The purpose of these amendments is to update rules related to certified audits for consistency with administrative procedures, current statutory requirements for incorporation of materials, and to remove obsolete references. The effect of the ...

 

DEPARTMENT OF REVENUE

RULE NO.:RULE TITLE:

12-25.031Definitions

12-25.033Eligibility and Qualifications

12-25.035Responsibility for Program Training, Certification Procedures, and Program Availability

12-25.037Applying for Participation in the Program

12-25.047Development of Agreed Upon Procedures

12-25.048Submission of the Certified Audit Report

PURPOSE AND EFFECT: The purpose of these amendments is to update rules related to certified audits for consistency with administrative procedures, current statutory requirements for incorporation of materials, and to remove obsolete references. The effect of the amendments is to ensure rules are consistent with current law and procedures, and to remove unnecessary or obsolete provisions.

SUMMARY: The proposed amendments to Rule 12-25.031, F.A.C., make administrative changes to two definitions. The proposed amendments to Rule 12-25.033, F.A.C., remove obsolete provisions and incorporate a referenced material in accordance with statutory requirements. The proposed amendments to Rule 12-25.035, F.A.C., remove obsolete provisions and update the rule with current procedures. The proposed amendments to Rule 12-25.037, F.A.C., incorporate a referenced material in accordance with statutory requirements and remove an unclear provision. The proposed amendments to Rule 12-25.047, F.A.C., remove an unnecessary provision, incorporate a referenced material in accordance with statutory requirements, and provide a cross-reference for an incorporated form. The proposed amendments to Rule 12-25.048, F.A.C., remove an unnecessary provision.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under subsection 120.541(1), F.S.; and 2) based on past experiences regarding rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in paragraph 120.541(2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 213.06(1), 213.285(7), FS.

LAW IMPLEMENTED: 213.285, FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE,TIME AND PLACE SHOWN BELOW(IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: February 27, 2019; 10:00 a.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1221, Tallahassee, Florida

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Danielle Boudreaux at [phone].. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Tammy Miller, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

12-25.031 Definitions.

The following definitions shall apply to this Part:

(1) “Board” means the State of Florida Board of Accountancy, as provided in Chapter 473, F.S.

(2) “Certified Public Accountant” shall have the same meaning as the term is defined in SectionChapter 473.302(4), F.S.

(3) through (11) No change.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended_________.

 

12-25.033 Eligibility and Qualifications.

(1)(a) No change.

(b) Any practitioner employed by the qualified audit firm who performs audit analysis, makes auditing decisions on source documents, taxpayer data or sales transactions, or who performs agreed-upon procedures, except for the gathering of information for the planning work discussed in subparagraphs 12-25.047(1)(b)1., 2., 4., 5., 6. and 7., F.A.C., scheduling, or reconciling, must successfully complete a training course approved by the Department prior to their initial performance of the subject activities. The Department will approve the training, including instructional curriculum and materials, and testing, administered and delivered by the contract provider, if the provider meets all the conditions contained in pages 20 through 23 of the contract required to be established by both parties pursuant to Section 213.285(1), F.S., and Section 4 of Chapter 98-95, Laws of Florida. This contract is adopted and incorporated by reference. However, the Department shall grant a waiver of this requirement for a specific certified audit in circumstances where a practitioner working on the subject audit can not complete his or her work due to a documented medical reason, a documented family emergency, or the practitioner has left the employment of the firm. The training course will, at a minimum, teach the basics of Florida Sales and Use tax law, and will include a required examination. The Department will be the final authority on the content of the training course and the nature, number, and type of questions on the examination. “Successfully complete” means the participant has met all the requirements for the course and achieved a scaled score of 70 percent. Further, any practitioner performing the subject activities shall be supervised by a qualified practitioner. The subject qualified practitioner will be physically on-site where the activities are performed.

(c) through (e) No change.

(2) To be eligible to provide a certified audit service to a taxpayer, the qualified audit firm must be independent with respect to that taxpayer, pursuant to the guidelines established by Form DR-343000, Certified Audit Program Independence Issues, effective XX/XX (http://www.flrules.org/Gateway/reference.asp?No=Ref-_____), Florida Board of Accountancy Advisory Opinions issued on certified audit independence questions, which are hereby adopted and incorporated by reference. The Department will determine if the circumstances and facts of the particular situation are materially the same as situations for which guidelines were previously issued. If the facts and circumstances are unique or if the qualified audit firm believes there are differences between their situation(s) and the situation(s) previously addressed by the Board that were the basis for the Department to deny participation, then the qualified audit firm can request an Advisory Opinion from the Board on the particular situation(s). The Department shall then decide based on the guidelines in the Board’s response to that request and based on General Standard No. 2 (Independence), Generally Accepted Auditing Standards, which are adopted and incorporated by reference. If the qualified audit firm does not agree with the Department’s decision, it can request a Declaratory Statement from the Board, which determination will be final.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended______.

 

12-25.035 Responsibility for Program Training, Certification Procedures, and Program Availability.

(1) The Department or the Florida Institute of Certified Public Accounts (FICPA) will provide the instructional curriculum and materials for the certified audit program and deliver this curriculum in a training context. If the FICPA is responsible for these services, they will receive the Department’s review and approval before distributing materials or performing the training.

