tax shelters: Emergency rules implement new law that imposes penalties for promoting abusive tax shelters - Hawaii tax

Administrative Rules 18-231-10.6-01T, 18-231-36.5-01-6694T, 18-231-36.6-01-6662T, 18-231-36.7-01-6700T, and 18-231-36.8-01-6676T, Haw. Dept. of Tax. (eff. 9/14/2009 and scheduled to expire 3/14/2011). The department has issued emergency rules implementing new law that:

- Stipulates circumstances under which a tax preparer may be required to pay a fine for understatement of liability based on unreasonable positions in a tax return or claim for a tax refund;
- Stipulates the circumstances under which a person commits the offense of promoting an abusive tax shelter and the penalties for such a violation;
- Establishes penalties for erroneous claims for refunds or credits;
- Establishes penalties for underpayments of taxes attributable to any substantial understatement of any tax amounts in a taxable year;
- Establishes statute of limitations provisions and extension provisions for substantial omissions of tax amount information; and
- Establishes penalties for the willful failure to collect, account for, and pay over taxes.

The department has also issued a related announcement, Announcement 2009-25 (9/9/09), concerning its adoption of these new rules.