South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Anonymous Taxpayers vs. SCDOR

AGENCY:
South Carolina Department of Revenue

PARTIES:
Petitioners:
Anonymous Taxpayers

Respondents:
South Carolina Department of Revenue
 
DOCKET NUMBER:
00-ALJ-17-0235-CC

APPEARANCES:
For the Petitioners: Pro Se

For the Respondent: Paul Koch, Esquire
 

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. 2000). The Taxpayers 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 Taxpayers' 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 May 23, 2001 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 Taxpayers did not file their 1996 South Carolina Income Tax Return by the due date, April 15, 1997. Instead, Taxpayers filed their 1996 Income Tax Return on April 17, 2000 and claimed a refund of $1489.00.

3. The Department denied the Taxpayers' claim for refund on August 10, 2000 and issued a Final Agency Determination on December 8, 2000.

4. Taxpayers assert that their 1996 Income Tax Return was timely filed. Taxpayers contend that they are entitled to a refund because they were going through a very stressful time in their lives when the 1996 Income Tax Return was due and they are very unfamiliar with South Carolina tax laws.

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. 2000).

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. In this case, the applicable refund statute is S.C. Code Ann. § 12-6-470 (2000). This statute gives the Department the authority to issue refunds provided such claims are submitted within the time limitations of S.C. Code Ann. § 12-54-85.

4. S.C. Code Ann. § 12-54-85(F)(1) (2000) states the following:

. . . 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.


5. If Taxpayers had filed a timely return, they would have had three years to file a claim for refund. However, Taxpayers did not timely file a return and, therefore, they only had two years from the date their taxes were "paid" in which to file a refund claim. Inasmuch as their 1996 taxes were deemed paid on April 15, 1997, (1) Taxpayers' refund claim had to be submitted no later than April 15, 1999. Taxpayers' return was not filed until April 17, 2000, three years after it was due.

6. Therefore, Taxpayers do not meet the time limitations set forth in S.C. Code Ann. § 12-54-85(F)(1) (2000) 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). Furthermore, this tribunal has no legislative powers. Its responsibility is to determine and give effect to the intention of the legislature. To do otherwise is to legislate, not interpret. The responsibility for the justice or wisdom of laws rests exclusively with the legislature. Smith v. Wallace, 295 S.C. 448, 369 S.E.2d 657 (Ct. App. 1988).

7. In enacting S.C. Code Ann. § 12-54-85, the General Assembly protected the rights of taxpayers against erroneous assessments. At the same time, in not providing exceptions for untimely refund claims, the legislature virtually ensured that the Department would not be inundated with thousands of requests for refunds after the expiration of the statutory period.

8. The U.S. Supreme Court has recognized the problem government would encounter if there were equitable exceptions to statutorily mandated time limits for requesting refunds of erroneously paid or assessed taxes:

An "equitable tolling" . . . 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.

United States v. Brockamp, 519 U.S. 347 (1997). While this situation is unfortunate for the Taxpayers 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 Taxpayers' request for a refund of $1489.00 is denied.

AND IT IS SO ORDERED.



______________________________________

C. Dukes Scott

Administrative Law Judge



Columbia, South Carolina

May 30, 2001

1. See S.C. Code Ann. § 12-54-85(F)(5)(a) (" . . .Payment of any portion of the tax made before the last day prescribed for the payment of the tax is considered made on the last day. The last day prescribed for filing the return or paying the tax must be determined without regard to any extension of time.)


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