Scams involving stimulus payments

Legislation approved by Congress and signed into law on Friday by President Donald J. Trump authorizes federal stimulus payments to those who qualify. 

The Internal Revenue Service is seeing a significant increase in scams involving criminals trying to gather information needed for the stimulus payments.  

The IRS -- one of the Rhode Island Division of Taxation's partners in the Security Summit -- reports that it is seeing phone calls, text messages, and e-mails phishing for information from individual taxpayers as well as tax preparers.  

The criminals are sending messages such as the following: "In order to receive your  stimulus payment via direct deposit, we need you to confirm the banking information." 

The criminals are gathering the information via telephone, or directing victims to click on a link that takes them to a website where they enter their banking information. The criminals then use the information to raid people's bank accounts or for other illegal purposes.

Government agencies, including the IRS and the Rhode Island Division of Taxation, will not call, text, or email you requesting information about the federal stimulus payments.

Tax preparers are urged to beware of phishing calls, emails, or texts that include language such as: “In order to receive your client’s stimulus payment by direct deposit, you must confirm their bank information.” 

More information

• If you receive a suspicious email or text requesting information, report it. Do not click on links or open any attachments.
• If clients need to file a return to receive a stimulus payment, there may be more fraudulent zero balance or small balance returns filed.
• Due to the extended July 15 tax deadline, criminals may try to obtain clients’ personal information, then file returns before clients do.
• For details on federal stimulus payments, see the IRS's latest announcement. Also, monitor the IRS Coronavirus Tax Relief webpage.
• For information related to Rhode Island state taxes, see the Division's coronavirus webpage.

(Editor's Note: The Rhode Island Division of Taxation does not have a role in issuing the new federal stimulus payments and is providing the information above as a public service for taxpayers and tax preparers.)

Many hearings to be postponed due to coronavirus

In light of the ongoing state of emergency related to the coronavirus pandemic, many Rhode Island Division of Taxation hearings and other matters scheduled to take place in the coming weeks must be postponed and rescheduled.

For information about the impact on preliminary reviews, administrative hearings, and prehearing & status conferences, see Notice 2020-02.

Announcement for hotels and others

The Rhode Island Division of Taxation is asking hotels, owners of vacation properties, and others to let their customers know about Rhode Island’s new self-quarantine requirements and procedures in light of the coronavirus (COVID-19).

The Division’s latest Advisory includes a copy of the notice to hotels and others, as well as a copy of the letter they are asked to provide their guests arriving in Rhode Island, and an addendum. To view the Advisory, which has been revised to include the latest documents, please click here.

Deadline for filings and payments moved to July 15

The deadline for Rhode Island state tax filings and payments, normally April 15, has been postponed to July 15 this year due to the coronavirus pandemic.

No late charges will apply to those who file and pay by the new deadline of July 15, 2020, regardless of the amount. The relief is automatic; no additional steps need be taken by taxpayers or tax preparers. 

For details, please click here.

New ruling posted -- involves estate tax

The Division of Taxation was asked to rule on whether certain settlement proceeds are akin to wrongful death claims or loss of consortium claims and therefore shouldn't count as assets for purposes of a decedent's estate. To view Declaratory Ruling 2020-02, click here.

April filing deadline

In conjunction with announcements made today by United States Treasury Secretary Steven T. Mnuchin and Rhode Island Governor Gina M. Raimondo involving the April 15, 2020, deadline for certain tax filings and tax payments, the Division of Taxation will mirror the federal extensions and is awaiting the issuance of written guidance from the Internal Revenue Service. The Division intends to post further guidance as soon as possible on the agency’s special webpage: www.tax.ri.gov/COVID.

New Administrative Decisions

The Division of Taxation has posted its latest Administrative Decisions.

• Decision 2020-02 concerns whether a taxpayer's request for a refund from its sales and use taxes should be denied.
• Decision 2020-03 focuses on whether the Division should disallow a modification that the taxpayers made for Rhode Island personal income tax purposes.

E-filing schedule on Sunday

The Internal Revenue Service has announced that the modernized e-file (MeF) system will be temporarily unavailable for a time on Sunday due to maintenance. As a result, federal and Rhode Island e-filing will be unavailable during the period.

The MeF system will be shut down due to maintenance from 12:01 a.m. Eastern time through 10:00 a.m. Eastern time on Sunday, March 22, 2020.

The IRS will not be accepting electronically filed federal tax returns during the period. Also, the joint fed-state e-file program will be unavailable during the period. Therefore, Rhode Island returns transmitted via e-file during the period will not be transmitted to the state. Tax preparers and taxpayers should plan accordingly.

New webpage for tax-related issues amid coronavirus outbreak

The Rhode Island Division of Taxation reminds taxpayers and tax preparers that it has created a webpage to address tax-related issues amid the coronavirus outbreak.

When virus-related developments occur regarding Rhode Island state taxes, including any changes to deadlines, the Division will post them on the special webpage (see screenshot below). For more information, click here. To go directly to the webpage, click here.

Help available for businesses; sales tax obligations

The Rhode Island Division of Taxation understands the difficulty that many businesses, including small businesses and retailers, are facing during this unprecedented crisis.

