2020 -- S 2358 | |
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LC003483 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
RELATING TO TAXATION -- PERSONAL INCOME TAX | |
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Introduced By: Senators Lombardi, Conley, Lynch Prata, McCaffrey, and Goodwin | |
Date Introduced: February 13, 2020 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 44-30-83 of the General Laws in Chapter 44-30 entitled "Personal |
2 | Income Tax" is hereby amended to read as follows: |
3 | 44-30-83. Limitations on assessment. |
4 | (a) General. Except as otherwise provided in this section the amount of the Rhode Island |
5 | personal income tax shall be assessed within three (3) years after the return was filed, whether or |
6 | not the return was filed on or after the prescribed date. For this purpose a tax return filed before |
7 | the due date shall be considered as filed on the due date; and a return of withholding tax for any |
8 | period ending with or within a calendar year filed before April 15 of the succeeding calendar year |
9 | shall be considered filed on April 15 of the succeeding calendar year. |
10 | (b) Exceptions. |
11 | (1) Assessment at any time. The tax may be assessed at any time if: |
12 | (i) No return is filed; |
13 | (ii) A false or fraudulent return is filed with intent to evade tax; or |
14 | (iii) The taxpayer fails to file a report, pursuant to § 44-30-59, of a change, correction, or |
15 | amended return, increasing his or her federal taxable income as reported on his or her federal |
16 | income tax return or to report a change or correction that is treated in the same manner as if it |
17 | were a deficiency for federal income tax purposes. |
18 | (2) Extension by agreement. Where, before the expiration of the time prescribed in this |
19 | section for the assessment of tax, or before the time as extended pursuant to this section, both the |
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1 | tax administrator and the taxpayer have consented in writing to its assessment after that time, the |
2 | tax may be assessed at any time prior to the expiration of the period agreed upon. |
3 | (3) Report of changed or corrected federal income. If the taxpayer shall, pursuant to § 44- |
4 | 30-59, file an amended return, or report a change or correction increasing his or her federal |
5 | taxable income or report a change or correction that is treated in the same manner as if it were a |
6 | deficiency for federal income tax purposes, an assessment may be made at any time prior to two |
7 | (2) years after the report or amended return was filed. This assessment of Rhode Island personal |
8 | income tax shall not exceed the amount of the increase attributable to the federal change, |
9 | correction, or items amended on the taxpayer's amended federal income tax return. The |
10 | provisions of this paragraph shall not affect the time within which or the amount for which an |
11 | assessment may otherwise be made. |
12 | (4) Deficiency attributable to net operating loss carryback. If a taxpayer's deficiency is |
13 | attributable to an excessive net operating loss carryback allowance, it may be assessed at any time |
14 | that a deficiency for the taxable year of the loss may be assessed. |
15 | (5) Recovery of erroneous refund. An erroneous refund shall be considered to create an |
16 | underpayment of tax on the date made. An assessment of a deficiency arising out of an erroneous |
17 | refund may be made at any time within three (3) years thereafter, or at any time if it appears that |
18 | any part of the refund was induced by fraud or misrepresentation of a material fact. |
19 | (6) Armed forces relief. For purposes of this tax, the date appearing in 26 U.S.C. § 692(a) |
20 | shall be January 1, 1971. |
21 | (c) Omission of income on return. Notwithstanding the foregoing provisions of this |
22 | section, the tax may be assessed at any time within six (6) years after the return was filed if an |
23 | individual omits from his or her Rhode Island income an amount properly includible therein |
24 | which is in excess of twenty-five percent (25%) of the amount of Rhode Island income stated in |
25 | the return. For this purpose there shall not be taken into account any amount that is omitted in the |
26 | return if the amount is disclosed in the return, or in a statement attached to the return, in a manner |
27 | adequate to apprise the tax administrator of the nature and amount of the item. |
28 | (d) Suspension of limitation. The running of the period of limitations on assessment or |
29 | collection of tax or other amount (or of a transferee's liability) shall, after the mailing of a notice |
30 | of deficiency, be suspended for the period during which the tax administrator is prohibited under |
31 | § 44-30-81(c) from making the assessment or from collecting by levy, and for sixty (60) days |
32 | thereafter. |
33 | (e)(1) Limitations exclusive. No period of limitations specified in any other law shall |
34 | apply to the assessment or collection of Rhode Island personal income tax. Under no |
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1 | circumstances shall the tax administrator issue any notice of a deficiency determination for Rhode |
2 | Island personal income tax due or payable more than ten (10) years after the date upon which the |
3 | return was filed or due to be filed, nor shall the tax administrator commence any collection action |
4 | for any personal income tax due and payable unless the collection action is commenced within |
5 | ten (10) years after a notice of deficiency determination became a final collectible assessment; |
6 | provided however, that the tax administrator can renew a statutory lien that was initially filed |
7 | within the ten-year (10) period for collection actions. Both of the aforementioned ten-year (10) |
8 | periods are tolled for any period of time the taxpayer is in federal bankruptcy or state receivership |
9 | proceedings. "Collection action" refers to any activity undertaken by the division of taxation to |
10 | collect on any state tax liabilities that are final, due, and payable under Rhode Island law. |
11 | "Collection action" may include, but is not limited to, any civil action involving a liability owed |
12 | under chapter 30 of title 44. This section excludes any liabilities that are deemed trust funds as |
13 | defined in § 44-30-76, as amended. |
14 | (2) Any collection action by the tax administrator for personal income tax due and |
15 | payable must be commenced within ten (10) years of the year the tax return was or should have |
16 | been filed. |
17 | (f) The ten-year (10) limitation shall not apply to the renewal or continuation of the state's |
18 | attempt to collect a liability that became final, due, and payable within the ten-year (10) limitation |
19 | periods set forth in this section. |
20 | SECTION 2. This act shall take effect on January 1, 2021. |
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LC003483 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TAXATION -- PERSONAL INCOME TAX | |
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1 | This act would require the tax administrator to commence any action for collection of |
2 | personal income tax due and payable within ten (10) years of the year the tax return was or would |
3 | have been filed. |
4 | This act would take effect on January 1, 2021. |
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LC003483 | |
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