The Florida Senate

202.36  Departmental powers; hearings; distress warrants; bonds; subpoenas and subpoenas duces tecum.--

(1)  Any person required to pay a tax imposed or administered under this chapter or to make a return who renders a return or makes a payment of a tax with intent to deceive or defraud the government and prevent the government from collecting the amount of taxes imposed or administered by this chapter, or who otherwise fails to comply with this chapter for the taxable period for which any return is made, any tax is paid, or any report is made to the department, may be required by the department to show cause at a time and place to be set by the department, after 10 days' notice in writing requiring the production of such books, records, or papers relating to the business of such person for such tax period as the department requires. The department may require such person or his or her employees to give testimony under oath and answer interrogatories respecting the sale of communications services within this state, the failure to make a true report thereof, or failure to pay the true amount of the tax required to be paid under this chapter. If such person fails to produce such books, records, or papers or to appear and answer questions within the scope of investigation relating to matters concerning taxes to be imposed or administered under this chapter, or fails to allow his or her agents or employees to give testimony, the department may estimate any unpaid deficiencies in taxes to be assessed against such person based on whatever information is available to it and may issue a distress warrant for the collection of such taxes, interest, or penalties estimated by the department to be due and payable; and such assessment shall be deemed prima facie correct. In such cases, the warrant shall be issued to the sheriff of any county in the state where such person owns or possesses any property; and the sheriff shall seize such property as is required to satisfy any such taxes, interest, or penalties and sell such property under the distress warrant in the same manner as property is permitted to be seized and sold under distress warrants issued to secure the payment of delinquent taxes. The department shall also have the right to writ of garnishment to subject any indebtedness due to the delinquent dealer by a third person in any goods, money, chattels, or effects of the delinquent dealer in the hands, possession, or control of the third person in the manner provided by law. The person whose tax return or report is being investigated may by written request to the department require that the hearing be set at a place within the judicial circuit wherein the person's business is located or wherein such person's books and records are kept. If there is jeopardy to the revenue and jeopardy is asserted in or with an assessment, the department shall proceed in the manner specified for jeopardy assessment in s. 213.732

(2)  Whenever it is necessary to ensure compliance with this chapter, the department shall require a cash deposit, bond, or other security as a condition to a person's obtaining or retaining a dealer's certificate of registration under this chapter. The bond must be in such form and amount as the department deems appropriate under the particular circumstances. Any person who fails to produce such cash deposit, bond, or other security may not obtain or retain a dealer's certificate of registration under this chapter. The Department of Legal Affairs may seek an injunction, when requested by the department, to prevent such person from doing business subject to the provisions of this chapter until the cash deposit, bond, or other security is posted with the department. Any security required to be deposited may be sold by the department at public sale if it becomes necessary to do so in order to recover any tax, interest, or penalty due. Notice of such sale may be served personally or by mail upon the person who deposited the security. Mailing the notice to the last known address appearing on the records of the department constitutes adequate service. Any proceeds of the sale exceeding the amount due under this chapter must be returned to the person who deposited the security.

(3)  The department or any person authorized by it in writing is authorized to make and sign assessments, tax warrants, assignments of tax warrants, and satisfaction of tax warrants.

(4)(a)  The department may issue subpoenas or subpoenas duces tecum compelling the attendance and testimony of witnesses and the production of books, records, written materials, and electronically recorded information. Subpoenas must be issued with the written and signed approval of the executive director or his or her designee on written and sworn application by any employee of the department. The application must set forth the reason for the application, the name of the person subpoenaed, the time and place of appearance of the witness, and a description of any books, records, or electronically recorded information to be produced, together with a statement by the applicant that the department has unsuccessfully attempted other reasonable means of securing information and that the testimony of the witness or the written or electronically recorded materials sought in the subpoena are necessary for the collection of taxes, penalty, or interest or the enforcement of the taxes levied or administered under this chapter. A subpoena shall be served in the manner provided by law and by the Florida Rules of Civil Procedure and shall be returnable only during regular business hours and at least 20 calendar days after the date of service of the subpoena. Any subpoena to which this subsection applies must identify the taxpayer to whom the subpoena relates and to whom the records pertain and must provide other information to enable the person subpoenaed to locate the records required under the subpoena. The department shall give notice to the taxpayer to whom the subpoena relates within 3 days after the day on which the service of the subpoena is made. Within 14 days after service of the subpoena, the person to whom the subpoena is directed may serve written objection to the inspection or copying of any of the designated materials. If objection is made, the department may not inspect or copy the materials, except pursuant to an order of the circuit court. If an objection is made, the department may petition any circuit court for an order to comply with the subpoena. The subpoena must contain a written notice of the right to object to the subpoena. Every subpoena served upon the witness or custodian of records must be accompanied by a copy of the provisions of this subsection. If a person refuses to obey a subpoena or subpoena duces tecum, the department may apply to any circuit court of this state to enforce compliance with the subpoena. Witnesses are entitled to be paid a mileage allowance and witness fees as authorized for witnesses in civil cases.

(b)1.  If any subpoena is served on any person who is a third-party recordkeeper and the subpoena requires the production of any portion of the records made or kept of the business transactions or affairs of any person other than the person subpoenaed, notice of the subpoena must be given to any person to whom the records pertain and to the taxpayer to whom the subpoena relates. Such notice must be given within 3 days after the day on which the service on the third-party recordkeeper is made, if the department can at that time identify the person to whom the records pertain. If the person to whom the records pertain cannot be identified at the time of issuance of the subpoena, the third-party recordkeeper shall immediately inform the department of such person's identity, and the department shall give notice to that person within 3 days thereafter. The notice must be accompanied by a copy of the subpoena that has been served and must contain directions for staying compliance with the subpoena under subparagraph (c)2.

