The South Carolina Department of Revenue has released Information Letter 19-8, a 2-page advisory opinion regarding waiving federal penalties for underpayments of estimated taxes by certain farmers and fishermen.
In IRS Notice 2019-17, the IRS announced it will waive federal penalties imposed by IRC Section 6654(a) for underpayments of estimated taxes by certain farmers and fishermen. The SC DOR will follow the IRS’s position and will also provide penalty waivers for qualifying farmers and fishermen who file and pay their individual income taxes in full by April 15, 2019.
A taxpayer qualifies as a farmer or fisherman for tax year 2018 if at least two-thirds of the taxpayer’s total gross income was from farming or fishing in either 2017 or 2018.
Normally, for both federal and South Carolina purposes, farmers and fishermen who choose not to make estimated installment payments are not subject to a penalty if they file their return and pay the full amount of tax due by March 1 of the following year.
Because of certain rule changes causing many farmers and fishermen to have difficulty in accurately determining their tax liability by March 1, the IRS announced it will waive the penalty for qualifying farmers and fishermen who miss the March 1 deadline if they file their income tax returns and pay their taxes in full by April 15, 2019.
Information Letter 19-8 (“Farmers and Fishermen Penalty Relief for Tax Year 2018 (Income Tax)”) can be read here: https://dor.sc.gov/resources-site/lawandpolicy/Advisory%20Opinions/IL19-8.pdf