Rhode Island CPA seminar

Rhode Island Division of Taxation officials took part yesterday in a seminar for tax preparers, sponsored by the Rhode Island Society of Certified Public Accountants. The event, held at the Providence Marriott Downtown, included a discussion of what's new for the coming filing season and what's new for the 2017 tax year. 

The Division's delegation was led by Acting Tax Administrator Neena S. Savage and featured several presenters, including Chief Revenue Agent Marlen Bautista (pictured below), who heads the Division's Corporate Tax section.

Chief Revenue Agent Marlen Bautista

Inflation adjustments, withholding tables, Form W-4

The Rhode Island Division of Taxation has announced the standard deduction amounts, tax bracket ranges, and other key figures for the Rhode Island personal income tax for tax years beginning on or after January 1, 2017. The agency also posted withholding tables for 2017, and the Form W-4 for 2017. For details, click here.

Filing deadline will be April 18, 2017

The Rhode Island Division of Taxation announced today that the personal income tax filing deadline for the coming filing season will be April 18, 2017, the same as the federal filing deadline. 

As a result, tax preparers and taxpayers will have a few extra days to prepare and file returns and pay any balance due. For more information, click here.

Tax guide for surplus lines

The Rhode Island Division of Taxation today posted a guide to help surplus lines brokers/licensees meet their Rhode Island tax filing and tax payment obligations. To view a copy, click here.

Tax preparer seminar held in Newport

The Rhode Island Division of Taxation today held a seminar for tax preparers. The event, at the Community College of Rhode Island's Newport County campus, attracted 109  preparers. 

The main focus was on what's new for the coming tax-filing season and what's new for the 2017 tax year. Among those making presentations was Chief Revenue Agent Leo Lebeuf (pictured below), who heads the Division of Taxation's Personal Income Tax section.

Chief Revenue Agent Leo Lebeuf

Protecting your financial data

The Internal Revenue Service, the Rhode Island Division of Taxation, and others announced today the start of “National Tax Security Awareness Week.” 

As part of the Security Summit effort, the IRS, the states, and the tax community will share a variety of information throughout next week to educate taxpayers on steps they should take to protect themselves from identity theft and tax scams as well as protect their valuable financial data in advance of the upcoming filing season.

The week, which runs December 5 through 9, will feature a series of consumer warnings and tips that will be released daily and featured on the web page titled "Taxes. Security. Together." as well as a one-page Publication 4524, "Security Awareness for Taxpayers." For more information, click here.

Tax agencies combat ID thieves

The Internal Revenue Service, the Rhode Island Division of Taxation, and others have issued a joint reminder that online threats and annoyances abound.

The group -- which includes other states, tax software providers, and tax preparers -- urged consumers to make sure they have active and up-to-date security software to protect computers from hackers and identity thieves. To view the reminder, issued on November 28, click here.

Estate tax credit, threshold for 2017

The Rhode Island Division of Taxation has announced the estate tax credit amount and threshold amount for estates of decedents dying on or after January 1, 2017. For details, click here.

Some federal refund delays in 2017

The IRS says it will hold refunds until mid-February in 2017 for people claiming the earned income credit or the additional child tax credit. The federal refund delay is the result of a provision in a recent federal law aimed at fighting refund fraud, the IRS said in an official announcement issued earlier this week.

The IRS also said in the announcement that new identity theft and refund fraud safeguards put in place by the IRS and the states may mean some tax returns and refunds face additional review. For more information, click here.

Seminar for tax preparers -- registration ends Monday

The Rhode Island Division of Taxation is holding a seminar for paid preparers of tax returns. It will take place on December 2, 2016, at the Community College of Rhode Island campus in Newport, and will run from 9:00 a.m. to 12:00 noon. The main focus is on what's new for the coming filing season, and what's new for the new tax year.

The seminar is free, and seating is still available, but pre-registration is required. Registration ends at 4:00 p.m. Eastern time on Monday, November 28, 2016. To preregister, please click here.

Tax credits for Newport project

The Rhode Island Division of Taxation has posted details about a rehabilitation project in Newport involving $3.1 million in historic preservation tax credits.

The Opera House, constructed in 1867 and located on Touro Street in Newport's historic Washington Square, will undergo additional exterior and interior rehabilitation as a result of the project. The project's name is "Opera House Theater" and the applicant is the Newport Performing Arts Center.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit
program.

Combat identity theft by protecting data

The Internal Revenue Service, the Rhode Island Division of Taxation, other state tax agencies, and the nation’s tax industry urge tax professionals and taxpayers to join in the effort to combat identity theft by doing more to protect personal and financial data from online threats. For details, please click here.

Latest conversion completed, services resume

The Rhode Island Division of Taxation has completed the third phase of its changeover to a new agency-wide computer system. As a result, the Division resumed all services this morning. All services are now in full operation. To learn more, click here.

Third phase of computer project began this morning

The third phase of the Rhode Island Division of Taxation’s computer system conversion project began this morning and will continue through November 14, 2016.

During the conversion period, the office will remain open and a number of services will continue to be available, but some services will not be available. Tax professionals and taxpayers should plan accordingly. For more information, click here.

All services resume in full on November 15, 2016.

New deadline for Form W-3

The Rhode Island Division of Taxation has adopted the federal filing deadline for purposes of employer reporting of personal income tax withheld.

