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State program for delinquent taxes a success

August 19, 2009
The Maui News

HONOLULU (AP) - A state program to get delinquent taxpayers to pay up has proven more successful than anticipated.

The Department of Taxation reports it collected $14 million from 870 taxpayers through the Tax Fresh Start Program, about double the amount officials originally projected.

The first-of-its-kind program in Hawaii ran from May 27 to June 26, offering amnesty to taxpayers who had undisclosed or underreported state taxes owed before Dec. 31, 2007.

It was designed to encourage the taxpayers to pay back taxes in order to avoid penalties and the risk of prosecution.

Around $8 million came from taxpayers who qualified for the program, with most of the money, $4 million, coming in the form of general excise taxes. Just under $4 million came from delinquent income taxes.

The remaining $6 million was collected from taxpayers who failed to qualify for the program, but who wanted to pay off their back taxes after hearing about it, Tax Director Kurt Kawafuchi said. They sought a waiver or a compromise offer with the Tax Department.

Taxpayers are still encouraged to come forward to reveal undisclosed or underreported Hawaii income. Officials will determine on a case-by-case basis whether individuals are eligible for a waiver of penalties, Kawafuchi said.

Meanwhile, the search continues for people who underreport or do not disclose state taxes due. They include some bars, restaurants, construction firms, open-market vendors and mom-and-pop stores.

"We're trying to do whatever we can to help the state with the revenue situation," Kawafuchi said. "We want to make sure there's fairness in the program."

 
 

 

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