Tax Law Insights

The South Carolina Department of Revenue (SCDOR) administers the state's tax laws. Like the IRS, SCDOR audits tax returns, but only certain returns subject to South Carolina tax, such as South Carolina income tax returns, sales and use tax returns, and certain property tax returns.

Depending on the complexity of the issues being audited or examined by SCDOR, SCDOR audits can be conducted through correspondence, or through a field audit.

SCDOR field audits are generally conducted by "auditors." Each auditor has an immediate audit supervisor, and audit supervisors report to a regional manager. SCDOR field audits are initiated and conducted much like their IRS counterparts, although SCDOR administers taxes at the state level, such as sales and use and property taxes, that are, of course, not examined federally.

SCDOR auditors will use many of the same (or equivalent) forms in their examination process as are used federally (e.g. Forms 870 and 872). SCDOR examination reports will often be transmitted with a Form SC-870, Waiver of Restriction on Assessment and Collection of Additional Tax or Acceptance of Overassessment, together with related "Billing Summary," "Billing Report," "Distribution Report," "Penalty Detail," "Filing Detail," and "Adjustments" summary. Unlike their federal counterparts, SCDOR examination reports do no often provide extensive factual summaries, or legal support.