Verifying Business Account Status
Buying an Existing Business
Before buying an existing business, the purchaser should ask the seller for documentation of any tax, penalty, or interest due to the Florida Department of Revenue, since
the purchaser could be liable for what is owed in relation to the business. The purchaser can withhold enough of the purchase money to cover the liability until the seller
pays the amount due. While the sale is pending, the purchaser should have the seller hold an amount in escrow equal to any potential liability.
The seller can ask the Department for a Certificate of Compliance as proof the Department has not issued a Notice of
Intent to Audit Books and Records and there are no outstanding liabilities on their account. The seller can provide this certificate to the purchaser as proof of good
standing when selling a business or business interest.
Applying for Federal Grants or Loans
A taxpayer can also request a Tax Clearance Letter (status of account) to be used when applying for certain federal grants or loans. While this letter provides the status
of an account, it does not exempt the business from future audits that may cover periods before the business was sold.
Important Notice
Both the Certificate of Compliance and the Tax Clearance Letter represent a point in time and show that the taxpayer does not currently
have outstanding audit assessment notices, tax delinquencies and/or bills. If a significant amount of time lapses between issuance of the certificate and the sale, a new
certificate may be requested.
How to Request a Tax Clearance Letter or Certificate of Compliance
Pursuant to Section 213.053, Florida Statutes, information received by the Florida Department of Revenue is confidential and can only be released with proper
written authorization. You can apply online for a
Request for Tax Clearance Letter or Certificate of
Compliance. The requester's name must be listed on the
Florida Department of State - Division of Corporations showing their association with the
company or they must have a Power of Attorney and Declaration of Representative
(Form DR-835
) on file with the Department.
If you prefer to file a hardcopy request, the request must include all of the following information to prevent denial:
- Requester name (including signature), telephone number, fax number, email address, and a copy of the requester's driver’s license or identification
card. The picture ID must be readable, or processing may be delayed.
- Business name and address, and an identification number such as Business Partner Number, Federal Employer Identification Number, etc.
- A properly executed Power of Attorney and Declaration of Representative
(Form DR-835
), if you want a qualified party to represent you.
You may fax your request to 850-922-5254 or mail it to:
Florida Department of Revenue
PO Box 8045
Tallahassee, Florida 32314-8045
Note: When the Department responds to an inquiry via email that includes confidential information such as tax numbers or SSNs, the email will
be sent using the Department’s secure email software, Microsoft Outlook message encryption (OME). Microsoft OME requires you to establish a Microsoft Live
account associated with your email address. You may need to turn off spam blocking tools and/or change security options to receive secure emails from the
Department.
The standard time frame for processing is 7-10 business days from the date the Department receives your request.
How to Request a Transferee Liability Audit
When a business or stock of goods is sold, the unpaid sales tax liability (if any) of the former owner may transfer to the purchaser, unless the Florida Department of Revenue
issues a Certificate of Compliance or conducts a transferee liability audit. Either the buyer or the seller can request the audit:
- The seller can submit the Seller's Application for Transferee Liability Certificate
(Form DR-842
);
- The purchaser can submit the Purchaser's Application for Transferee Liability Certificate
(Form DR-843
), along with a signed sales agreement included with the request.
Because tax information is confidential, the Department will provide only the seller with the audit results and transferee liability certificate.
Who conducts the audit?
Generally, the Florida Department of Revenue conducts the audit. However, for sales tax, you can hire a Certified Public Accountant (CPA) who is qualified to
conduct sales and use tax audits for the Department.
Florida Department of Revenue Audit: If you want the Department to conduct the audit, send the completed Seller's
Application for Transferee Liability Certificate (Form DR-842 ) or Purchaser's Application for Transferee
Liability Certificate (Form DR-843
) and signed sales agreement to:
Florida Department of Revenue
PO Box 5139
Tallahassee FL 32314-5139
Hiring a CPA: For sales tax audits, you can hire a qualified CPA to conduct your transferee liability audit. Qualified CPA practitioners are certified in
sales and use tax through the Certified Audit Program (Form GT-800065 ).
The Florida Institute of Certified Public
Accountants maintains a list of CPA practitioners who are certified to conduct sales and use tax audits for the Department. When you select a CPA, he or she will tell you what
information is needed to conduct the audit. You are responsible for paying the fee to the auditor you select.
When the audit is complete, the Department will notify the current owner of the business of tax, penalty and interest due (if any). If there is a delay in the sale of the
business, you may request a Certificate of Compliance for the periods not covered by the audit.
Note: Sales tax is the only tax for which a certified audit may be completed.
For More Information
For more information about certificates of compliance or tax clearance letters, contact your local service center or call the Department's Taxpayer Assistance at 850-488-6800 Monday-Friday, excluding holidays.
If you have general questions about transferee liability audits, contact the Department's Case Processing Section at 850-617-8565 or email
RevProcs@floridarevenue.com.
If you have questions about the Certified Audit Program, call the Department's Certified Audit Section at 850-617-8578, or the Florida Institute of Certified Public
Accountants (FICPA) at 800-342-3197. Visit the FICPA's website for more information on the Certified Audit Program and the list of qualified CPA Practitioners.
