We have been advised that the Florida Department of Revenue has established a unit which focuses on detecting SUTA-dumping. This unit is identifying situations in which employees have transferred from one employer account to another, but neither employer has provided the Department with an explanation or a notification of the sale or transfer of business. The Department is reviewing all such occurrences going back to 2006.
When the Department identifies an unreported and questionable transfer of employees, a “Common Ownership Notice” is sent to the employer which gained the employees/payroll. Click here for an example of this letter and the questionnaire which accompanies it.
Importantly, the Department takes the position that common ownership, management, or control existed between the two employers (even though this may not be correct), in which case a transfer of unemployment experience is required by law. Any employer receiving the “Common Ownership Notice” has twenty days to respond, and to establish that no common ownership, management, or control existed between the two parties. If a timely response is not submitted, the notice states that a transfer of unemployment experience will be completed, the tax rate will be recalculated, and the revised tax rate will take effect at the beginning of the next calendar quarter.
If you receive a Common Ownership Notice please contact Josh Kendall at Thomas & Thorngren, Inc. for assistance in responding to the Florida Department of Revenue. Failure to submit a response within the twenty-day protest period could cause a substantial and unnecessary increase in your tax rate.
If there are any questions please do not hesitate to contact me.