Security Summit; FAQs on short-term rentals

FTC's Safeguards Rule

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to be aware of their obligations -- including the Federal Trade Commission's Safeguards Rule -- to protect client data. To view, click here.

FAQs on short-term rentals

The Division of Taxation has updated its publication involving short-term residential rentals. "Sales and hotel taxes on short-term residential rentals: FAQs" was revised mainly to provide updated links to certain documents. To view, click here.

Tax credit and incentive 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 14 businesses that received a combined total of approximately $14 million in certain state tax credits and incentives for the fiscal year ended June 30, 2018. 

• Three of those recipients also received a combined total of approximately $4 million in other Rhode Island tax credits and incentives, the report shows. To view the report, click here.

Section 965 and combined reporting

If filing a combined return, and more than one entity in the combined group has deferred foreign income (“Section 965 income”) for Rhode Island tax purposes for the 2017 tax year, should a Rhode Island Schedule 965 (“965 Transition Tax Statement”) be included in the filing for each entity, or should the filing include a single Rhode Island Schedule 965 that includes the combined Section 965-related amounts for all the entities?

The answer is that the filing must include a single Rhode Island Schedule 965, showing the combined Section 965-related amounts for all the entities. Although the Rhode Island Schedule 965 will include only the combined amounts for all the entities, you must nevertheless create a spreadsheet or other such document listing the underlying detail for each of the entities. That spreadsheet or other such document must be kept on file and made readily available should the Division require the information at a later date.

Education for tax office employees

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to step up security education for all office employees to better protect taxpayer data and help prevent fraudulent return filings.

• There's been a 30 percent increase this year in reports of data thefts from tax professionals. The Security Summit partners remind tax professionals that their clients’ data and their businesses are only as secure as their least-informed employee. To learn more, click here.

Recent developments

Administrative Decision

The Rhode Island Division of Taxation has posted its latest Administrative Decision. This one looks at whether a sales/use tax refund should be issued when a newly purchased car is returned. To learn more, click here.

EFINs, PTINs, and CAFs

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit remind tax professionals to maintain, monitor, and protect their Electronic Filing Identification Numbers (EFINs), and keep tabs on their Preparer Tax Identification Numbers (PTINs) and Centralized Authorization File (CAF) numbers.

Savvy cybercriminals are targeting these IRS-issued identification numbers as part of an effort to impersonate tax professionals. Thieves use stolen data from tax practitioners to create fraudulent returns that can be harder to detect and harder to distinguish from legitimate taxpayer returns. To learn more, click here.

Tax professionals offer tips on data safety

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit are sharing lessons learned by victims in the tax community to help others avoid being targeted by identity thieves. To learn more, click here.

Section 965

The Rhode Island Division of Taxation has filed, as final, a regulation that provides guidance to C corporations and their advisors on how to report Section 965 income for Rhode Island tax purposes.

In addition, the Division has posted Rhode Island Schedule 965 (“965 Transition Tax Statement”) and a related Advisory.

• To view the Advisory, click here. 
• To view the Regulation, click here.
• To view Rhode Island Schedule 965, click here.

Section 965 information for software vendors

The Division of Taxation has updated its schema to allow for the e-filing of Rhode Island Schedule 965.

Section 965 information for tax preparers

It is up to each software vendor to determine whether to reconfigure tax year 2017 software to allow for the e-filing of Rhode Island Schedule 965.

If Rhode Island Schedule 965 is not available as part of your tax preparation software, you may download the schedule from the Division’s website and attach a completed copy as a PDF when e-filing your client’s return (assuming that your software allows for PDF attachments).

If you have Section 965 income, make sure that the amount on Line 5 of the Rhode Island Schedule 965 carries over to line 1 of Form RI-1120C (“Business Corporation Tax Return”). Please also see the filing instructions on the schedule.

Recent developments

Administrative Decision

The Rhode Island Division of Taxation has posted its latest Administrative Decision. This one deals with whether a taxpayer's personal income tax refund for 2014 should have been denied. To view the document, click here.

Security Summit

The Rhode Island Division of Taxation, the Internal Revenue Service, and other partners in the Security Summit urge tax professionals to beware of spear-phishing email. Use of such email is the most common method that data thieves use to enter a practitioner’s digital networks and steal client information. To learn more, click here.