Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 70 - Sales and Use Tax
Part 12 - Record Requirements (280-RICR-20-70-12)
Section 280-RICR-20-70-12.8 - Inadequate Records and/or Lack of Internal Controls

Universal Citation: 280 RI Code of Rules 20 70 12.8

Current through September 18, 2024

A. In a detailed audit, the Tax Administrator and/or his or her agents must be able to ensure the accuracy and completeness of the transaction records recorded in the taxpayer's record keeping system including magnetic or electronic POS systems.

B. A taxpayer's records will be considered inadequate if:

1. They do not verify sales receipts;

2. They do not verify whether those receipts are subject to sales tax;

3. They do not verify the taxable status of purchases;

4. They do not show that a taxpayer's business purchases correlate to business sales;

5. It is not possible to conduct a detailed audit using the taxpayer's records for whatever reason;

6. The taxpayer fails to make records available to the Tax Administrator and/or his or her authorized agent(s);

7. The records are not in a form that is both legible and readable that can be audited by the Tax Division, and/or

8. An evaluation of the taxpayer's accounting of POS system discloses that the system does not provide adequate internal control procedures which assure the accuracy and completeness of the transactions recorded in the books and records (e.g. the lack of sequentially numbered invoices or guest checks, or the lack of dates on receipts).

C. If a taxpayer's records are considered inadequate or a taxpayer's POS system lacks internal controls, the taxpayer may be subject to an estimated methodology, based on best available information, to determine any additional tax due, be subject to penalties and interest if additional tax is found to be due, be subject to criminal penalties, and have his or her sales tax permit suspended or revoked.

Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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