As a result, employers must now file the annual Form RI-W3, “Reconciliation of Personal Income Tax Withheld by Employers,” one month earlier than before -- by January 31, instead of by February 28. In addition, employers must file the related Form W-2 information with the Division of Taxation by January 31, instead of by February 28.

The new Rhode Island deadline is the same as the new federal deadline and the deadline in many other states. For more information, click here.

Division of Taxation seminar kicks off at CCRI

A total of 111 tax preparers have turned out for today's Seminar for Tax Preparers, sponsored by the Rhode Island Division of Taxation and held at the Community College of Rhode Island's Knight Campus in Warwick. Among the topics: what's new for the coming filing season, and what's new for tax year 2017. 

Incentives report posted

The Rhode Island Division of Taxation yesterday posted its annual report of tax credits and incentives administered in conjunction with the Rhode Island Commerce Corporation. The two-page report, for the fiscal year ended June 30, 2016, shows the aggregate number of credits and incentives approved by the Commerce Corporation. However, given that the credit and incentive programs are so new, none of the credits or incentives were issued for the fiscal year by the Division of Taxation, the report shows.

Reminder: Computer conversion coming up

The third phase of the Rhode Island Division of Taxation’s changeover to a new agency-wide computer system will start on November 7, 2016, and continue through November 14, 2016. 

The Division of Taxation, at One Capitol Hill in Providence, will remain open during normal business hours while the computer system conversion occurs, and many services will continue to be available. For example, the agency’s website and email system will remain fully functional, payments will be received, and electronically filed tax returns will be received and acknowledged. 

However, a number of services will not be available during the conversion. For example, the Division will be unable to issue letters of good standing, unable to release license and registration blocks, and unable to check on a taxpayer’s account balance. Taxpayers and tax practitioners should plan ahead. For example, if someone is blocked from renewing a driver’s license, professional license, or motor vehicle registration because that person owes back taxes, that person should pay the tax debt before the conversion period starts. (For best results, make payment by close of business on November 3.) For more about the conversion, please click here.

New form to file involving motor vehicle use tax

If use tax is paid at the Rhode Island Division of Taxation office on behalf of a purchaser, Form T-205, "Consumer's Use Tax Return," must be filed at the same time (in addition to other required paperwork), the agency announced on October 25. 

• The requirement to file Form T-205 on behalf of a motor vehicle purchaser is effective on or after November 1, 2016.
• The requirement does not apply when use tax is paid at the Division of Motor Vehicles on behalf of a motor vehicle purchaser.
• The requirement does not apply when use tax is paid by a motor vehicle dealer online on behalf of a motor vehicle purchaser.

Interest rates; filing deadline; service announcement

Interest rates

The Rhode Island Division of Taxation today posted the interest rate on delinquent tax payments and the interest rate on overpayments for calendar year 2017. To learn more, click here.

Filing deadline

The Division of Taxation reminds tax professionals and taxpayers of tonight's filing deadline. (The extended due date is normally October 15, but that date fell on a weekend this year, so the deadline had moved to October 17.) For more information, click here.

Service announcement

The Division of Taxation reminds tax professionals and taxpayers that the next phase of the Division of Taxation’s changeover to a new agency-wide computer system will start on November 7, 2016, and continue through November 14, 2016. The Division of Taxation, at One Capitol Hill in Providence, will remain open during normal business hours while the computer system conversion occurs, and many services will continue to be available, but some will not. All services resume on November 15, 2016. Click here for more details.

Payments by credit card, debit card

Taxpayers may now use their credit cards or debit cards to pay their Rhode Island personal income tax online, through the Rhode Island Division of Taxation website.

The system will accept credit cards and most debit cards and can be used for payments of the following taxes:

• personal income tax
• corporate income tax
• sales and use tax
• withholding 

For more information, including details about fees, click here.

Audit of gas station convenience store

The Division of Taxation's latest Administrative Decision focuses on a sales audit of a gas station convenience store. To read more, click here.

Filing deadline; computer conversion

The Rhode Island Division of Taxation reminds tax professionals and taxpayers that Monday – October 17 – is the deadline for filing Rhode Island resident and nonresident personal income tax returns for the 2015 tax year.

The Division also issued a reminder about the third phase of its computer conversion, which will start on November 7, 2016, and continue through November 14, 2016. During that period, the Division will remain open on normal business days, but some services will not be available.

To view today's Advisory, click here. 

"Wavemaker Fellowship" tax credits awarded

The Rhode Island Commerce Corporation recently announced that it has selected the recipients of the first "Wavemaker Fellowship" tax credits.

Following a competitive review process, a total of 215 college graduates were chosen to receive the credits. The graduates work in the science, technology, engineering, and mathematics fields at Rhode Island employers. For more information, click here.

Extended due dates

The Rhode Island Division of Taxation today announced a new set of extended due dates for certain entities.

The changes mainly involve C corporations that file on Form RI-1120C, pass-through entities that file on Form RI-1065, and calendar-year trusts that file on Form RI-1041.

The Division of Taxation is making the changes so that entities will have the same deadlines for filing their federal and Rhode Island returns – a convenience for businesses and for tax professionals.

Acting Tax Administrator warns of scam

Rhode Island Acting Tax Administrator Neena S. Savage today urged tax professionals and taxpayers to be on guard against fake emails purporting to contain an IRS tax bill related to the Affordable Care Act.

