A Rhode Island Closing Agreement refers to a legal document that finalizes the resolution of a tax dispute between the taxpayer and the Rhode Island Division of Taxation. This agreement outlines the terms and conditions upon which the taxpayer and the tax authorities come to an understanding, settling any outstanding tax liabilities or disputes. Rhode Island offers various types of Closing Agreements depending on the specific circumstances of the tax issue. Some of these include: 1. Voluntary Disclosure Agreement: This type of Closing Agreement is designed for taxpayers who have not previously filed or reported their tax liability. It allows non-compliant taxpayers to come forward voluntarily, disclose their tax obligations, and resolve the issue with the Rhode Island Division of Taxation. 2. Offer in Compromise: The Offer in Compromise Closing Agreement is an option for taxpayers who are unable to pay their total tax debt. The agreement allows the taxpayer to settle their tax liability for a reduced amount, with specific terms and conditions for payment. 3. Installment Agreement: This type of Closing Agreement is for taxpayers who are unable to pay their tax debt in full, but can afford to make regular monthly payments. The agreement establishes a payment plan that allows the taxpayer to resolve their tax obligations over time. 4. Penalty Abatement Agreement: In cases where a taxpayer has incurred penalties due to non-compliance or late payment, the Penalty Abatement Closing Agreement is used. This agreement allows the taxpayer to request forgiveness or reduction of the imposed penalties, subject to certain conditions and eligibility criteria. 5. Closing Agreement for Audit Resolution: This type of agreement is used when a taxpayer and the Rhode Island Division of Taxation settle a tax dispute resulting from an audit. It outlines the agreed-upon adjustments to the tax liability and any penalties, and resolves the matter between both parties. Regardless of the type of Rhode Island Closing Agreement, it is crucial for taxpayers to carefully review the terms, seek legal advice if necessary, and ensure compliance with the agreed-upon terms to avoid any potential consequences in the future.