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Bill 1333

                    Current Status

Bill Number:                      1333
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  20000413
Primary Sponsor:                  Passailaigue
All Sponsors:                     Passailaigue
Drafted Document Number:          l:\council\bills\pt\2013mm00.doc
Companion Bill Number:            4903
Residing Body:                    Senate
Current Committee:                Finance Committee 06 SF
Subject:                          Taxation, Property assessments, 
                                  limitations for; claim for refund resulting 
                                  from adjustment; Businesses, Revenue


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
------  20000418  Companion Bill No. 4903
Senate  20000413  Introduced, read first time,           06 SF
                  referred to Committee


              Versions of This Bill

TO AMEND SECTION 12-54-85, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TIME LIMITATIONS FOR ASSESSMENT OF TAXES OR FEES, SO AS TO DISTINGUISH BETWEEN A TAX AND A PENALTY NOT ASSOCIATED WITH ASSESSMENT OF A TAX AND TO PROVIDE FOR THE DETERMINATION AND ASSESSMENT OF CERTAIN TAXES AND FOR A CLAIM FOR REFUND RESULTING FROM AN ADJUSTMENT BY THE INTERNAL REVENUE SERVICE BEFORE ONE HUNDRED EIGHTY DAYS OF NOTICE OF THE ADJUSTMENT TO THE DEPARTMENT.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 12-54-85(B) and (C) of the 1976 Code, as last amended by Act 86 of 1997, is further amended to read:

"(B) Except as otherwise provided in this section,:

(1) if the a tax, except for a penalty described in item (2), is not required to be remitted with a return or document, the amount of taxes must be determined and assessed within thirty-six months after the later of the date the tax was due or the first date on which any part of the tax was paid; and

(2) a penalty that is not associated with the assessment of a tax must be determined and assessed within thirty-six months after the date of the violation giving rise to the penalty.

(C) Taxes may be determined and assessed after the thirty-six month limitation if:

(1) in the case of income, estate and generation skipping transfer taxes, the taxes are assessed within one hundred eighty days of receiving notice from the Internal Revenue Service of a final determination of a tax adjustment made by the Internal Revenue Service;

(2)(1) there is fraudulent intent to evade the taxes;

(3)(2) the taxpayer failed to file a return or document as required by law;

(4)(3) there is a twenty percent understatement of the total taxes required to be shown on the return or document. The taxes in this case may be assessed at any time within seventy-two months from the date the return or document was filed or due to be filed, whichever is later;

(5)(4) the person liable for any taxes consents in writing, before the expiration of the time prescribed in this section for assessing taxes due, to the assessment of the taxes after the time prescribed by this section."

SECTION 2. Section 12-54-85(D) of the 1976 Code, as last amended by Act 114 of 1999, is further amended to read:

"(D)(1) A corporation shall notify the department in writing of all changes in taxable income reported to the Internal Revenue Service when the taxable income is changed by the Internal Revenue Service. Notification to the department must be made within ninety days after a final determination is received from the Internal Revenue Service. Notification of adjustments made by the Internal Revenue Service must be made under separate cover from a return filed or due to be filed with the department.

Notwithstanding any restrictions on filing a claim for refund provided in subsection (F) below, a corporation may file a claim for refund resulting from an overpayment due to changes in taxable income made by the Internal Revenue Service within ninety days from the date the Internal Revenue Service changes the taxable income. Taxes due to an understatement of taxes resulting from adjustments of the Internal Revenue Service also may be determined and assessed after the thirty-six month limitation if:

(a) except as provided in item (b), in the case of income, estate, and generation skipping transfer taxes, the taxes are assessed before one hundred eighty days after the department receives notice from the taxpayer of a final determination of a tax adjustment made by the Internal Revenue Service; or

(b) in the case of individual income tax returns described in subitem (4)(c) below, the taxes are assessed before one hundred eighty days after the department receives notice of the tax adjustment from the Internal Revenue Service or the taxpayer, whichever occurs first.

(2) A person, including a pass-through entity, who conducts a trade or business, other than a trade or business of being an employee, shall notify the department in writing of all changes in taxable income reported to the Internal Revenue Service when the taxable income is changed by the Internal Revenue Service. Notification to the department must be made before one hundred eighty days after a final determination of a tax adjustment is made by the Internal Revenue Service.

(3) Notwithstanding a restriction on filing a claim for refund provided in subsection (F), a person may file a claim for refund resulting from an overpayment due to changes in taxable income made by the Internal Revenue Service, if the claim for refund is filed no later than one hundred eighty days after the date a final determination of a tax adjustment is made by the Internal Revenue Service. The refund described in this subsection applies only to the overpayment of taxes resulting from adjustments of the Internal Revenue Service.

(4) For the purposes of this subsection (D):

(a) the date the Internal Revenue Service makes a final determination of a tax adjustment is the federal assessment date;

(b) underpayments and overpayments resulting from adjustments of the Internal Revenue Service include both the year for which the adjustments were made and other tax years affected by the adjustments; and

(c) the individual income tax returns referred to in subitem (D)(1)(b) are those individual income tax returns that do not include income, deductions, or credits from a trade or business, other than the trade or business of being an employee."

SECTION 3. This act takes effect upon approval by the Governor.

This web page was last updated on Wednesday, December 9, 2009 at 9:11 A.M.