(1) Subject to the Department’s supervision and approval, the Florida Institute of Certified Public Accounts (FICPA) shall:

(a) Develop the instructional curriculum and materials for the certified audit program;

(b) Deliver this curriculum in a training context;

(c) Test qualified practitioners and practitioners who have participated in such training; and,

(d) Administer the training and testing process.

(2) Subject to the Department’s supervision and approval, the FICPA will:

(a) Oversee registration of eligible training participants for the certified audit program; and

(b) Test eligible training participants who have participated in such training.

(2) The Department will approve the training, including instructional curriculum and materials, and testing administered and provided by the FICPA, if the FICPA meets all the conditions contained in the contract which must be established by both parties pursuant to Section 213.285(1), F.S., and Section 4 of Chapter 98-95, Laws of Florida.

(3) through (4) No change.

(5) Continuing professional education is required for practitioners and qualified practitioners as part of the training required pursuant to the directives in Section 213.285(1)(a), F.S., and Section 4 of Chapter. 98-95, L.O.F. These laws require the training to be developed and delivered by the FICPA and approved by the Department pursuant to the contract signed by the Department and the FICPA. The Department shall approve the continuing professional education program if it meets all the criteria established in the contract.

(a) Practitioners must complete a continuing professional education program which will not exceed eight hours every two years.

(b) A qualified practitioner must complete a continuing professional education program which will not exceed sixteen hours every two years.

(6) through (8) No change.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended_____.

 

12-25.037 Applying for Participation in the Program.

(1) The following public use form is employed by the Department of Revenue in its dealings with the public, and is hereby incorporated in this rule by reference. Copies of this form are available, without cost, by one or more of the following methods: 1) writing the Florida Department of Revenue, Taxpayer Services, Mail Stop 3-2000, 5050 West Tennessee Street, Tallahassee, Florida 32399-0112; or, 2) visiting any local Department of Revenue Service Center to personally obtain a copy; or, 3) calling the Forms Request Line during regular office hours at [phone]; or, 4) downloading selected forms from the Department’s website at www.floridarevenue.com/forms. Persons with hearing or speech impairments may call the Florida Relay Service at 1(800)955-8770 (Voice) and 1(800)955-8771 (TTY). When a qualified practitioner has a client who agrees to participate in the program, the qualified practitioner must complete a Request to Participate in the Certified Audit program (form DR-342000), which includes a Power of Attorney and Declaration of Representative (form DR-835, incorporated by reference in Rule 12-6.0015, F.A.C.), and submit the Request to Participate, including any required supporting information to the Department.

Form Number	Title	Effective Date
DR-342000	Request to Participate in the Certified Audit Program (N. 8/99) (http://www.flrules.org/Gateway/reference.asp?No=Ref-_____)	XX/XX 8/99

(2) No change.

(3) As a condition of acceptance in the Certified Audit program, a taxpayer will have to sign a statement declaring that he or she agrees to pay the audit assessment within 60 days of:

(a) The date the audit has been agreed to; or

(b) The date the taxpayer’s protest and appeal rights have expired.

However, if the Certified Audit results in the taxpayer entering into a stipulated payment agreement, interest would accrue from the date to which the stipulated payment agreement is mutually agreed. If payment has not been received with the 60 days stipulated, and a stipulated payment agreement has not been entered into, interest will accrue back to the date of the Notice of Proposed Assessment, and continue to accrue through the date of payment in full.

(4) renumbered (3) No change.

(4)(5) A qualified practitioner may submit a written request to the Department for a 15-day extension of the 30-day time period discussed in subsection (3)(4) of this rule. The Department will not accept more than two consecutive written requests for a 15-day extension for the same Request To Participate.

(6)(a) renumbered (5)(a) No change.

(b) Denying the Request to Participate, unless the provisions of subsection (3)(4) apply.

(7) through (9) renumbered (6) through (8) No change.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended_____.

 

12-25.047 Development of Agreed Upon Procedures.

(1)(a) Certified Audits conducted pursuant to the authority of Section 213.285, F.S., are attestation engagements that are conducted under Statements on Standards for Attestation Engagements #4. – Agreed Upon Procedures, which are adopted and incorporated by reference.

(b) Subsequent to the Department’s approval of the Request to Participate, and prior to the qualified practitioner submitting the Audit Plan, the qualified practitioner will perform required planning work. The planning work performed will include:

1. through 5. redesignated (a) through (e) No change.

(f)6. The Form DR-15 Sales and Use Tax Return, incorporated in Rule 12A-1.097, F.A.C., download print-out from the Department’s audit software;

(g)7. Performance of and reporting on steps AP.001 through AP.300 of the Standard Audit Program Form DR-344000, Certified Audit Standard Audit Program, effective XX/XX (http://www.flrules.org/Gateway/reference.asp?No=Ref-_____), which is are adopted and hereby incorporated by reference.

8. redesignated (h) No change.

a. through g. renumbered 1. through 7. No change.

9. through 10. redesignated (i) through (j) No change.

(2) through (5) No change.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended_____.

 

12-25.048 Submission of the Certified Audit Report.

The qualified practitioner will submit the certified audit report and required attachments to the Department for review and approval.

(1) The certified audit report must meet all the requirements established by Statements on Standards for Attestation Engagements #4.

(2) through (5) renumbered (1) through (4) No change.

Rulemaking Authority 213.06(1), 213.285(7) FS. Law Implemented 213.285 FS. History–New 8-23-99, Amended_____.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tammy Miller

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 4, 2018

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: October 24, 2018