South Carolina Code of Regulations Chapter 117 - DEPARTMENT OF REVENUE
South Carolina Code of Regulations Chapter 117 — Department of Revenue (SCDOR)
1. Overview
Chapter 117 governs the administrative rules for the South Carolina Department of Revenue (SCDOR), which is responsible for administering state tax laws, collecting revenue, and enforcing tax compliance. The Department plays a critical role in implementing tax policy and ensuring proper collection of taxes to fund government services.
2. Key Functions and Authority of SCDOR
a) Tax Administration
Administers the collection of various state taxes, including income, sales, property, and corporate taxes.
Oversees taxpayer registration, filing, and payment processes.
b) Rulemaking
Issues regulations interpreting tax laws to provide guidance to taxpayers and enforce compliance.
Publishes administrative rules on tax procedures, definitions, exemptions, and credits.
c) Audit and Enforcement
Conducts audits and investigations to ensure accurate tax reporting.
Has authority to assess additional taxes, penalties, and interest when noncompliance is found.
d) Appeals and Hearings
Provides processes for taxpayers to dispute assessments or enforcement actions.
Conducts administrative hearings where taxpayers may present evidence and argue their case.
3. Administrative Procedures
a) Filing and Payment Requirements
Taxpayers must file returns and remit taxes timely according to regulations.
The Department may require documentation and information to verify returns.
b) Audit Process
SCDOR selects returns for audit based on risk and compliance criteria.
Auditees receive notice and may provide records or explanations.
c) Assessment and Collection
If discrepancies are found, the Department issues assessments.
Penalties and interest may be imposed for late payments or underreporting.
d) Dispute Resolution
Taxpayers can request administrative hearings.
Hearings provide an opportunity to challenge assessments before an administrative law judge or Board.
Decisions may be appealed to state courts.
4. Relevant Case Law Principles (Illustrative)
a) Substantial Evidence Standard
Courts uphold Department decisions when supported by substantial evidence in the record.
The burden is often on the taxpayer to prove error in assessments.
b) Due Process in Tax Enforcement
Taxpayers are entitled to notice of assessments and an opportunity to be heard.
Failure to provide these procedural rights may result in invalidation of enforcement actions.
c) Interpretation of Tax Regulations
Courts generally defer to SCDOR’s reasonable interpretations of tax laws.
Interpretations must be consistent with statutory language and legislative intent.
d) Penalties and Interest
Penalties must be imposed fairly and in accordance with regulation.
Excessive or arbitrary penalties may be overturned on review.
5. Hypothetical Example
A corporation is audited and found to have underreported taxable income.
SCDOR issues an assessment including additional tax, penalties, and interest.
The corporation requests an administrative hearing challenging the assessment.
After the hearing, the Department upholds the assessment.
The corporation appeals to court, but the court affirms the Department’s decision, finding substantial evidence and proper procedure.
6. Summary Table
| Aspect | Explanation |
|---|---|
| Role | Administers and enforces state tax laws |
| Filing/Audit | Processes tax returns; audits for compliance |
| Assessment | Issues tax assessments and penalties |
| Dispute Resolution | Provides hearings and appeals |
| Judicial Review | Courts defer to Department if supported by evidence and process |
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