Current through September 18, 2024
A. Based upon a
taxpayer's petition filed pursuant to R.I. Gen. Laws §
42-35-8, the
Tax Administrator interprets Rhode Island tax law and regulations and applies
them to a specific set of facts set forth in the request. The Order issued by
the Tax Administrator has precedential value and may be generally relied on by
all persons with respect to subsequent like transactions.
B. General Information Letters -A General
Information Letter (commonly referred to as a "Letter Ruling") is unlike a
Declaratory Order in that it generally seeks an interpretation of tax law or
regulation without applying it to a specific set of facts. A General
Information Letter may be issued where it appears that general information only
is requested, or where a request for a Declaratory Order does not comply with
all the requirements for a Declaratory Order. General Information Letters may
not be relied upon by any taxpayer other than the taxpayer who requested the
information. General Information Letters are not binding on the Tax Division if
there has been a misstatement or omission of material facts or, on a
prospective basis, if there has been a change in law or applicable regulations
or a decision on point is issued by the Rhode Island or Federal
Courts.
C. Requirements - Each
request for a Declaratory Order must contain:
1. the name, address, and
registration/identification number of the taxpayer requesting the Declaratory
Order. If the taxpayer is a corporation, the state of incorporation;
2. a carefully detailed statement of all
relevant facts relating to the transaction. Conferences with a taxpayer
requesting an order shall not be allowed;
3. a true copy of all relevant documents
bearing on the issue or issues. Relevant facts reflected in documents submitted
must be included in the taxpayer's statement and not merely incorporated by
reference, and must be accompanied by an analysis of their bearing on the
issue(s), specifying the pertinent provisions;
4. a statement whether, to the best of the
knowledge of the taxpayer or his/her representative, the identical issue is
being considered by the Division of Taxation in connection with an active
examination or audit of a tax return already filed;
5. a statement disclosing whether or not an
order request on the same or similar issue has been or is being submitted to
the Internal Revenue Service or to the taxing jurisdiction of another
state;
6. a statement of the
Declaratory Order requested by the taxpayer and the taxpayer's argument in
support of its request, including relevant authority for such
request.
D. A
Declaratory Order will not be issued:
1. if
the same or a similar issue is before the Tax Division in connection with an
audit examination of the same taxpayer for the same or any other prior tax
period;
2. in response to inquiries
concerning alternative plans of proposed transactions or concerning
hypothetical situations;
3. on only
part of an integrated transaction.
E. After receiving a request for a
Declaratory Order, the Tax Division must:
1.
No later than sixty (60) days after receiving a petition, issue a Declaratory
Order in response to the petition, decline to issue the Order, or schedule the
matter for further consideration.
2. If the Tax Division declines to issue a
Declaratory Order, it shall promptly notify the petitioner of its decision. The
decision must be in a record and must include a brief statement of the reasons
for declining. An agency decision to decline to issue a declaratory order is
subject to judicial review for abuse of discretion. An agency failure to act
within the applicable time is subject to judicial action under §42-35-15.
3. If the Tax Division issues a Declaratory
Order, the Order must contain the names of all parties to the proceeding, the
facts on which it is based, and the reasons for the agency's conclusion.
Declaratory Orders are effective only if filed with the Secretary of State. The
order has the same status and binding effect as an order issued in a contested
case and is subject to judicial review under §42-35-15.
