STAND. COM. REP. NO. 768

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 973

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Madam:

 

     Your Committee on Judiciary and Government Operations, to which was referred S.B. No. 973 entitled:

 

"A BILL FOR AN ACT RELATING TO TAX ADMINISTRATION,"

 

begs leave to report as follows:

 

The purpose of this measure is to deter tax fraud and promote uniformity in the state tax system by conforming Hawaii tax law to the Internal Revenue Code with respect to regulating tax return preparers and adopting other accuracy-related federal provisions.

 

     Your Committee finds tax preparers are not required to audit, examine, or review books, records, or other documents in order to independently verify information provided by taxpayers.  If a tax preparer finds this information to be incorrect or incomplete, the tax preparer must make reasonable additional inquiries.  This bill enables the Department of Taxation to hold tax preparers accountable for unreasonable positions on tax returns.  This accountability is critical in the wake of recent corporate fraud scandals involving large corporations.

 

     Your Committee also finds that greater scrutiny by the State is warranted with respect to regulating abusive tax schemes, erroneous tax refund claims, the understatement or misstatement of tax liability, and the collection and payment of withholding taxes.  These tax violations result in not only substantial revenue losses for the State, but also mean a greater tax burden for the taxpaying public.

 

    Your Committee has amended this measure by:

 

     (1)  Changing the effective date to July 1, 2050; and

 

     (2)  Making technical, nonsubstantive amendments.

 

     As affirmed by the record of votes of the members of your Committee on Judiciary and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 973, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 973, S.D. 1.

 

Respectfully submitted on behalf of the members of the Committee on Judiciary and Government Operations,

 

 

 

____________________________

BRIAN T. TANIGUCHI, Chair