2014 -- S 2463

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LC004875

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     

     Introduced By: Senators Lombardi, Ciccone, Pearson, Conley, and McCaffrey

     Date Introduced: February 27, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 44-30-83 of the General Laws in Chapter 44-30 entitled "Personal

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Income Tax" is hereby amended to read as follows:

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     44-30-83. Limitations on assessment. -- (a) General. - Except as otherwise provided in

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this section the amount of the Rhode Island personal income tax shall be assessed within three (3)

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years after the return was filed, whether or not the return was filed on or after the prescribed date.

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For this purpose a tax return filed before the due date shall be considered as filed on the due date;

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and a return of withholding tax for any period ending with or within a calendar year filed before

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April 15 of the succeeding calendar year shall be considered filed on April 15 of the succeeding

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calendar year.

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      (b) Exceptions.

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      (1) Assessment at any time. - The tax may be assessed at any time if:

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      (i) No return is filed;

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      (ii) A false or fraudulent return is filed with intent to evade tax; or

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      (iii) The taxpayer fails to file a report, pursuant to section 44-30-59, of a change,

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correction, or amended return, increasing his or her federal taxable income as reported on his or

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her federal income tax return or to report a change or correction which is treated in the same

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manner as if it were a deficiency for federal income tax purposes.

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      (2) Extension by agreement. - Where, before the expiration of the time prescribed in this

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section for the assessment of tax, or before the time as extended pursuant to this section, both the

 

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tax administrator and the taxpayer have consented in writing to its assessment after that time, the

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tax may be assessed at any time prior to the expiration of the period agreed upon.

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      (3) Report of changed or corrected federal income. - If the taxpayer shall, pursuant to

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section 44-30-59, file an amended return, or report a change or correction increasing his or her

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federal taxable income or report a change or correction which is treated in the same manner as if

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it were a deficiency for federal income tax purposes, an assessment may be made at any time

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prior to two (2) years after the report or amended return was filed. This assessment of Rhode

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Island personal income tax shall not exceed the amount of the increase attributable to the federal

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change, correction, or items amended on the taxpayer's amended federal income tax return. The

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provisions of this paragraph shall not affect the time within which or the amount for which an

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assessment may otherwise be made.

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      (4) Deficiency attributable to net operating loss carryback. - If a taxpayer's deficiency is

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attributable to an excessive net operating loss carryback allowance, it may be assessed at any time

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that a deficiency for the taxable year of the loss may be assessed.

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      (5) Recovery of erroneous refund. - An erroneous refund shall be considered to create an

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underpayment of tax on the date made. An assessment of a deficiency arising out of an erroneous

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refund may be made at any time within three (3) years thereafter, or at any time if it appears that

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any part of the refund was induced by fraud or misrepresentation of a material fact.

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      (6) Armed forces relief. - For purposes of this tax, the date appearing in 26 U.S.C.

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section 692(a) shall be January 1, 1971.

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      (c) Omission of income on return. - Notwithstanding the foregoing provisions of this

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section, the tax may be assessed at any time within six (6) years after the return was filed if an

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individual omits from his or her Rhode Island income an amount properly includible therein

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which is in excess of twenty-five percent (25%) of the amount of Rhode Island income stated in

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the return. For this purpose there shall not be taken into account any amount which is omitted in

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the return if the amount is disclosed in the return, or in a statement attached to the return, in a

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manner adequate to apprise the tax administrator of the nature and amount of the item.

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      (d) Suspension of limitation. - The running of the period of limitations on assessment or

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collection of tax or other amount (or of a transferee's liability) shall, after the mailing of a notice

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of deficiency, be suspended for the period during which the tax administrator is prohibited under

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section 44-30-81(c) from making the assessment or from collecting by levy, and for sixty (60)

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days thereafter.

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      (e) Limitations exclusive. – (1) No period of limitations specified in any other law shall

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apply to the assessment or collection of Rhode Island personal income tax.

 

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     (2) Any collection action by the tax administrator for personal income tax due and

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payable must be commenced within ten (10) years of April 15 of the year the tax return was or

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should have been filed.

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     SECTION 2. This act shall take effect on January 1, 2015.

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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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     This act would require the tax administrator to commence any action for collection of

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personal income tax due and payable within ten (10) years of April 15 of the year the tax return

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was or should have been filed.

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     This act would take effect on January 1, 2015.

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