Corporate e-file nearly doubles

The number of Rhode Island corporate tax returns filed electronically so far this year is nearly double what it was at about the same point last year.

Furthermore, about 71 percent of all corporate returns have been e-filed so far this year, compared with about 52 percent at approximately the same point last year. “We are gratified that more and more practitioners and taxpayers are taking advantage of the many benefits of e-filing,” Sullivan said.

He also attributed some of the increase in e-filing to a decision by the Division of Taxation to enforce the state’s corporate e-file mandate, effective January 1, 2013. The mandate generally applies only to returns filed on Form RI-1120C, Form RI-1120S, and Form RI-1065 by paid preparers.

	Filing season 2012	Filing season 2013	Difference
E-filed returns	6,341	12,089	+    90.65 %
Paper returns	5,812	4,843	-    16.67 %
Total returns:	12,153	16,932	+   39.32 %
% of returns e-filed:	52.2 %	71.4 %
Cumulative figures for tax year 2011 returns filed through March 24, 2012, and tax year 2012 returns filed through March 26, 2013.

Alert to business owners about misleading letter

Rhode Island Tax Administrator David M. Sullivan today cautioned Rhode Island business owners about a potentially misleading letter that some business owners have received recently from an organization calling itself Rhode Island Corporate Compliance.

The letter tells business owners that failure to satisfy “minimum annual filing requirements” in a timely manner causes their business to be in “bad standing” with the state. The letter says that Rhode Island Corporate Compliance can help a business “avoid potential non-compliance” – if the business owner sends a $125 “Document Fee.”

“The letter is presented and written in such a way that business owners could easily be confused and misled,” Sullivan said. “Let me be clear: Neither the Rhode Island Division of Taxation nor any other Rhode Island state agency sent that letter.”

Businesses typically must file an annual return with the Rhode Island Division of Taxation, Sullivan said. And in certain circumstances, a business may need a letter of good standing or a certificate of good standing from the Rhode Island Division of Taxation. But in so doing, they use officially sanctioned Rhode Island Division of Taxation forms, and pay the required tax or filing charge, Sullivan said.

The letter from Rhode Island Corporate Compliance is not an officially sanctioned Rhode Island Division of Taxation form, and the Rhode Island Division of Taxation does not charge a $125 “Document Fee,” Sullivan said. Anyone with questions about their annual tax filing obligations should contact the Rhode Island Division of Taxation at (401) 574-8829 from 8:30 a.m. to 4 p.m. business days.

Rhode Island Secretary of State of State A. Ralph Mollis is also urging Rhode Island business owners to be wary of the direct mail solicitation from Rhode Island Corporate Compliance.

The official-looking letter cites a state law that requires corporations to keep records of accounts, minutes and shareholders. It directs recipients to submit an “Annual Disclosure Statement” along with a “Document Fee” of $125. But the letter did not come from the Secretary of State’s office or any other state agency. Mollis tracked the return address to a postal box at a UPS store in downtown Providence.

Anyone with questions about the direct mail solicitation should contact the Secretary of State’s office at (401) 222-3040 or corporations@sos.ri.gov.

 

Administrative Decision reviews sales tax dispute

The Division of Taxation's latest Administrative Decision reviews a dispute involving sales tax owed by a retailer.

Filing deadline less than one month away

There's less than one month to go for tax-filing season – which means there’s less than a month left to file your Rhode Island personal income tax return (due date: April 15, 2013).

“There’s always a last-minute rush every year. It’s human nature,” said Tax Administrator David M. Sullivan. “But you can beat the rush by filing early – and by filing electronically.” 

E-filing saves time and money, and results in fewer errors and faster processing, said Peter McVay, associate director of revenue services. And only by e-filing can you have your refund deposited directly into your bank or credit union account; you cannot have direct deposit if you file your return on paper, said Susan M. Galvin, chief of Tax Processing Services. E-filing is up 4 percent so far this year.

	Filing season 2012	Filing season 2013	Difference
E-filed returns	261,268	271,777	+     4.02 %
Paper returns	27,089	17,553	-   35.20 %
2-D barcode returns	11,156	9,150	-   17.98 %
Total returns:	299,513	298,480	-     0.34 %
Cumulative figures for tax year 2011 returns filed through March 14, 2012, and tax year 2012 returns filed through March 20, 2013.

Average refund is $536, up 3.7%

Rhode Island personal income tax refunds are averaging $536 apiece so far this season, up 3.7 percent from approximately the same point a year ago.

The total dollar amount of refunds issued so far this year is $124.76 million, up slightly from about the same point a year ago.

	Filing season 2012	Filing season 2013	Difference
Number of refunds	239,339	232,577	-     2.83 %
Total amount refunded	$123,749,130	$124,763,474	+    0.82 %
Average refund	$517	$536	+    3.68 %
Cumulative figures for tax year 2011 refunds through March 16, 2012, and for tax year 2012 refunds through March 15, 2013. Figures for each filing season are before interest and offset, and do not include refunds for tax years other than those stated.

Corporate e-file up 85%

The Tax Division's latest filing season update has just been posted. It shows that corporate tax e-filing has jumped 85 percent so far this year. It also includes information about the latest Statistics of Income (SOI) reports.

Corporate tax filing deadline tomorrow

Tomorrow is Rhode Island's corporate tax filing deadline.

Details are in the Division of Taxation's latest filing season update.

