2019 -- S 0073

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LC000474

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TAXATION - PERSONAL INCOME TAX

     

     Introduced By: Senators Lombardi, McCaffrey, Felag, Ciccone, and Lombardo

     Date Introduced: January 16, 2019

     Referred To: Senate Judiciary

     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.

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     (a) General. Except as otherwise provided in this section the amount of the Rhode Island

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personal income tax shall be assessed within three (3) years after the return was filed, whether or

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not the return was filed on or after the prescribed date. For this purpose a tax return filed before

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the due date shall be considered as filed on the due date; and a return of withholding tax for any

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period ending with or within a calendar year filed before April 15 of the succeeding calendar year

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shall be considered filed on April 15 of the succeeding 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 § 44-30-59, of a change, correction, or

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

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income tax return or to report a change or correction which is treated in the same manner as if it

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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 § 44-

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

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

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deficiency for federal income tax purposes, an assessment may be made at any time prior to two

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(2) years after the report or amended return was filed. This assessment of Rhode Island personal

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income tax shall not exceed the amount of the increase attributable to the federal change,

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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. § 692(a)

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

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thereafter.

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     (e) Limitations exclusive.

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     (1) No period of limitations specified in any other law shall apply to the assessment or

 

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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, 2020.

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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 would have been filed.

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     This act would take effect on January 1, 2020.

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