Details of the scam are in an alert issued jointly today by the IRS and its Security Summit partners, which include the Rhode Island Division of Taxation.

Payments of estimated tax due tomorrow

The Rhode Island Division of Taxation reminds tax professionals and taxpayers that quarterly estimated payments of Rhode Island personal income tax are due tomorrow. September 15 is also the deadline for making estimated payments of certain other taxes. 

But the extended due date this time around for calendar-year C corporations is not September 15. Instead, it is October 17.

Click here for more information.

Scam Alert: New wave targets tax pros

Rhode Island Acting Tax Administrator Neena S. Savage urges tax professionals to read today’s alert from the Internal Revenue Service, which warns of a new wave of online attacks targeting tax professionals. For details, click here.

Labor Day holiday

The Rhode Island Division of Taxation office, at One Capitol Hill, Providence, R.I., will be closed on Monday, September 5, in observance of the Labor Day holiday. The office will reopen to the public at 8:30 a.m. on Tuesday, September 6.

Forms, instructions, and other documents, as well as online tools, are available throughout the holiday weekend on the agency's website: www.tax.ri.gov

Revised forms for estate tax filings

The Rhode Island Division of Taxation has posted revised forms for estate tax filings. The Division has also created and posted a voucher for use when making payments involving the estate tax or estate tax-related lien releases (see snapshot below). For details, click here.

Latest tax credit disclosure report

The Division of Taxation has posted on its website its latest annual tax credit and incentive report, as required by Rhode Island statute.

The latest report identifies 20 businesses that received a combined total of $29.4 million in certain state tax credits and incentives for the fiscal year ended June 30, 2016. 

Some of those recipients also received a combined total of approximately $15.3 million in other Rhode Island tax credits and incentives, the report shows.

New scam targets tax preparers

Rhode Island Acting Tax Administrator Neena S. Savage urges tax professionals to read yesterday’s announcement from the Internal Revenue Service regarding a new phishing scam, which specifically targets tax preparers. The announcement also reviews ways to safeguard data. 

Decision on cigarette dealer's license

The latest Administrative Decision posted by the Division of Taxation looks at whether a cigarette dealer's license should be revoked. To view, click here.

New Administrative Decisions

The Division of Taxation has posted four new Administrative Decisions. All of them involve taxation of cigarettes and related products:

• 2016-17, cigarette and sales tax
• 2016-18, cigarette tax and dealer's license
• 2016-19, cigarette and sales tax
• 2016-20, cigarette tax and dealer's license

Administrative Decision on cigarette license

The latest Administrative Decision, posted today by the Division of Taxation, focuses on whether a cigarette dealer's license should be revoked.

Latest issue of newsletter

The latest issue of the Rhode Island Division of Taxation’s newsletter, posted today, includes:

• A look at some tax changes contained in recently enacted legislation.
• A review (with tables) of the new filing deadlines for business entities.
• An article about the new chief of the Division’s Excise Tax section.
• Regular features, including “Practitioners’ Corner” and “Legal Corner.”

To view a copy, please click here.

Notices on tax credit reporting, propane

The Rhode Island Division of Taxation has posted two notices:

•  Notice 2016-03 involves the reporting of tax credits and incentives.
•  Notice 2016-04 involves propane used for electricity generation.

$8 million in tax credits for seven projects statewide

The Rhode Island Division of Taxation has posted details about seven rehabilitation projects that involve a combined total of nearly $8 million in historic preservation tax credits. 

Four of the projects are in Providence; the others are in Newport, Bristol, and Woonsocket.

* The American Brewing Co. property at 431 Harris Ave., Providence, near the intersection with Atwells Avenue, was built as a brewery in 1892 and later converted for use as a moving and storage facility. Plans are to rehabilitate it for use as a theater, artist work space, and residential apartments. The project involves an estimated $500,000 in historic preservation tax credits.

* The rehabilitation of the Exchange Bank Building, a four-story brick structure built in 1845 and located at 28-32 Kennedy Plaza in the heart of Providence's financial district, has been cleared for an estimated $1.25 million in historic preservation tax credits. The upper floors would be converted for use as a hotel; half of the ground floor would be used as a restaurant to serve the hotel, while the rest of the ground floor would continue in use as a bank.

* The Siegal Building, a four-story structure at 150 Washington St. in downtown Providence, was built in 1927 by the founder of City Hall Hardware. Plans are to restore the building's exterior, including a new storefront and windows. The building would continue to be used for commercial purposes. The project involves an estimated $412,500 in historic preservation tax credits.

* A two-story brick structure at 26-30 Washington Square, Newport, built in 1931, would be rehabilitated to allow for continued business and commercial use. The project, in Newport's historic Washington Square area, involves an estimated $200,000 in historic preservation tax credits.

* The rehabilitation of the historic David Augustus Leonard House, at 366 Hope St., Bristol, involves an estimated $100,000 in historic preservation tax credits.

* The U.S. Rubber Company, Building 85, at 475-485 Valley St., Providence, now used as a warehouse, would be converted for warehouse and business use, according to the application filed by WaterFire Providence. The project involves an estimated $2.25 million in historic preservation tax credits.

