Rhode Island Offers Tax Amnesty

The Rhode Island Division of Taxation will be offering a Tax Amnesty Program beginning on July 15, 2006 and ending on September 30, 2006.

Tax amnesty is an opportunity to clear up any unpaid tax obligations relative to taxes payable to the State of Rhode Island and collected by the Tax Administrator.

All unpaid penalties will be waived for eligible applicants and eligible taxes upon payment of all tax and interest amounts. In addition, the Tax Administrator shall not seek civil or criminal prosecution for any taxpayer for the taxable period for which amnesty has been granted.

Amnesty covers the penalties imposed under any tax payable to the State of Rhode Island and collected by the Tax Administrator.

Previously billed tax liabilities will be eligible for tax amnesty.

Neither a taxpayer who is under criminal investigation, nor a taxpayer who is involved in any pending criminal or civil court litigation in any court of the United States or the State of Rhode Island for fraud in relation to any state tax imposed by any law of the State of Rhode Island and collected by the Tax Administrator is eligible for amnesty.

A taxpayer who can substantiate a severe financial hardship may apply for an amnesty installment plan upon the terms and conditions set by the Tax Administrator. If a taxpayer fails to pay any installment at the time such installment payment is due under such agreement, the agreement shall cease to be effective and the balance of the amounts required to be paid thereunder shall be due immediately. If an installment payment is approved, fifty percent of the amount due should be paid upon application, with the balance to be paid in two equal monthly installments.

As of October 1, 2006, the interest rate on unpaid taxes will increase to eighteen percent (18%).

Taxpayers who do not apply for amnesty and are later convicted of fraud or willful intent to evade Rhode Island taxes would be subject to a $10,000 fine or one (1) year imprisonment or both.

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