State Tax Director To Address “Cash Economy” at Workshop

Fred Pablo, Director, State of Hawaii Tax Department. File photo by Wendy Osher.

By Sonia Isotov

Fred Pablo, the director of the Hawaii Department of Taxation, will hold a workshop on Maui on August 10 addressing  the 2012 legislative session and the efforts of the Special Enforcement Section regarding the “cash economy.”

Presentations will include a review of the recently concluded 2012 tax filing season and an update of the Department’s e‑filing program.

Pablo and other staff will provide an overview of the 2012 legislative session and discuss some of the key measures enacted this year.

Also on the agenda is an overview of the Special Enforcement Section’s efforts to address the cash economy and an update on their recent activities. In July 2009, the Department of Taxation formed the Special Enforcement Section (SES), which is charged with carrying out complex civil enforcement efforts of Hawaii’s tax laws. The SES functions include:

• Investigating suspected violations of Hawaii tax laws with a stated priority of targeting the cash economy, for civil enforcement purposes, including the use of covert operations.
• Issuing citations, fines, assessments, liens, warrants, writs, and other process to taxpayers and others.
• Serving as fraud referral specialists within the Department to advise the civil compliance personnel on developing criminal tax fraud cases for referral to the Department Criminal Investigation Section.
• Educating the public on tax obligations in Hawaii, including focusing on segments of the economy prone to tax avoidance or evasive behavior.
• Coordinating civil enforcement efforts with other law enforcement agencies and federal, state, and local governments.

Sample General Excise Tax License. Courtesy of Tax Dept.

The SES does not conduct criminal investigations. The Department of Taxation Criminal Investigation Section handles all criminal tax fraud cases.

The SES is authorized to issue increased fines for persons found to be operating “cash-based businesses.” A cash-based business is defined as a person who operates a business, including for-profit and not-for-profit, where transactions in goods or services are exchanged substantially for cash and where the business is found to have met one or more of the following factors, which include:

• Substantially under-reporting or misreporting the proper amount of tax liability on any tax return;
• Failing to have a license or permit as required by law;
• Having no fixed and permanent principal place of business; or
• Not accepting checks or electronic payment devices for business transactions.

The workshop will be held at the Kahili Golf Course, Nahele Room, at 2500 Honoapi’ilani Highway. The event will begin at 8:30 a.m. and end at 12:30 p.m., with check‑in beginning at 8 a.m.

The cost for the Summer Workshop is $80 for each person registering at least one (1) week prior to the selected workshop, and $100 for those who register after that. The registration fee includes a continental breakfast, all workshop materials, and four (4) hours of Continuing Professional Education credit.  Additional workshop materials may also be purchased separately for $25 per set.

Registration forms are available on the Department’s website at http://www.hawaii.gov/tax or contact the UH Maui College at (808) 984-3231.