Getting Back Into Hawaii's Tax System: An Outline And Some Interpretation of Hawaii’s “Voluntary Disclosure” Practice


Thought about correcting inaccurate or outright fraudulent tax returns, or filing late returns, but wonder about the potential for a criminal investigation and prosecution? Wondering how you can get back into the system while minimizing the financial consequences of past mistakes? Are you eligible if you've filed Income Tax but not General Excise Taxes? What if you've filed General Excise Taxes incorrectly and not reported Transient Accommodations revenue? Is it a disqualification if you obtained a tax license but never filed? Does Hawaii offer a fixed penalty rate or a discount for coming forward? What if you can't pay the balances in full?

The Hawaii Department of Taxation has published guidance on these and other questions in a subject commonly referred to as "voluntary disclosure." Official guidance may seem incomplete, and that's at least partially by design.

Please see the attached Description And Analysis of Hawaii’s Official Guidelines On Voluntary Disclosure for some background and interpretation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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