Rhode Island Introduces Self-Audit Program

On November 3, 2015, the Rhode Island Department of Revenue introduced a self-audit program. The self-audit program currently applies only to Rhode Island use tax, specifically consumer’s use tax. Those holding a Rhode Island sales tax permit currently cannot participate in the program. Retailers are not eligible for the program, and only non-retailers can participate. However, all taxpayers – including retailers – may eventually be eligible, and the program may be expanded to include sales tax. The Division of Taxation will make a formal announcement regarding any expansion of the program. No time limit has been announced for the self-audit program. Taxpayers will use a special form to apply for the program. If the application is approved, the Tax Division assigns a revenue agent, who mails the taxpayer a letter of confirmation as well as guidance for conducting the self-audit. If a taxpayer completes the audit in accordance with program guidelines, the results are approved, and the taxpayer pays the tax due, penalties and up to two-thirds of the interest will be waived. Interest at 6% instead of 18% per year will be assessed. Additionally, the Tax Division will agree not to audit the taxpayer for the tax type and time period involved in the self-audit. Businesses and individuals, whether resident or nonresident, may apply for the program. Unregistered taxpayers may also qualify for the Voluntary Disclosure program which may provide more beneficial results. For more information including the application, visit the Rhode Island Division of Taxation self-audit webpage. (Advisory 2015-20, Department of Revenue, Division of Taxation, November 3, 2015)

Posted on November 23, 2015