Hundreds seek tax amnesty in R.I.

More than 700 people applied for Rhode Island’s new tax-amnesty program during its first three weeks, lured by the promise that those who agree to pay up won’t face most of the harsh penalties that typically await tax delinquents.
“Our tax-amnesty program is proving to be very popular,” Rhode Island Tax Administrator David M. Sullivan said in a news release last week. It’s also been a boon to a state sorely in need of revenue, having generated more than $2.7 million in payments so far, according to state tax officials.
Those considering applying shouldn’t wait, warn tax officials. The 75-day tax-amnesty program that began Sept. 2 will end Nov. 15.
In exchange for payment of back taxes, the state in most cases will waive penalties; reduce interest by 25 percent; agree not to pursue civil or criminal penalties and won’t block attempts by applicants to renew a driver’s license, professional license, registration, or sales tax permit.
The program is open to all taxpayers who are delinquent on any state taxes, including personal income tax, sales and use tax, corporate income tax and unemployment insurance tax. It was included as part of the fiscal 2013 state budget approved by Gov. Lincoln D. Chafee.
For small businesses struggling to make ends meet, the program could provide much-needed relief. For the state it could mean an additional $10.9 million, according to the estimate in the fiscal 2013 state budget.
“We’ve just been through one of the most punishing recessions since the Great Depression,” Chafee said in announcing the program in August. “The recession was felt across our country and across the world; Rhode Island was not immune. Some businesses and individuals fell behind on their taxes – including their Rhode Island state taxes. For them, and for others who are delinquent on their state taxes, this is a perfect time to pay what they owe and get a fresh start.” Sullivan says state officials have “been meeting with tax preparers about the amnesty, and taking other steps to spread the word.”
Richard Streitfeld, a CPA and partner with Aaronson Lavoie Streitfeld Diaz and Co. of Cranston, said potential savings for applicants could be significant.
“What is unusual is that it is for any kind of tax; personal, corporate, unemployment and sales tax and the penalties and interest can really add up,” he said. “They are offering you something but you have to pay the whole thing you owe by Dec. 14. … For the people that don’t have any money, the relief will help.”
Taxpayers will not qualify for the program if they are under criminal investigation.
Taxpayers who have failed to report their taxes should consider whether to participate in the new amnesty program or alternatively, the state’s long-standing voluntary-disclosure program. Differences between the two include that voluntary disclosure requires more information to be provided by the applicant than the amnesty program. The amnesty program does not require a description of activities or an explanation for the delinquency.
Sullivan noted that the state tax division has created a special website – www.TaxAmnesty.ri.gov – that includes information about the amnesty program. More information is also available from the amnesty program’s call center, at (401) 574-8650, from 8:30 a.m. to 4 p.m. business days. Taxpayers may also email the amnesty program at
TaxAmnesty@tax.ri.gov. •

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