* Rehabilitation of the Woonsocket Rubber Company, an industrial mill complex at 68 South Main St., in the Market Square section of Woonsocket, is to include, among other things, commercial space, residential apartments, community space, and management offices. The project involves an estimated $3.25 million in historic preservation tax credits.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program.

"Summary of Legislative Changes" posted

The Rhode Island Division of Taxation today posted the 2016 edition of its annual “Summary of Legislative Changes.”

This edition provides a summary of certain tax-related items contained in the recently enacted budget bill for fiscal year 2017.

Tax preparers warned about risk of data theft

Rhode Island Acting Tax Administrator Neena S. Savage is providing the following announcement from the Internal Revenue Service to inform Rhode Island tax practitioners about data theft risk.

WASHINGTON — Leaders from the Internal Revenue Service, state tax agencies and tax preparation community today warned tax preparers that they increasingly are targets of cybercriminals and should take appropriate steps to protect clients from data theft.

IRS also posted new information to help tax professionals get started with safeguards to protect clients’ data. It’s the first in a series of fact sheets and tips on security, scams and identity theft prevention measures aimed at tax professionals. The Protect Your Clients; Protect Yourself campaign will run through the start of the 2017 filing season.

Recognizing the risk to tax preparers, this new effort is an expansion of the Security Summit’s 2015 “Taxes. Security. Together.” campaign aimed at increasing public awareness for using security software, creating stronger passwords and avoiding phishing emails.

“We have more than 700,000 tax preparers in this country, with many of those taking good security precautions,” said IRS Commissioner John Koskinen. “But cybercriminals are continuing to evolve, using new technology, ruses and scams. The tax community handles large volumes of sensitive personal and financial information. We need every tax professional to stay on top of their security to protect taxpayers as well as their businesses.”

Fact Sheet 2016-23, “Tax Professionals: Protect Your Clients; Protect Yourself from Identity Theft,” urges preparers to follow the security recommendations found in Publication 4557, Safeguarding Taxpayer Data. The fact sheet outlines the critical steps necessary to protect taxpayer information and to build customer confidence and trust.

Preparers should sign up for e-News for Tax Professionals, the IRS Tax Pro Twitter account and the Return Preparer Office’s Facebook page to stay informed about this campaign and about scams and schemes in general. The IRS also is creating a Protect Your Clients; Protect Yourself page on IRS.gov.

The Security Summit consists of the IRS, state tax agencies and the private-sector tax industry working together to safeguard taxpayers from tax-related identity theft. On June 28, Summit partners announced their 2017 initiatives to combat stolen identity refund fraud.

Transportation network companies

The Rhode Island Division of Taxation has posted a Notice regarding a new law involving transportation network companies. The new law takes effect today, July 1, 2016.

To view a copy of the Notice, click here.

Latest Administrative Decisions focus on refunds

The Division of Taxation has posted five new Administrative Decisions. They all focus on the same theme -- whether claims for personal income tax refunds were filed on time. These latest Administrative Decisions are available via the following links:

• 2016-11
• 2016-12
• 2016-13
• 2016-14
• 2016-15

Mailing of sales tax permits, coupon booklets

The Rhode Island Division of Taxation is preparing its annual mailing of sales tax permits and coupon booklets. There will be two separate mailings: one containing the permits, the other containing the booklets. For details, please click here.

Tax credits for projects in Providence, North Providence

The Rhode Island Division of Taxation has posted details about three rehabilitation projects: two in Providence and the other in North Providence. All involve historic preservation tax credits.

• Plans are to rehabilitate the Union Trust Building, on Dorrance Street in the Downtown Providence Historic District, to a mix of business and restaurant use on the first two floors and rooftop, with apartments on all other floors.
• The Irons & Russell Building, at 95 Chestnut St., in the Providence Jewelry Manufacturing Historic District, is to be converted to residential use, with 57 apartment units and a small ground-floor restaurant.
• The proposal for the Lymansville Company Mill, at 184 Woonasquatucket Ave., North Providence, is to establish 101 apartments.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit
program.

Tax credits for projects in Providence, Pawtucket

The Rhode Island Division of Taxation has posted details about two rehabilitation projects. One is of a building in downtown Providence. The other is of a building in downtown Pawtucket. Both involve historic preservation tax credits.

• The rehabilitation of the five-story Case-Mead Building -- at 68-76 Dorrance St., in the Downtown Providence Historic District -- will include commercial space on the first floor and "micro" apartments on the upper four stories.
• The rehabilitation of the George H. Fuller and Sons Co. building -- at 151 Exchange St., along the Blackstone River in Pawtucket's Exchange Street Historic District -- will include commercial space on the street level, with residential space elsewhere.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit
program.

Application deadline for Wavemaker program

The Rhode Island Division of Taxation reminds tax professionals and others that the application deadline is Wednesday for the Wavemaker tax credit program.

Applications must be filed with the Rhode Island Commerce Corporation on or before June 15, 2016.

The Wavemaker program is a competitive student loan reimbursement program for recent graduates working in jobs in the STEM (science, technology, engineering, and mathematics) fields and certain design fields. If an eligible applicant is selected, he or she may receive a refundable tax credit that can help to cover student loan payments for up to four years.

• For the program's home page, click here.
• For the application and related information, click here.
• For a recent announcement about the program, click here.