Updated list of tax-prep software programs

The Rhode Island Division of Taxation has updated its list of tax preparation software programs that have completed and passed acceptance testing for tax year 2012:

http://go.usa.gov/2BAF

The list contains commercial software programs that have been cleared for e-filing by the Division of Taxation. It includes 12 tax preparation programs cleared for e-filing Rhode Island corporate tax returns, 31 for individual returns, and 12 for partnership returns.

The Division of Taxation this season began mandating the e-filing of corporate returns:

http://go.usa.gov/2B65

Filing season update: all forms now accepted

The Internal Revenue Service over the weekend finished reprogramming and testing of its computer systems, clearing the way for the filing of federal income tax returns – individual and business – that may have been delayed earlier in the filing season.

It also cleared the way for the filing of Rhode Island income tax returns that may have been delayed. The reason has to do with a longstanding federal-state partnership. Under that arrangement, electronically filed Rhode Island personal income tax returns are transmitted to the IRS, then downloaded by the Rhode Island Division of Taxation.

When the IRS system closed for part of January to let the IRS update its computers to reflect last-minute changes in federal tax law, the IRS could not accept e-filed returns – and the Rhode Island Division of Taxation generally couldn’t, either.

That situation was resolved by late January. However, because some other federal returns couldn’t be filed until early March (because certain forms were still being updated and tested), some Rhode Island returns still could not be filed, either. Now, however, it’s open season: the IRS and the Rhode Island Division of Taxation are accepting, without restriction, individual and business returns.

Online map shows free tax sites

If your income last year was $51,000 or less, and you’re looking for someone to do your tax returns at no charge, check out the interactive map created by The Providence Plan.

The map shows more than 70 sites throughout the state that are run by trained volunteers and that generally provide free preparation and filing of federal and state income tax returns and the Rhode Island property-tax relief claim (Form RI-1040H).

And if you type in your address, the free online tool will narrow your search, showing you just the sites that are within either 10 miles or 20 miles of your location. You can then click on each link for additional information -- including a phone number to call to make an appointment.

Average refund rises 3.8%

The average Rhode Island personal income tax refund is up 3.8 percent, to $541 so far this filing season, compared with $521 at the same point a year ago, early filing season figures show.

The figures also show that the total number of refunds so far is down 11 percent compared with the corresponding period a year ago. The reason is that the federal and state filing seasons got off to a late start this year. That’s because of the last-minute changes to tax law made by President Barack H. Obama and Congress, which required computer systems to be reprogrammed and tested.

“The number of refunds issued, and the aggregate amount of refunds issued, are down so far because of the delay to the start of the filing season,” said Rhode Island Tax Administrator David M. Sullivan. “The delay was a consequence of the lengthy ‘fiscal cliff’ debate and the compromise federal tax law that was enacted in January, which also impacted Rhode Island. Nobody is surprised by the delay, which was well-publicized. But now that all systems are go, we fully expect to see our number of refunds – and our aggregate dollar amount of refunds issued – to increase smartly in the weeks ahead,” Sullivan said.

	Filing season 2012	Filing season 2013	Difference
Number of refunds	186,955	166,153	-   11.13%
Total amount refunded	$97,421,657	$89,808,037	-     7.82%
Average refund	$521	$541	+    3.84%
Cumulative figures for tax year 2011 through March 2, 2012, and for tax year 2012 through March 1, 2013. Figures for each filing season are before interest and offset and do not include returns for tax years other than those stated.

Most Rhode Islanders e-file

The overwhelming majority of taxpayers are choosing to file their Rhode Island personal income tax returns electronically instead of on paper.

For the tax-filing season thus far, about 96 percent of taxpayers have e-filed, up from 91 percent at approximately the same point a year ago.

“It’s early in the season, and nearly all returns filed at this time of year are e-filed,” said Rhode Island Tax Administrator David M. Sullivan. “Still, the early results show that e-filing continues to be popular. The more taxpayers learn about e-filing, the more they like it,” Sullivan said. E-filing saves taxpayers money: processing an e-filed return costs far less than processing a paper return, he said.

	Filing season 2012	Filing season 2013	Difference
E-filed returns	207,090	212,263	+  2.5%
Paper returns	15,440	6,034	-  60.9%
2-D barcode returns	4,362	2,591	-  40.6%
Total returns:	226,892	220,888	-   2.6%
Cumulative figures for tax year 2011 returns filed through February 29, 2012, and tax year 2012 returns filed through March 6, 2013.

Corporate extensions exempt from mandate

The Rhode Island Division of Taxation on January 1, 2013, began enforcing Rhode Island’s corporate tax e-file mandate. The mandate applies to paid preparers. It requires that returns on Form RI-1120C, RI-1120S, and Form RI-1065 be e-filed.

However, Rhode Island’s corporate e-file mandate does not apply to extension requests. Normally, requests for an automatic six-month filing extension are made on Form RI-7004. But the Division of Taxation does not accept e-filed extensions. As a result, Form RI-7004 must be filed on paper. “We don’t accept the 7004 electronically,” said Susan M. Galvin, chief of Tax Processing Services.

Similarly, the corporate e-file mandate does not apply for purposes of seeking an automatic one-month extension, on Form RI-7004-CRS, for the filing of Form RI-1120C and Schedule CRS (for pro forma combined reporting).

• Don't forget that you can make an extension payment online. If you do, you won't need to send in an extension form - either the RI-7004 or the RI-7004-CRS.