South Carolina Permits Reporting of Federal Income Adjustments Based on TEI Policy Statement

On December 8, 2016, the South Carolina Department of Revenue issued SC Revenue Procedure #16-1, which addresses how corporations may report federal income tax adjustments made by the Internal Revenue Service. Generally, corporations may report corrections or changes to a previously filed South Carolina return by filing an amended South Carolina corporate income tax return. However, under SC Revenue Procedure #16-1, corporations may opt to report changes to taxable income resulting from IRS adjustments using a streamlined reporting method, along with a copy of the taxpayer’s federal final determination. Attached to the Revenue Procedure is an approved sample reporting format that is based upon the model provided in TEI’s policy statement addressing the reporting of federal adjustments. South Carolina issued the Revenue Procedure following a liaison meeting TEI held with the Federation of Tax Administrators in November 2015 and follow-up discussions with the director of South Carolina’s Department of Revenue and his staff.