ORDERS:
CONSENT ORDER OF DISMISSAL
This matter came before the South Carolina Administrative Law Court (Court) as a
request for a contested case hearing by the Petitioner (taxpayer) to contest a Final Agency
Determination (Determination) issued by the Respondent, South Carolina Department of
Revenue (Department). The Determination held that the Department has statutory authority
to impute interest income on intercompany loans between the taxpayer and members of its
affiliated group, and that the Department properly applied the substantial understatement
penalty. The Determination affirmed the Department’s assessment of additional tax,
penalties, and interest against the taxpayer.
In the taxpayer’s Pretrial Brief submitted to the Court, the taxpayer asserted that the
advances were capital contributions to a partnership of which the taxpayer was a 50.33%
partner and not intercompany loans between members of the taxpayer’s affiliated group. The
Department was not made aware of these facts during the audit and, thus, requested
documentation from the taxpayer to support this assertion. The taxpayer provided
documentation to substantiate that the advances were capital contributions to a partnership,
and the Department concluded that no additional tax liability was due. The parties have now
reached an agreement resolving this matter as follows:
1.The Department agrees to withdraw the proposed assessment relating to this
matter for the tax years ending December 31, 1996, through December 31, 1999.
2.The Petitioner agrees to withdraw its request for a contested case hearing
pertaining to this matter that is before the Court.
Having reviewed this agreement as set forth, I hereby ORDER its adoption and
DISMISS the Petition in this matter with prejudice.
IT IS SO ORDERED.
______________________________
JOHN D. GEATHERS
Administrative Law Judge
Columbia, South Carolina
June 1, 2004 |