Hearing on personal income tax refunds

Rhode Island Department of Revenue Director Robert S. Hull and Acting Tax Administrator Neena S. Savage tonight testified before the House Committee on Oversight.

The presentation was titled, "The Causes of the Delay of Tax Refunds in 2016 and How the Department Will Address Them before Next Tax Season."

They said that the Division of Taxation has processed approximately 395,000 personal income tax refunds so far this year (through June 6, 2016). That represents about 95 percent of the refunds processed last year.

Among the reasons that some refunds have been delayed this year:

• an 84 percent increase in the number of potentially fraudulent refund claims (following a nationwide trend);
• a mandate from the Auditor General to review refund claims more closely;
• the rollout of a new, agency-wide computer system;
• filing errors; and
• staffing challenges due to increases in phone calls, walk-ins, and emails.

They told the committee that substantially all valid tax refunds on returns filed as of June 6, 2016, should be issued by mid-July 2016. They also made the point that safeguarding taxpayer information and money is the agency's primary objective. Plans for the coming filing season include expanding the Division's cyber fraud unit to streamline the process and further protect taxpayers.

Rhode Island Department of Revenue Director Robert S. Hull and Acting Tax Administrator Neena S. Savage

Regulation on sales and hotel taxes

The Rhode Island Division of Taxation today posted, as final, a regulation involving sales and hotel taxes.

The final regulation updates an older regulation to reflect changes in the law enacted last year. Those changes extended the sales and hotel taxes to short-term residential rentals. The final regulation discusses room rentals – by hotels, room resellers, hosting platforms, and others.

Tax credits for project in Providence

The Rhode Island Division of Taxation has posted details about the rehabilitation of a building located in the Broadway-Armory Historic District in Providence.

The project, at the former Meader Street School at 20 Almy St., Providence, involves Rhode Island historic preservation tax credits. The building will be converted to apartments.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program.

Division of Taxation helps investigate illegal network

The Rhode Island Division of Taxation helped to investigate a multi-state illegal tobacco distribution network. The investigation led to the arrest and arraignment on Thursday of a man in Holyoke, Massachusetts.

“We allege that this defendant was running a multi-state criminal operation that involved transporting, selling and distributing illegal, untaxed cigarettes to convenience stores across Massachusetts and across state lines,” Massachusetts Attorney General Maura Healey said in a statement. “We will continue to work with our state and federal partners to crack down on those who evade the law and rob our state of needed tax revenue,” Healey said.

“This is the result of teamwork and of close cooperation and hard work among investigative authorities in multiple jurisdictions, including Massachusetts, Rhode Island, and Connecticut,” said Rhode Island Acting Tax Administrator Neena S. Savage.

“We are proud of the efforts that the Rhode Island Division of Taxation’s Special Investigation Unit made over multiple months in this complex investigation. We will continue to work together with state and federal agencies to make sure that the law is upheld,” Savage said.

The case is being investigated by the Massachusetts Attorney General’s Office; the Massachusetts State Police; Holyoke Police; the Massachusetts Department of Revenue; the federal Bureau, of Alcohol, Tobacco and Firearms; the Connecticut Department of Revenue Services’ Special Investigations Section; the Providence Police Intelligence Unit; and the Rhode Island Division of Taxation’s Special Investigation Unit.

Attorney General issues caution on IRS scam

Rhode Island Attorney General Peter F. Kilmartin last week cautioned consumers about a new twist on an IRS scam.

Traditionally, the scammers would call a consumer stating they were calling from the IRS to let the consumer know they owed back taxes and were going to be arrested if they did not make a payment right away, using a pre-paid debit card. More often than not, if the consumer did not answer the phone, the scammer would not leave a message, and would move on to their next target.

Now, he said, the scammers have created a sophisticated network of phone calls and return phone numbers in order to fool the consumer into thinking they are legitimate. More and more often, the scammers will leave a voicemail indicating they are from the IRS calling about a problem with your tax return and request the consumer call them back immediately.

Attorney General Kilmartin strongly suggests not to engage the caller. "If someone calls claiming to be from the IRS, simply hang up. If you receive a voicemail from someone claiming to be from the IRS, do not call them back," said Kilmartin. For more information, click here.

Wavemaker tax credit applications now available

Governor Gina M. Raimondo and the Rhode Island Commerce Corporation yesterday announced the opening of a competitive student loan reimbursement program for recent graduates working in STEM (Science, Technology, Engineering, and Mathematics) and certain design fields.

"A thriving STEM workforce is vital to jump-starting our economic comeback," said Raimondo. "We are taking steps to keep our most talented people here, and attract others to start their careers in Rhode Island. The Wavemaker Fellowship is a creative solution to helping professionals with their college debt, while giving companies an important recruiting tool."

The Wavemaker Fellowship awards graduates who choose to work in STEM jobs in Rhode Island with a refundable tax credit that can cover student loan payments for up to four years.

• For the announcement, click here.
• For the website and application, click here.
• For the FAQs, click here.

The Division of Taxation earlier this year issued a regulation on the Wavemaker tax credit program. 

Proposed regulation on hotel, sales taxes

The Rhode Island Division of Taxation has posted a proposed regulation involving sales and hotel taxes and will hold a public hearing on it on May 31.

The agency proposes to update an existing regulation so that it reflects changes in the law enacted last year. Those changes extended the sales and hotel taxes to short-term residential rentals.

