It's tax season, so that means R.I. Tax Administrator Neena S. Savage and her staff at the R.I. Division of Taxation are busy people.
The division of taxation has scheduled a "Tax Compliance Day" on Monday, April 8, billed as a chance for taxpayers to seek resolutions for complex state and federal tax issues.
The free event will take place between noon and 7 p.m. at 1511 Pontiac Ave., Building 73, Cranston, and representatives of the IRS and the state taxation division will be in attendance.
Registration is encouraged and can be done here, although walk-ins are welcome.
Savage, who has been tax administrator since 2016, spoke with Providence Business News about tax compliance and collections.
PBN: You're holding a "Tax Compliance Day" on April 8. What are some of the common tax compliance issues that your division sees?
SAVAGE: The Tax Compliance Day event on April 8 is an opportunity to interact with taxpayers in one place and help them address state and federal tax issues by working with representatives of the R.I. Division of Taxation, the IRS, or the secretary of state's office, who will all be present.
Common issues that arise range from education of taxpayer obligations for small businesses, to helping transparently explain the next steps on the path to compliance, to helping taxpayers navigate obstacles in obtaining a letter of good standing or a liquor license clearance.
PBN: How has technology improved the state's ability to collect taxes?
SAVAGE: Technological improvements have allowed for taxation to better focus on serving our taxpayers by providing streamlined tools to make inquiries concerning their tax accounts, by providing a wider variety of filing or paying options, and by providing timely, straightforward and detailed explanations of issues.
By removing some of the obstacles a taxpayer might traditionally face, they are able to become and remain compliant with greater ease, reducing our cost of enforcement and allowing the state to more efficiently collect taxes.
PBN: Gov. Daniel J. McKee has proposed expanding the public list of delinquent taxpayers, both individuals and businesses. Is this an effective tool to get them to pay up? Are many people eager to pay when they find out their name will go public?
SAVAGE: While voluntary compliance is our goal for every taxpayer, we do have situations where some taxpayers may require enforcement to bring them into compliance. The list of top delinquent taxpayers is one tool we have to ensure that all taxpayers pay their fair share of taxes, and hopefully move those taxpayers toward voluntary compliance in the future. Expanding this list is on par with our neighboring states and the goal is to encourage taxpayers to reach out to resolve their tax issues before publication of the list, thereby increasing the efficiency of collections and reducing the tax burden on compliant Rhode Island taxpayers.
PBN: The top business delinquent owes $6.3 million, and the top individual owes $3.1 million. Is there really any hope that the state will ever see that money?
SAVAGE: The delinquent taxpayer list is one of many avenues the Division of Taxation utilizes to enforce collection from those with the highest outstanding tax liabilities. We do see each year those with the highest outstanding liabilities work with the Division of Taxation to create a plan to meet their legal tax obligations.
Over the past few years, we have seen the collection of delinquent taxes increase each year as we modernize our business practices and technology and embrace lessons learned in other tax departments in other states and in other agencies within the state of Rhode Island.
PBN: McKee's budget reportedly also assumes that the state can bring in an additional $10.4 million from tax collection enforcement by increasing the delinquent list size and adding staff and software. What percentage of taxes went unpaid last year (dollar figure, too, if you have it), and where would you like those numbers to be this coming tax year?
SAVAGE: For fiscal year 2023, the Division of Taxation collected $5.2 billion, which is the most significant source of general fund revenue for Rhode Island. With our work moving the needle toward voluntary compliance of Rhode Island taxpayers, we hope to increase the revenue the state can use for vital services. It is difficult to say exactly how much was unpaid last year due to collections being on a rolling basis and prior years’ collection efforts being realized in subsequent and future years.
Unpaid taxes are collected over time by working with taxpayers. We want taxpayers to understand and meet the tax responsibilities that are set forth in law, and we work diligently to meet taxpayers where they are to help them with understanding their tax obligations.