The program allows eligible taxpayers to pay 'back taxes' while avoiding penalties and potentially avoiding referral for criminal prosecution. In addition, the program offers a 50% reduction in interest (from 8% to 4%).
The program is available to all eligible taxpayers owing eligible Hawaii taxes for any taxable period ending on or before December 31, 2007, either because the taxpayer:
- failed to file a return for the taxable period, or
- previously filed a return for the taxable period, but underreported the amount of tax due
The program covers all taxes that are administered by the Hawaii Department of Taxation (DOT), including the general excise tax, income tax, and transient accommodations tax, among others.
Not Eligible for Program
The program may not be used for tax liabilities that are already know to the DOT. Taxpayers already in a payment plan with DOT or who have received a tax bill from DOT cannot participate in the program for the tax liability that is the subject of that bill. The taxpayer, may, however, report additional liability for that tax period as an under-reporter under the Tax Fresh Start Program.
A taxpayer is ineligible for participation in the program if any of following applies:
- The taxpayer is currently under audit by DOT;
- The taxpayer is currently under criminal investigation;
- The taxpayer is a party to any civil or criminal litigation that is pending on May 27, 2009 with DOT;
- The taxpayer is currently in DOT's collection program;
- The taxpayer has been contacted by DOT concerning a return for any
reason, including a return that has not been filed or an apparent
understatement of income; - The taxpayer is under audit by the federal government or has been
notified of such an examination; or - The taxpayer has been criminally prosecuted by the criminal
investigations unit, or who is currently under court jurisdiction.
If a taxpayer is not eligible for the Tax Fresh Start Program for a particular Hawaii tax or for a particular taxable period, the taxpayer may still be eligible to apply for participation in the program for a different Hawaii tax or for a different taxable period.
If you have a question about eligible taxes, visit the website www.hawaii.gov/tax for a comprehensive list.
Specific Requirements When Filing
In addition to determining if you are eligible, there are specific requirements to follow when filing the required returns under the Tax Fresh Start Program.
Click on the following link to access the Hawaii News Release and learn about the Requirements:
http://hawaii.gov/tax/media/2009-05-27-freshstart.pdf
OTHER IMPORTANT FACTORS TO CONSIDER:- Under the program, taxpayers relinquish any and all administrative and judicial rights of appeal.
- Hawaii is actively pursuing non-filers and underreporters.
- There is no civil statute of limitations on auditing or assessing non-filers.
- There is also no civil statute of limitations on auditing or assessing underreporters where tax fraud is involved.
If you have any questions regarding this program please contact me at leveragesalt@earthlink.net.