To that end, the Division would like to remind businesses that the Rhode Island Commerce Corporation has information about low-interest federal disaster loans for working capital to Rhode Island small businesses that are suffering substantial economic injury as a result of the coronavirus. For details, including links to applications, hotlines, and other resources, click here.

The Division also would like to remind businesses that the deadline is tomorrow -- Friday, March 20, 2020 -- for remitting sales tax, meals and beverage tax, and certain other levies. These amounts represent taxes that the businesses’ customers paid during February 2020 and that the businesses held in trust, by law, for remitting to the State of Rhode Island. For more information about the penalties for misappropriating these amounts, please see Rhode Island General Laws Sections 44-19-35 through 37.

The Division also would like to remind businesses and other taxpayers that under Regulation 280-RICR-20-00-4 (“Taxpayer Rights and Responsibilities “), they have the express right to request that penalties be abated where there was no negligence or intentional disregard of the law.

Many taxpayers eligible for Free File program

To protect the public and volunteers from the coronavirus, a number of volunteer tax-preparation sites have had to halt their in-person services temporarily.

But many taxpayers are still eligible to file their federal and Rhode Island tax returns online themselves, at no charge, through the Free File program on the Rhode Island Division of Taxation website. To view the site, click here.

New scam targets tax professionals

The Internal Revenue Service has identified a new version of a phishing email scam targeting tax professionals. The fake email states the preparer’s EFIN has been put on a temporarily hold and warns the EFIN will be suspended unless the preparers open an embedded document and confirm or deny that they submitted the Form 1040. The embedded “1040” document likely contains malware.

The IRS reminds all tax professionals that they are targets of cybercriminals seeking to steal client data or the practitioners’ identities. Thieves use many variations of phishing emails such as this. The fake emails are characterized by an urgent message (your EFIN will be suspended) and try to entice recipients to open a link or attachment. The IRS urges all tax professionals to be on alert and take security steps to protect their clients and their businesses. Review IRS Publication 4557, Safeguarding Taxpayer Data, for how to be safer.

Some simple steps include:

• Using the multi-factor authentication option offered by tax software to protect accounts from unauthorized access.
• Using strong password protections on all devices.
• Never open suspicious emails, links and attachments -- they may carry malware.
• Use strong security software and keep it updated.

Division of Taxation reviewing today's IRS guidance

The Rhode Island Division of Taxation is reviewing guidance that was issued earlier today by the United States Treasury and Internal Revenue Service and will be posting updates soon.

• For today's United States Treasury guidance, click here.
• For IRS Notice 2020-17, click here.

Division creates webpage to address tax issues related to virus

The Rhode Island Division of Taxation has created a special webpage to address tax issues related to the coronavirus outbreak. For more information, click here. To view the page, click here.

Two regulations now in effect

Two Rhode Island Division of Taxation regulations -- one involving employer withholding, the other having to do with paying taxes by electronic funds transfer -- are now in full effect.

The Division amended Regulation 280-RICR-20-55-10 ("Employers' Withholding") mainly to provide more clarity to employers and to reflect current developments in Rhode Island withholding law. The public comment period is over and the regulation is now final. To view the regulation, click here.

The Division amended Regulation 280-RICR-20-30-1 ("Payment of Taxes by Electronic Funds Transfer") mainly so that it reflects the latest changes to Rhode Island law involving withholding tax returns and payments. (Certain employers are now required to submit withholding tax returns and payments by electronic funds transfer or other electronic means.) The public comment period is over and the regulation is now final. To view the regulation, click here.

Division urges taxpayers to reduce in-person visits, use website, phones, and email instead

The Rhode Island Division of Taxation urges taxpayers to use its website, portal, email, and phone system -- and to avoid visiting the Division of Taxation's office -- in order to limit the spread of the coronavirus. For more information, including a list of frequently used phone numbers, email addresses, and web addresses, please click here.

Reminder about notices for early filers

The Rhode Island Division of Taxation has posted a reminder for tax preparers and others about entities that file their Rhode Island returns electronically early -- with no payment accompanying the filing, as the tax is not due until the actual due date of the return. To view the reminder, click here.

Tax regulation takes effect

A regulation involving the tax on hard-to-dispose materials and the tax on beverage containers has now taken full effect.

The regulation (280-RICR-20-45-2) was amended by the Division of Taxation mainly to reflect tax increases that were enacted in July 2019. One increase involved the tax that is levied on hard-to-dispose material, such as lubricating oils, antifreeze, and tires. The other increase was for the tax levied on each case of beverage containers sold by beverage wholesalers. 

To view the regulation as amended, click here.

Deadline is March 16 for certain entities

The  Rhode  Island  Division  of  Taxation  reminds  tax  professionals,  business entities, and others that the deadline this year for filing and payments for a number of different entities will fall on Monday, March 16. For more information, click here.

FAQs about employer withholding tax

The Rhode Island Division of Taxation has posted answers to frequently asked questions (FAQs) about changes involving employer withholding tax. The changes took effect January 1, 2020. To view the FAQs, click here. 

File your returns online at no charge

Reminder: Many taxpayers are eligible to file their federal and Rhode Island tax returns online, at no charge, through the Free File programs on the Rhode Island Division of Taxation website. To learn more, click here.