2.  The notice is sufficient if, on or before the third day, the notice is delivered in hand to the person entitled to notice or is mailed by certified or registered mail to the last known mailing address of the person, or, in the absence of a last known address, is left with the person subpoenaed.

3.  As used in this subsection, "third-party recordkeeper" means:

a.  Any mutual savings bank, cooperative bank, domestic building and loan association, or other savings institution chartered and supervised as a savings and loan association or similar association under federal or state law; a bank as defined in s. 581 of the Internal Revenue Code; or any credit union within the meaning of s. 501(c)(14)(A) of the Internal Revenue Code.

b.  Any consumer reporting agency as defined under s. 603(f) of the Fair Credit Reporting Act, 15 U.S.C. s. 1681a(f).

c.  Any person extending credit through the use of credit cards or similar devices.

d.  Any broker as defined in s. 3(a)(4) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78c(a)(4).

e.  Any attorney.

f.  Any accountant.

g.  Any barter exchange as defined in s. 6045(c)(3) of the Internal Revenue Code.

h.  Any regulated investment company as defined in s. 851 of the Internal Revenue Code.

4.  This paragraph does not apply to a subpoena served on the person with respect to whose liability the subpoena is issued or an officer or employee of the person; to a subpoena to determine whether or not records of the business transactions or affairs of an identified person have been made or kept; or to a subpoena described in paragraph (f).

(c)1.  Notwithstanding any other law, a person who is entitled to notice of a subpoena under paragraph (b) and the taxpayer to whom the subpoena relates have the right to intervene in any proceeding with respect to the enforcement of the subpoena under paragraph (a).

2.  Notwithstanding any other law, a person who is entitled to notice of a subpoena under paragraph (b) and the taxpayer to whom the subpoena relates have the right to stay compliance with the subpoena if, not later than the 14th day after the day the notice is given in the manner provided in subparagraph (b)2.:

a.  Notice of intent to stay the subpoena is given in writing to the person subpoenaed;

b.  A copy of the notice of intent to stay the subpoena is mailed by registered or certified mail to the person and to the department; and

c.  Suit is filed against the department in the circuit court to stay compliance with the subpoena.

(d)  An examination of any records required to be produced under a subpoena as to which notice is required under paragraph (b) may not be made:

1.  Before the expiration of the 14-day period allowed for the notice of intent to stay under subparagraph (c)2.; or

2.  When the requirements of subparagraph (c)2. have been met, except in accordance with an order issued by the circuit court authorizing examination of the records or with the consent of the person staying compliance.

(e)  Any subpoena issued under paragraph (a) which does not identify the person with respect to whose liability the subpoena is issued may be served only after a proceeding in any circuit court in which the department establishes that:

1.  The subpoena relates to the investigation of a particular person or ascertainable group or class of persons.

2.  There is reasonable basis for believing that the person or group or class of persons may fail or may have failed to comply with any provision of state law.

3.  The information sought to be obtained from the examination of the records and the identity of the person or persons with respect to whose liability the subpoena is issued is not readily available from other sources.

(f)  In the case of a subpoena issued under paragraph (a), the provisions of subparagraph (b)1. and paragraph (c) do not apply if, upon petition by the department, a circuit court determines, on the basis of the facts and circumstances alleged, that there is reasonable cause to believe that the giving of notice may lead to attempts to conceal, destroy, or alter records relevant to the examination, may prevent the communication of information from other persons through intimidation, bribery, or collusion, or may result in flight to avoid prosecution, testifying, or production of records.

(g)1.  Any circuit court has jurisdiction to hear and determine proceedings brought under paragraph (e) or paragraph (f). The determinations required to be made under paragraphs (e) and (f) shall be ex parte and shall be made solely upon the petition and supporting affidavits. An order denying the petition shall be deemed a final order that may be appealed.

2.  Except for cases that the court considers of great importance, any proceeding brought for the enforcement of any subpoena or any proceeding under this subsection, and any appeal therefrom, takes precedence on the docket over all cases and shall be assigned for hearing and decided at the earliest practicable date.

(h)  The department shall by rule establish the rates and conditions for payments to reimburse reasonably necessary costs directly incurred by third-party recordkeepers in searching for, reproducing, or transporting books, papers, records, or other data required to be produced by subpoena upon request of the department. The reimbursement shall be in addition to any mileage allowance and fees paid under paragraph (a).

(i)1.  Except as provided in subparagraph 2., an action initiated in circuit court under this subsection must be filed in the circuit court in the county where:

a.  The taxpayer to whom the subpoena relates resides or maintains his or her principal commercial domicile in this state;

b.  The person subpoenaed resides or maintains his or her principal commercial domicile in this state; or

c.  The person to whom the records pertain resides or maintains his or her principal commercial domicile in this state.

2.  Venue in an action initiated in circuit court under this subsection by a person who is not a resident of this state or does not maintain a commercial domicile in this state rests in Leon County.

3.  Venue in an action initiated in circuit court pursuant to paragraph (e) rests in the Second Judicial Circuit Court in and for Leon County.

History.--ss. 28, 58, ch. 2000-260; s. 38, ch. 2001-140.