STAND. COM. REP. 2359

Honolulu, Hawaii

, 2004

RE: S.B. No. 2989

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Judiciary and Hawaiian Affairs, to which was referred S.B. No. 2989 entitled:

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

begs leave to report as follows:

The purpose of this measure is to provide the Department of Taxation with the authority to impose civil penalties and injunctions on individuals who promote abusive tax shelters and tax preparers who support unrealistic positions on tax returns.

Testimony in support of this measure was submitted by the Department of Taxation, Hawaii Society of Certified Public Accountants, and the Tax Foundation of Hawaii.

Your Committee finds that currently there are no laws that hold:

(1) Tax preparers responsible for making understatements of liability;

(2) Tax preparers responsible for making willful and reckless understatements of liability; and

(3) Individuals responsible for promoting abusive tax shelters.

Your Committee believes that this measure will provide the necessary civil penalties to address these problems.

Your Committee has amended this measure by changing the effective date to July 1, 2004. Your Committee also addressed numerous technical changes to conform to the Hawaii Revised Statute style.

As affirmed by the record of votes of the members of your Committee on Judiciary and Hawaiian Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2989, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2989, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Hawaiian Affairs,

____________________________

COLLEEN HANABUSA, Chair