SUBPOENA ENFORCEMENT ("SUMMONS ENFORCEMENT") UNDER HAWAII TAX LAW
SUBPOENA AUTHORITY, DIRECTOR OF TAXATION; HAWAII REVISED STATUTES (HRS) SECTION 231-7; SCOPE AND SUBJECTS OF INQUIRY; CONTENTS OF SUBPOENA; RIGHTS OF WITNESSES; PROCEDURES
Richard Paul McClellan III © 2012
Act 101 of 2011 significantly expanded the “summons” authority of the Director of the State of Hawaii Department of Taxation. Hawaii Revised Statutes Section 231-7 was substantially revised and increased in scope, expressly permitting the use of subpoenas in criminal, civil, and collection proceedings. Effective July 1, 2011, the contents and design of the revised HRS 231-7 suggest that the Department of Taxation may begin to use the subpoena power beyond criminal investigations into examination and collection functions.
The Department of Taxation has express statutory powers with respect to the assessment and collection of taxes, and the enforcement of the tax laws. See, HRS Section 231-3. The Department has a criminal investigation division, and the criminal investigators appointed by the Director have the authority and powers of a police officer or deputy sheriff in the performance of their duties. HRS Section 231-4.3.
Taxpayers that are the focus of a civil or criminal inquiry frequently wonder whether they can resist the Department of Taxation’s efforts to obtain records from third-party record-keepers, such as financial institutions and customers. While not yet the known subject of a court decision, the revised section 231-7 appears to have clarified the permissible scope and conferred expanded powers upon the Department of Taxation with respect to obtaining these records.
Persons facing an investigation or inquiry, whether as a target or witness, should carefully consider and evaluate their legal rights. This note is an overview of selected provisions of HRS Section 231-7 and that there is no substitute for the review of your matter by legal counsel.
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