Tax Controversy Lawyer Blog

The Internal Revenue Service (IRS) and to some extent the South Carolina Department of Revenue (SCDOR) understand that times are tough and people are having a hard time making ends meet. If you owe back taxes and are flat broke after you pay for necessities, then you may be able to get the IRS off your back until you get back on your feet.

The IRS has the ability to place your account in Currently Not Collectible (CNC) status. If they do then you will no longer receive threatening letters or phone calls about your past due taxes and YOU DO NOT HAVE TO MAKE ANY PAYMENTS. The IRS will not issue bank levies or wage garnishments while your account is in CNC status. However, the IRS will typically file a Federal Tax Lien to protect its interest in the past due taxes. In addition, you will continue to receive letters from time-to-time that inform you of your current balance. Interest and penalties continue to accrue while your account is in Currently Not Collectible status.

Currently Not Collectible status is temporary in nature and your case may be reviewed every two years or so to make sure you still qualify. If your situation improves and the IRS feels like you can afford to make payments, they will take your account out of CNC status and will request some type of payments, typically an Installment Agreement.

As for the South Carolina Department of Revenue (SCDOR), they have an administrative position that if you, or anyone in your household, is receiving a paycheck -- and get this -- even unemployment checks are considered paychecks -- then you will not qualify for Currently Not Collectible status. So if your unemployment has run out and no one in your household has a job, then you can get some relief with the South Carolina Department of Revenue. If not tough luck, you better be ready to cough up some money each month or face wage garnishments and bank levies.

Continue reading "Currently Not Collectible (CNC): The Times are Tough Collection Defense" »

South Carolina DME sales tax audits are ramping up throughout SC. The Department of Revenue is opening sales tax audits for Durable Medical Equipment retailers requesting lots of records and information. The audit period is generally three years. If you have received a South Carolina SC DME sales tax audit notice you do have options.

South Carolina has several sales tax exemptions that apply to certain durable medical equipment or DME items. For example, South Carolina Code of Laws provides:

SECTION 12-36-2120. Exemptions from sales tax.

Exempted from the taxes imposed by this chapter are the gross proceeds of sales, or sales price of:

(28)(a) medicine and prosthetic devices sold by prescription, prescription medicines used to prevent respiratory syncytial virus, prescription medicines and therapeutic radiopharmaceuticals used in the treatment of rheumatoid arthritis, cancer, lymphoma, leukemia, or related diseases, including prescription medicines used to relieve the effects of any such treatment, free samples of prescription medicine distributed by its manufacturer and any use of these free samples;

(b) hypodermic needles, insulin, alcohol swabs, blood sugar testing strips, monolet lancets, dextrometer supplies, blood glucose meters, and other similar diabetic supplies sold to diabetics under the authorization and direction of a physician;

(c) disposable medical supplies such as bags, tubing, needles, and syringes, which are dispensed by a licensed pharmacist in accordance with an individual prescription written for the use of a human being by a licensed health care provider, which are used for the intravenous administration of a prescription drug or medicine, and which come into direct contact with the prescription drug or medicine. This exemption applies only to supplies used in the treatment of a patient outside of a hospital, skilled nursing facility, or ambulatory surgical treatment center;

(d) medicine donated by its manufacturer to a public institution of higher education for research or for the treatment of indigent patients; and

(e) dental prosthetic devices;

Continue reading "South Carolina Sales Tax Audits Ramp Up for Durable Medical Equipment (DME) Retailers" »