Voluntary Disclosure Program

The Division will generally agree to limit prior period exposure to three (3) years or to the date exposure was established unless the taxpayer has been collecting sales taxes but not paying. The Division may agree to waive all penalties for voluntary disclosures if the tax and interest due are paid when assessed.

If the taxpayer has been collecting taxes and not paying the tax, the Division will extend the period exposure to include all liabilities of this type. The specific facts of each case will determine the penalties.

To be considered for the Voluntary Disclosure Program, the disclosure applicant must not have been contacted by the Rhode Island Division of Taxation before initiating the disclosure process.

To participate in the program, a written request should be sent to the Rhode Island Division of Taxation.  To remain anonymous, a representative such as an accountant or attorney may send the request on the taxpayer’s behalf.  The written request must include:

• Tax type;
• Description of the applicant’s activities in the state;
• Starting date of the applicant’s activities in the state;
• Reasons for noncompliance with Rhode Island tax laws;
• Amount of potential tax liability;
• Principal location (state) of the business and the state of incorporation;
• Whether the company has been contacted by the Rhode Island Division of Taxation;
• Whether the company has collected, but not remitted, Rhode Island Tax; and
• Any additional information or extenuating circumstances to support the request.

To apply to the Voluntary Disclosure Program, the taxpayer may mail a written request to:

Rhode Island Division of Taxation

Audit & Investigation

One Capitol Hill

Providence, RI 02908

Attn: Voluntary Disclosure

or email a written request to: Tax.Audit@tax.ri.gov

Once your written request is reviewed, the Tax Division will respond with a letter outlining its position.  At that time the taxpayer may decide whether or not to disclose and enter into the agreement.

If the taxpayer has liability in more than one state, you may consider applying for multi-state voluntary disclosure through the Multistate Tax Commission. More information about the MTC's Voluntary Disclosure Program and the application for Multi-state Voluntary Disclosure is available Multistate Voluntary Disclosure Program - MTC.

Any returns which would normally be required to be filed can still be filed with the Division of Taxation. A letter may be addressed to the Tax Administrator, with the required returns, requesting a penalty waiver. Full payment of any taxes and interest due would be required for the penalty waiver to be considered at the Tax Administrator's discretion.