ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This matter comes before the Administrative Law Judge Division (ALJD) pursuant to S.C. Code Ann. § 12-60-470(F) (2000), S.C.
Code Ann. § 12-4-30(D) (2000), and S.C. Code Ann. § 1-23-600 (Supp. 1999). The Petitioner requested a contested case hearing to
seek review of a Final Agency Determination issued by the Respondent, South Carolina Department of Revenue (Department). The
Department denied the Petitioner's claim for a refund of income taxes because the Department determined that the claim for the
refund was not timely filed. After notice to all parties, a hearing was conducted on September 21, 2000 at the ALJD in Columbia,
South Carolina.
FINDINGS OF FACT
Having carefully considered the testimony and the arguments of both sides, and taking into account the credibility of the evidence and
witnesses, I find by a preponderance of the evidence:
1. Notice of the time, date, place and subject matter of the hearing was given to all parties in a timely manner.
2. The Petitioner is a resident of South Carolina.
3. The Petitioner did not file his 1994 South Carolina Income Tax Return by the due date, April 15, 1995. Instead, Petitioner filed his
1994 Income Tax Return on April 14, 1999 and claimed a refund of $901.
4. The Department denied the Petitioner's claim for refund on May 18, 1999.
5. From 1995 through 1998, Petitioner suffered from diabetes mellitus, cirrhosis of the liver, and severe encephalopathy. The
encephalophathy caused the Petitioner to be very disoriented so that he could not conduct his usual activities. In May 1998, Petitioner
received a liver transplant and his condition improved considerably.
6. Petitioner asserts that he was mentally and physically unable to timely file his 1994 Income Tax Return and, therefore, he should be
entitled to the refund.
CONCLUSIONS OF LAW
Based upon the above Findings of Fact, I conclude, as a matter of law, the following:
1. The ALJD has subject matter jurisdiction over this action pursuant to S.C. Code Ann. § 12-60-470(F) (2000), S.C. Code Ann. § 12-4-30(D) (2000), and S.C. Code Ann. § 1-23-600 (Supp. 1999).
2. The right to recover taxes from the State of South Carolina was created by statute. C.W. Matthews Contracting Co., Inc. v. S.C.
Tax Comm'n, 267 S.C. 548, 230 S.E.2d 223 (1976).
3. There are two possible tax refund statutes that are available to the Petitioner.
4. S.C. Code Ann. § 12-47-440 (Supp. 1994) was in effect during the 1994 tax year. This statute provides that an application for a
refund must be made "in writing to the department within three years from the date the tax or fee was due to have been paid."
Petitioner's 1994 income tax refund was due to have been paid on April 15, 1995. Therefore, Petitioner had until April 15, 1998 to
claim the refund. Petitioner did not file for the refund until April 15, 1999 which was one year beyond the three year time limitation
set forth in S.C. Code Ann. § 12-47-440 (Supp. 1994).
5. When the Petitioner filed for his 1994 income tax refund on April 15, 1999, S.C. Code § 12-47-440 had been repealed and S.C.
Code Ann. § 12-60-470 (Supp. 1999) was enacted in its place. S.C. Code Ann. § 12-60-470 (Supp. 1999) provides that a "taxpayer
may seek a refund of any state tax by filing a written claim for refund with the department. A claim for refund is timely filed if filed
within the period specified in Section 12-54-85 . . . ." S.C. Code Ann. § 12-54-85(F)(1) (Supp. 1999) states that:
claims for credit or refund must be filed within three years of the time the timely filed return, including extensions, was filed, or two
years from the date of payment, whichever is later. If no return was filed, a claim for refund must be filed within two years from the
date of payment.
6. If Petitioner had filed a timely return, he would have had three years to file a claim for refund. However, Petitioner did not timely
file a return and, therefore, he only had two years from the date of payment to file for a claim for refund. In the instant case, Petitioner
did not file his 1994 income tax return until April 15, 1999, which is four years from the date of payment.
7. Petitioner does not meet the time limitations set forth in either S.C. Code Ann. § 12-47-440 (Supp. 1994) or S.C. Code Ann. § 12-54-85(F)(1) (Supp. 1999) and there are no exceptions to these statutes. This result may be harsh, but the right to apply for a refund is
purely statutory, and it is incumbent upon those seeking relief to proceed according to the statute affording such relief.
Commonwealth of Virginia v. Cross, 196 Va. 375, 83 S.E.2d 722 (1954).
8. In U.S. v. Brockamp, 519 U.S. 347 (1997), the United States Supreme Court refused to allow equitable exceptions to the Internal
Revenue Code refund provisions. The Supreme Court recognized the problems government would encounter if there were equitable
exceptions to statutorily mandated time limits for requesting refunds of erroneously paid or assessed taxes. The Supreme Court
stated:
To read an "equitable tolling" exception . . . could create serious administrative problems by forcing the IRS to respond to, and
perhaps litigate, large numbers of late claims, accompanied by requests for "equitable tolling" which, upon close inspection, might
turn out to lack sufficient equitable justification. The nature and potential magnitude of the administrative problem suggest that
Congress decided to pay the price of occasional unfairness in individual cases (penalizing a taxpayer whose claim is unavoidably
delayed) in order to maintain a more workable tax enforcement system. At the least it tells us that Congress would likely have wanted
to decide explicitly whether, or just where and when, to expand the statute's limitations periods, rather than delegate to the courts a
generalized power to do so wherever a court concludes that equity so requires.
Id. at 352. While this situation is unfortunate for the Petitioner and this tribunal takes no joy in its decision, the State must be able to
carry out its duties and bring closure to these matters.
ORDER
IT IS THEREFORE ORDERED that Petitioner's request for a refund of $901 is denied.
AND IT IS SO ORDERED.
______________________________________
C. Dukes Scott
Administrative Law Judge
Columbia, South Carolina
November 1, 2000
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