Baldwin Tax Blog

Easier Acces to South Carolina Entities' File Numbers

As of January 1st, 2009, the South Carolina Department of Revenue has dropped the requirement of providing a Power of Attorney in order to receive an entity's South Carolina File Number.  In order to obtain this information, a preparer will have to state the name of the entity and its FEIN number. 

To lessen the volume of calls, SCDOR sent out postcards with stated file numbers to the SC Corporations with a 12/31 year-end in December of 2008.  Therefore, checking with your client first for the postcard will decrease the amount of phone call traffic and wait time for SCDOR so that they may help others with different matters.

Even though you are not required to have a Power of Attorney to obtain a file number, you are still required to obtain a Power of Attorney from your client to discuss any other taxpayer information. 

Sample Post Card with Location of SC File Number

We number #25

The 2009 Paper by the Tax Foundation has South Carolina on the 2009 State Tax Climate List. That is the middle of the pact. We are neither the best, nor the worst business tax climate in the US. The Best Climate is Wyoming for 2009. The worst is New Jersey.

New Tax Rules Imposed by the South Carolina Illegal Immigration Reform Act

Effective July 1, 2008

1.       Prohibits a business from claiming an income tax deduction for amounts paid to unauthorized aliens for services rendered if the unauthorized alien is paid $600 or more in a year

2.       Requires 7% income tax withholding for certain persons performing services if those persons do not present proper documentation to withholding agent

Prohibit Income Tax Deduction

However there is a prohibition to the income tax deduction for services that will not apply:

                -If SC business exempt from compliance with federal employment verification procedures under federal law

                -If person being paid is not directly paid or employed by business

                -If employment status of person is verified

                - If person is hired by the taxpayer before January 1, 2009

However, a business will not be subject to this prohibition of an income tax deduction for services if it made a reasonable investigation of the person and did not know or should not have known that the person was an unauthorized alien.

7% Income Tax Withholding

                This occurs if employee being paid or should have been paid with a Form 1099 and

                -failed to provide the withholding agent with a TIN or SSN

                -supplied incorrect TIN or SSN

                -provided TIN issued by the IRS for nonresident alien

Duty to withhold does not apply if the person provides a false or incorrect SSN or TIN so long as the false or incorrect SSN or TIN appears to be correct and the withholding agent does not know or should not have known based on reasonable investigation that it was incorrect.

South Carolina Taxation

We are going to comment on South Carolina State and Local taxes and other taxes as we are amused.

Anybody having trouble getting large South Carolina tax refunds back from the state at this time?