department describes a Technical Assistance Advisement process; legal or specialized state-tax advice may be appropriate before pursuing a disputed position.

Identify each findings notice and its printed deadline

At the end of the audit, the Department's current guide says it issues a Notice of Intent to Make Audit Changes (Form DR-1215) summarizing the findings. The guide instructs the taxpayer to communicate agreement or disagreement within 30 days of that notice. It also explains that signing Form DR-1215 waives the audit-conference right but does not waive the right to protest.

The guide says the Department generally issues a Notice of Proposed Assessment 30 days after Form DR-1215. Under the current Department publications, the Notice of Proposed Assessment provides instructions for an informal protest within 60 days or a formal protest within 120 days. Confirm the date and instructions printed on the actual notice and obtain legal advice when a formal administrative or court filing is being considered. Do not assume an extension, protest, penalty reduction, or other result will be granted.

What a separately scoped CPA review can cover

An initial call does not create representation or pause a Department deadline. Audit support depends on the jurisdictions, tax types, periods, records, issues, timing, professional-authority requirements, and current capacity. No assessment, penalty relief, protest result, or other agency outcome can be guaranteed.

• Read the complete notice and identify the audit stage, taxes, periods, and immediate dates
• Compare the filed returns with the books, sales records, exemption support, and payments
• Organize requested records and prepare reconciliations or factual explanations
• Help track information requests and responses during the audit
• Communicate with the Department when representation is accepted and properly authorized
• Review proposed adjustments and identify issues that may require state-tax counsel