The proposed regulation discusses room rentals – by hotels, rooming homes, tourist camps, room resellers, and hosting platforms. 

Report on sales, taxation of alcoholic beverages

The Rhode Island Division of Taxation this afternoon posted its annual report on the sales and taxation of alcoholic beverages.

Penalty for falling behind on payments

The Division of Taxation today posted the latest Administrative Decision. At issue is a former cigarette dealer who fell behind on making certain payments to the Division under an installment plan. 

Three new Administrative Decisions

The Division of Taxation has posted three new Administrative Decisions:

• 2016-07 -- filing a personal income tax return after a federal change. 
• 2016-08 -- whether a use tax refund should have been issued on a motor vehicle purchase.
• 2016-09 -- whether a personal income tax refund claim was timely filed.

Tax credits for project in Olneyville

The Rhode Island Division of Taxation has posted details about the rehabilitation of a building in the Olneyville section of Providence.

The project, at a former Imperial Knife Company manufacturing plant at 60 King St., involves Rhode Island historic preservation tax credits. The building will be converted to 60 affordable apartments.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program.

Practitioner Alert: New cyber threat

Rhode Island Acting Tax Administrator Neena S. Savage is providing the following announcement from the Internal Revenue Service to inform Rhode Island tax practitioners of a developing tax fraud scheme. 

The Rhode Island Division of Taxation is actively involved in responding to the IRS announcement, she said. “The Division of Taxation will continue to collaborate with its stakeholders to safeguard Rhode Island taxpayers and tax dollars,” she said.

(Please see IRS announcement below)

The Internal Revenue Service today warned tax professionals of a new emerging scam: Cyber-criminals obtain remote control of preparers’ computer systems, then complete and file client tax returns -- and redirect refunds to the thieves’ own accounts. 

Although the IRS knows of a handful of cases to date, this scam has potential to impact the filing of fraudulent returns in advance of the April tax deadline. The scam is yet another example of tax professionals being targeted by identity theft criminals.

The scam warning comes as the April 18 filing deadline nears. The IRS urged all tax preparers to take the following steps:

• Run a security “deep scan” to search for viruses and malware;
• Strengthen passwords for both computer access and software access;
• Make sure your password is a minimum of 8 digits (more is better) with a mix of numbers, letters and special characters;
• Be alert for phishing scams: do not click on links or open attachments from unknown senders;
• Educate all staff members about the dangers of phishing scams in the form of emails, texts and calls;
• Review any software that your employees use to remotely access your network and/or your IT support vendor uses to remotely troubleshoot technical problems and support your systems. Remote access software is a potential target for bad actors to gain entry and take control of a machine. 

The IRS also urged tax professionals to review Publication 4557, "Safeguarding Taxpayer Data, A Guide for Your Business," which provides a checklist to help safeguard taxpayer information and enhance office security.

Latest edition of newsletter now posted

The latest edition of Rhode Island Tax News, a newsletter for tax professionals, has now been posted. Topics include:

• The sales and hotel tax on short-term rentals
• A tax break on Social Security benefits
• Letters of good standing
• Rhode Island’s Free File program
• Refunds of TDI tax

 This edition also features a summary of recent tax cases, as well as questions and answers for practitioners.

Tax credits for project in Providence

The Rhode Island Division of Taxation has posted details about the rehabilitation of a building on historic South Main Street in Providence. The project involves Rhode Island historic preservation tax credits.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program.

Tax-filing deadline, refunds, resources

The Rhode Island Division of Taxation today posted an Advisory which includes information on the following topics:

• April 18 filing deadline;
• Electronic filing;
• Tax refunds;
• Refund fraud;
• How to contact the Division; and
• Resources for taxpayers.

Deadline tomorrow to register for tax seminar

The Rhode Island Division of Taxation will hold a statewide seminar on Friday about taxes on short-term residential rentals, including the rental of vacation homes, beach cottages, and rooms.

The seminar is open to landlords, property owners, property managers, real estate agents, tax professionals, and others. Those who attend the seminar will receive a Certificate of Completion. (The Certificate of Completion will show 2.0 continuing education credits, based on a 50-minute hour.)

The Division of Taxation reminds stakeholders that the statewide seminar will be held in Newport and is being offered free of charge, but because seating is limited, advance registration is required. The deadline for registering is 12:00 noon tomorrow – Thursday. 

Click here for more information, including how and where to register.

Administrative decisions on refund claims, tax credit

The Division of Taxation has posted four new Administrative Decisions:

• 2016-03 -- whether a personal income tax refund claim was timely filed.
• 2016-04 -- whether a personal income tax refund claim was timely filed.
• 2016-05 -- eligibility for the statewide property-tax relief credit.
• 2016-06 -- whether a personal income tax refund claim was timely filed.

Division urges businesses to be wary of scam

The Rhode Island Division of Taxation yesterday publicly cautioned Rhode Island businesses owners about a scam in which individuals claim to be collections agents of the Rhode Island Division of Taxation and request immediate payment.

The Division of Taxation does not request cash or other payment by businesses upon demand by visiting businesses in person.

The Division of Taxation has temporarily ceased any in-person collection activity in response to this scam.

To learn more, click here.

Seminar about taxes on short-term residential rentals

The Rhode Island Division of Taxation reminds property owners, real estate agents, tax professionals, and others about a statewide seminar to be held on April 1.

