Monday, July 24, 2017

Two new Administrative Decisions

The Rhode Island Division of Taxation has posted two new Administrative Decisions:
  • Decision 2017-08 involves whether a taxpayer owes tax, interest, and penalty for tax year 2013.
  • Decision 2017-09 looks at a disputed expense under the historic preservation tax credit program.

Monday, July 17, 2017

Fiduciary returns on Form RI-1041

Fiduciary returns on Form RI-1041


The Rhode Island Division of Taxation has resolved an issue involving certain fiduciary income tax returns filed on Form RI-1041 for the 2016 tax year.

For certain such returns, which showed a balance due and which were accompanied by a payment, the payments were not properly credited to the account. As a result, the Division mailed a notice to the filers, asserting that the filers owed tax, interest, and penalty.

Proactive step


When the Division of Taxation’s Front Office learned of this matter several days ago, the Division immediately responded by creating and implementing a change to its computer system. As a result:
  • the affected accounts are being automatically credited with the payments that the taxpayers had previously made, covering the 2016 tax year;
  • the interest, penalty, and balance due, as shown on the notices that the filers received in recent weeks, will automatically be deleted from the taxpayer’s record; and
  • filers who made payments in response to the notice will receive a refund.

 In perspective


The Division of Taxation processes more than 650,000 income tax returns each year. The Division estimates that approximately 1,600 returns were affected by the matter at issue, mainly fiduciary income tax returns filed on Form RI-1041 on behalf of certain trusts and estates – in other words, only a small fraction of the total. Nevertheless, each taxpayer is important, so it is imperative that the Division provide guidance for any fiduciary or tax professional involved in this matter.

Filers of the affected returns will be able to disregard the notice they had received and need take no further action. However, if a filer receives a second notice, the filer should contact the Division (because the second notice could be a sign of an underlying issue with the return itself). 

Anyone with questions should contact the Division by email. Put “Form 1041” in the message header and send the email to:Tax.Assist@tax.ri.gov. Or call the Division at (401) 574-8829 and choose option #3. The Division will also mail a letter to each affected filer, providing a brief explanation and contact information.

Tuesday, July 11, 2017

Sales tax permits, coupon booklets

The Rhode Island Division of Taxation has begun mailing sales tax coupon booklets and sales tax permits.
Paper filers

Late last month, the Division began mailing sales tax coupon booklets, with new sales permits enclosed, to about 2,390 retailers who remit sales tax monthly.

At about the same time, the Division began mailing sales tax coupon booklets, with new sales permits enclosed, to about 2,890 retailers who remit sales tax quarterly, and also began mailing the following:

  • 529 booklets with coupons for remitting meals-and-beverage tax monthly;
  • 96 booklets with coupons for remitting meals-and-beverage tax quarterly;
  • 115 booklets with coupons for remitting tax involving tires, lubricating oils, and other hard-to-dispose materials;
  • 30 booklets with coupons for remitting hotel tax;
  • 15 booklets with coupons for remitting prepaid wireless tax monthly; and
  • 5 booklets with coupons for remitting prepaid wireless tax quarterly.

Electronic filers

Electronic filers of sales and related taxes do not receive paper coupon booklets. As a result, their sales permits must be sent separately. The Division began mailing several thousand of these permits on Friday, July 7; more will be mailed out at a later date. Most of those who hold sales permits file electronically.

Keep in mind that the Division mails sales permits to those who filed their renewal applications, paid the $10 renewal fee, and are not delinquent on their state taxes. If you have not renewed your sales permit for the year which began July 1, 2017, you may do so online or on paper. For online renewals, click here. For the paper renewal form, click here.

Cigarette dealers

Cigarette dealers that do not file electronically will receive a booklet for remitting sales tax monthly or quarterly. They will also receive a cigarette permit (assuming they renewed). The Division began mailing the coupons and permits last week.

Note: If you have not received your new sales permit, covering the year which began July 1, 2017, you may continue using the old one until the new one arrives.

New account IDs

The Division of Taxation has assigned individualized account identification numbers to retailers and other holders of sales permits. For more information about the new account ID numbers, and how they apply, click here.

Wednesday, June 28, 2017

Security Summit warns of scam

The Rhode Island Division of Taxation, the Internal Revenue Service, and other Security Summit partners are warning tax professionals about an email purporting to be from a tax software education provider. For details, please click here.

Friday, June 9, 2017

Recent developments


  • Michael F. Canole, CPA, has been promoted to the rank of assistant tax administrator. For details, click here.
  • Rhode Island Department of Revenue Director Robert S. Hull has announced the conclusion of a successful personal income tax filing season by the Division of Taxation. To view the announcement, click here.
  • The Division of Taxation has issued an Advisory about new account ID numbers for holders of sales tax permits. To view the Advisory, click here.
  • The Division of Taxation provided an update on the 2017 filing season during a House Oversight Committee hearing at the State House. To view the slides, click here. For a video of the hearing, archived by Capitol Television, click here.

Wednesday, May 10, 2017

Seminar is sold out

The Rhode Island Division of Taxation's seminar next month, on self-audits and sales/use tax, has sold out. Therefore, pre-registration is now closed. The Division thanks everyone who expressed interest in the event.

Tuesday, May 9, 2017

Sales tax due after audit

The Rhode Island Division of Taxation has posted its latest Administrative Decision. 

Decision 2017-07 looks at whether a retailer owes additional sales tax following an audit.