The IRS offers a number of programs to assist taxpayers with their federal taxes owed and similar programs are often available at the state level as well. In Rhode Island, residents can take advantage of a number of different options for resolving their back taxes owed. Depending on your situation, you may be able to set up a payment plan for your taxes owed, request a waiver of any penalties that have been assessed or negotiate a settlement of your tax liability.
If you can’t afford to pay the full amount of taxes owed by the filing deadline, you may be able to qualify for an Installment Agreement. To apply for an installment plan, you must complete an application form and return it to the Department of Taxation at:
Rhode Island Division of Taxation
Collection Section
One Capitol Hill – Suite 10
Providence, RI 02908-5812
You must provide information about your monthly income, expenses, and assets and send your first payment along with your application. It can take up to 30 days for the Department of Taxation to approve or deny your request. If you default on your payment plan, you may be subject to a tax lien, wage garnishment, bank account levy or other collection actions.
If the amount you owe is more than you could reasonably repay through an installment agreement, you can also ask for an Offer in Compromise. This effectively allows you to settle your tax liability for less than what you owe. To request an Offer in Compromise, you’ll need to complete Form RI 656 and Form RI 433-A (Form RI 433-B for Businesses). Form 656 is the application form for an Offer in Compromise and Form 433 is a complete financial statement. If you’re in the process of negotiating a tax settlement with the IRS, you’ll also need to provide information about your offer. If the Department of Taxation accepts your offer, you’ll need to make your payment in full within 30 days in order to avoid further collection actions.
In addition to requesting a settlement of your taxes owed, you can also ask for an abatement of any penalties that have been assessed. To qualify for a penalty abatement, you must be able to show that those penalties were assessed in error or that your failure to pay taxes due was not intentional. To request a penalty waiver, you can write to the Department of Taxation at One Capitol Hill, Providence RI 02908.
You can contact the Rhode Island Department of Taxation Monday through Friday between the hours of 8:30 am and 4:00 pm.
For Collections, call: (401) 574-8941
For General Inquiries, call: (401) 574-8829
Emails can be directed to txassist@tax.ri.gov
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