The statewide seminar, which will take place in Newport, will be about taxes on short-term residential rentals. Because space is limited, pre-registration is required. To learn more, click here. 

FAQs on combined reporting and related topics

The Rhode Island Division of Taxation has posted answers to frequently asked questions (FAQs) about combined reporting and related subjects. The FAQs focus on practical issues, such as what forms and schedules to use, the new seven-month extension rule, e-filing, estimated payments, the minimum tax, and other topics. 

In addition, the agency has posted, as final, a regulation on combined reporting.

The agency has a web page which provides more detailed information about combined reporting and related topics. 

Practitioner Update: Schedule CRS

The Rhode Island Division of Taxation has finalized Schedule CRS, posted it on its website, and made it available to tax software providers.

The Division of Taxation is in the process of finalizing the instructions for Schedule CRS and hopes to post the finalized version on its website within the next week or so. A draft is available on the agency's website, providing interim guidance.

Schedule CRS is important for combined groups that are subject to Rhode Island's new mandatory unitary combined reporting regime. For those groups, Schedule CRS will be filed as an integral part of Form RI-1120C.

Combined reporting applies to tax years beginning on or after January 1, 2015. A number of tax practitioners will encounter it this year, as they prepare tax year 2015 returns.

Seminar in Newport on short-term residential rentals

The Rhode Island Division of Taxation will hold a seminar in Newport next month about taxes on short-term residential rentals. The seminar will be held on Friday, April 1, 2016, from 10:00 a.m. to 12:00 noon at the Community College of Rhode Island’s Newport County campus.

The seminar is open to property owners, real estate agents, tax professionals, and others. Division of
Taxation representatives will:

• explain how the new taxes work;
• discuss how the new taxes apply;
• explain the registration, filing and payment requirements; and
• answer questions.

For registration and other information, click here.

Tax credits for project in downtown Providence

The Rhode Island Division of Taxation has posted details about the rehabilitation of a five-story brick building in downtown Providence. The project, on Custom House Street, involves Rhode Island historic preservation tax credits.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program. 

Narragansett seminar on short-term residential rentals

The Rhode Island Division of Taxation on Friday held a seminar in Narragansett to provide guidance on the expansion of sales and hotel taxes to short-term rentals of residential property, including the rental of vacation homes and beach cottages.

More than 100 property owners, real estate agents, and others attended the seminar, which was held at Narragansett Town Hall and organized by the Division of Taxation and the Rhode Island Association of Realtors. For those unable to attend, a video of the event is available online, on the Narragansett Town Council channel on YouTube (see screenshot below).The documents presented at the seminar are also online, at the Division of Taxation website.

It is the fifth such seminar that the Division of Taxation has held. Others have taken place in New Shoreham, Narragansett, Cranston, and Newport.

Susanna Coburn (left), Donald Englert, and Theriza Iafrate of the Rhode Island Division of Taxation

Regulation on Wavemaker tax credit program

The Rhode Island Division of Taxation has posted, as final, its regulation on tax credits under the new Wavemaker Fellowship Program.

The program, which was proposed by Governor Gina M. Raimondo and approved by the General Assembly in 2015, is intended to provide an incentive to keep educated individuals in the state.

The tax credits will help qualifying applicants, who have graduated from college and who meet program rules, to pay their higher education loans. The credits can be applied against the Rhode Island personal income tax. 

• Successful applicants must demonstrate a 12-month service period that begins upon receipt of the award. Thus, the credits will not apply for filing 2015 returns. The earliest the credits can be claimed is in early 2017, for the 2016 tax year. Still, tax professionals will want to be familiar with the program for tax-planning purposes.
• The Division of Taxation regulation mirrors one posted by the Rhode Island Commerce Corporation and takes effect March 14, 2016. For more information about the program, see the Commerce Corporation website.

Governor announces choice for DOR director

Rhode Island Governor Gina M. Raimondo yesterday announced Robert S. Hull as her choice to lead the Rhode Island Department of Revenue (DOR). 

The DOR oversees a number of agencies, including the Rhode Island Division of Taxation. For more information on Governor Raimondo's announcement, click here.

Rhode Island Attorney General warns of tax scam

Rhode Island Attorney General Peter F. Kilmartin today reminded consumers to be aware of the signs of the pervasive "IRS scam," which continues to target law-abiding citizens in Rhode Island and across the nation.

Attorney General Kilmartin noted that his office has recently noticed an increase in calls from Rhode Islanders who had been contacted by the scammers posing as IRS agents. The caller typically threatens an individual with arrest for nonpayment of taxes and demands immediate payment over the phone.

According to a recent report, the U.S. Treasury Inspector General for Tax Administration (TIGTA) has "received reports of roughly 896,000 contacts since October 2013 and has become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam." TIGTA has stepped up its efforts to educate the public on how to spot the scam with the release of a new public service announcement, available in English and in Spanish.

For more information about the scam, including how to handle the scam if you are targeted, and where to report it, click here.

Administrative decisions involve tax credit, tobacco

The Division of Taxation has posted two new Administrative Decisions:

• 2016-01 considers if a certain tax credit can be applied against the personal income tax.
• 2016-02 looks at whether tax was properly assessed on "other tobacco products".

Newsletter looks at tax year 2016

The latest edition of Rhode Island Tax News, a newsletter for tax professionals, has now been posted. It focuses on changes for tax year 2016, as well as other topics. Among the highlights:

• A reduction in the corporate minimum tax
• A reduction in the filing fee for pass-through entities
• An increase in the earned income credit
• Interest rates for 2016
• A national award involving employer tax administration
• Arrests involving tobacco

E-filing business returns

The Rhode Island Division of Taxation is on track to allow the electronic filing of business returns on or before March 1, 2016.

“The Division is nearing completion of its annual testing of electronic formats for business returns and is working closely with software providers on their electronic forms,” Acting Tax Administrator Neena S. Savage said in an Advisory for Tax Professionals issued on February 9.

(Separate rules apply this season to filers of insurance gross premiums and surplus line broker returns.)

Practitioner Alert: ERSRI Form 1099-R

The Division of Taxation today issued the following Practitioner Alert:

The Employees' Retirement System of Rhode Island (ERSRI) recently advised its members that the Form 1099-R they initially received in the mail for tax year 2015 inadvertently omitted certain information and should be discarded.

An updated Form 1099-R for tax year 2015, containing all of the necessary information, was mailed January 27, 2016. The correct version of the form includes all of the following: 

• The federal tax identification number for the Employees’ Retirement System of Rhode Island;
• State income tax withholding for 2015 (if state income tax withholding was elected);
• The return mailing address of the Employees’ Retirement System of Rhode Island; and
• An account number in the bottom right-hand corner of the form.

Members also may view and print the correct version of the Form 1099-R by logging into their account at the ERSRI website, http://www.ersri.org. Those with questions may call the agency at (401) 462-7600.

Returns for insurance companies, surplus lines brokers

Insurance companies and surplus lines brokers/licensees must file their tax year 2015 returns directly with the Rhode Island Division of Taxation.

The returns may no longer be filed through the Online Premium Tax for Insurance system, otherwise known as OPTins.

Details are included in an Advisory for Tax Professionals posted yesterday afternoon on the Division of Taxation website.

Tax credits for rehab of former mill in Providence

The Rhode Island Division of Taxation has posted details about the rehabilitation of a former mill in Providence, a project that involves Rhode Island historic preservation tax credits.

The Division of Taxation's web page on historic tax credits shows details involving all applicants that have signed a contract and paid the required fee under the state's 2013 historic preservation tax credit program. 

Proposed regulation on combined reporting

The Rhode Island Division of Taxation has posted a proposed corporate tax regulation involving mandatory unitary combined reporting.

It is a revised version of the proposed regulation for which a public hearing was held last month. Although there are no major differences between the versions, there are enough differences to warrant a re-posting and a second public hearing, said Acting Tax Administrator Neena S. Savage.

“We believe that stakeholders will find no major differences, but we nevertheless are re-posting the regulation and scheduling a second public hearing in the interest of transparency, and to keep everyone informed,” she said. 

Tax-filing season opens

The Rhode Island Division of Taxation today began accepting electronically filed personal income tax returns for tax year 2015, signaling the official opening of tax-filing season. More details are contained in an advisory for tax professionals which was issued today by the Division of Taxation. Please click here to view it.

Special edition of newsletter: filing season

The Rhode Island Division of Taxation today posted a special edition of its newsletter, Rhode Island Tax News. It focuses on what’s new for tax-filing season. Topics include:

• The April 18 filing deadline;
• New security and safeguard procedures;
• An increase in the property-tax relief credit;
• A change in the earned income credit formula;
• A reduction in the corporate income tax rate; and
• An extended due date for C corporations.

Deadline tomorrow for payments, filings

Tomorrow is the deadline for making fourth-quarter estimated payments of Rhode Island personal income tax.

Payment must be made or postmarked by 11:59 p.m. on Friday, January 15, 2016. If you don’t have your own estimated tax coupons, blank copies are available on the Division of Taxation website.

• January 15 is also the deadline for fourth-quarter estimated payments of income tax for calendar-year fiduciary filers (involving estates and trusts), pass-through withholding filers, and composite return filers.
• January 15 is also the reporting deadline for those subject to the bank deposits tax.

Proposed regulation on Wavemaker credit

The Rhode Island Division of Taxation yesterday posted a proposed regulation on tax credits under the new “Stay Invested in RI Wavemaker Fellowship” program.

The program, which was proposed by Governor Gina M. Raimondo and approved by the General Assembly in 2015, is intended to provide an incentive to keep educated individuals in the state.

The tax credits are to help qualifying applicants, who have graduated from college and who meet program rules, to pay their higher education loans. The credits can be applied against the Rhode Island personal income tax.

A public hearing on the proposed regulation is scheduled to be held at 10:30 a.m. on February 11, 2016, in Conference Room B at the Powers Building (Department of Administration building), One Capitol Hill, Providence, R.I. The hearing will be held in conjunction with the Rhode Island Commerce Corporation.

Details about public comments and other matters are contained in the proposed regulation, which was filed with the Rhode Island Secretary of State. The proposed regulation mirrors one filed by the Commerce Corporation. To view it, please click here.

Some tax forms now available for download

The Division of Taxation is advising tax professionals that it has posted a number of forms, schedules, and other documents in advance of the filing season, which starts later this month. For details, click here.