Bill Text: HI SB1199 | 2013 | Regular Session | Introduced
Bill Title: Unlawful Disclosure of Tax Returns and Tax Return Information
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-02-11 - The committee on JDL deferred the measure. [SB1199 Detail]
Download: Hawaii-2013-SB1199-Introduced.html
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THE SENATE |
S.B. NO. |
1199 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE UNLAWFUL DISCLOSURE OF TAX RETURNS AND TAX RETURN INFORMATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§231-___ Unlawful disclosure of returns and return information. (a) All tax returns and return information required to be filed under title 14, including any copy of any portion of a federal return that may be attached to a state tax return or any information reflected in the copy of such federal return and the report of any investigation of the return or of the subject matter of the return, shall be confidential. It shall be unlawful for any person or any officer or employee of the State to knowingly or intentionally make known information imparted by any tax return or estimate made under chapter 235 or return information filed pursuant to title 14, or any report of any investigation of the return or of the subject matter of the return, or to knowingly or intentionally permit any return, estimate made under chapter 235, return information, or report so made, or any copy thereof, to be seen or examined by any person other than the taxpayer, the taxpayer's authorized agent, persons duly authorized by the State or county in connection with their official duties, and the Multistate Tax Commission or the authorized representative thereof, except as provided by law; provided that for tax purposes only, persons with a material interest in a return, return information, or report filed under chapter 237, chapter 237D, and chapter 251 may examine them. Unless otherwise provided by law, persons with a material interest in the return, return information, or report shall include:
(1) Trustees;
(2) Partners who were members of such partnership during any part of the period covered by the return in the case of a partnership return;
(3) Any person designated by resolution of its board of directors or other similar governing body in the case of a corporate return;
(4) Any bona fide shareholders of record owning one per cent or more of the outstanding stock of such corporation in the case of a corporate return;
(5) The person authorized to act for a
corporation in dissolution;
(6) Any person who was a shareholder during any part of the period covered by such return during which an election under Internal Revenue Code section 1362(a) was in effect in the case of a S Corporation;
(7) The personal representative, trustee, heir, or beneficiary of an estate or trust in case of the estate's or decedent's return;
(8) The committee, trustee, or guardian of any person in paragraphs (1) to (6) who is incompetent;
(9) The trustee in bankruptcy or receiver, and the attorney-in-fact of any person in paragraphs (1) to (7);
(10) Persons duly authorized by the State in connection with their official duties;
(11) Any duly accredited tax official of the United States, any state or territory, or of any county of this State;
(12) Members of a limited liability company who were members of such limited liability company during any part of the period covered by the return; and
(13) A person contractually obligated to pay the taxes assessed against another when the latter person is under audit by the department.
(b) Any violation of subsection (a) shall be a felony punishable upon conviction by a fine in any amount not exceeding $5,000, or imprisonment of not more than five years, or both, together with the costs of prosecution and in addition to any other punishment, be dismissed from office or discharged from employment upon conviction for such offense.
(c) The following exceptions apply to duly authorized government personnel:
(1) Returns and return information shall, without written request, be open to inspection by or disclosure to officers and employees of the department whose official duties require such inspection or disclosure for tax administration purposes.
(2) In a matter involving tax administration, a return or return information shall be open to inspection by or disclosure to officers and employees of the Department of the Attorney General and county prosecutors personally and directly engaged in, and solely for their use in, any proceeding before a grand jury or preparation for any proceeding (or investigation which may result in such a proceeding) before a grand jury or any federal or state court.
(A) However, such return or return information may only be disclosed pursuant to this paragraph if:
(i) The taxpayer is or may be a party to the proceeding, or the proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of such civil liability in respect of any tax imposed under title 14;
(ii) The treatment of an item reflected on such return is or may be related to the resolution of an issue in the proceeding or investigation; or
(iii) Such return or return information relates or may relate to a transactional relationship between a person who is or may be a party to the proceeding and the taxpayer which affects, or may affect, the resolution of an issue in such proceeding or investigation.
(B) In any case in which the director of taxation is authorized to disclose a return or return information to the Department of the Attorney General or to a county prosecutor in accordance with the provisions of this subsection:
(i) If the director of taxation has referred the case to the Department of the Attorney General; or
(ii) If the director of taxation receives a written request from the Department of the Attorney General or a county prosecutor for a return of, or return information relating to, a person named in such request and setting forth the need for the disclosure,
the director of taxation shall disclose the return or return information so requested.
(3) A return or return information may be disclosed in a federal or state judicial or administrative proceeding pertaining to tax administration, but only:
(A) If the taxpayer is a party to the proceeding, or the proceeding arose out of, or in connection with, determining the taxpayer's civil or criminal liability, or the collection of such civil liability, in respect of any tax imposed under title 14;
(B) If the treatment of an item reflected on such return is directly related to the resolution of an issue in the proceeding;
(C) If such return or return information directly relates to a transactional relationship between a person who is a party to the proceeding and the taxpayer which directly affects the resolution of an issue in the proceeding; or
(D) To the extent required by order of a court which is authorized in the issuance of such order to give due consideration to legislative policy favoring the confidentiality of returns and return information as set forth in this title.
However, such return or return information shall not be disclosed as provided in subparagraph (A), (B), or (C) if the director of taxation determines that such disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.
(4) In general, any return or return information with respect to any specified taxable period or periods shall, pursuant to and upon the grant of an ex parte order by a court judge or magistrate, be open (but only to the extent necessary as provided in such order) to inspection by, or disclosure to, officers and employees of any state or county agency who are personally and directly engaged in:
(A) Preparation for any judicial or administrative proceeding pertaining to the enforcement of a specifically designated state criminal statute (not involving tax administration) to which the State or County, or an agency thereof is or may be a party;
(B) Any investigation that may result in such a proceeding; or
(C) Any grand jury proceeding pertaining to enforcement of such a criminal statute to which the State or County, or an agency thereof is or may be a party,
solely for the use of such officers and employees in such preparation, investigation, or grand jury proceeding.
(d) For the purpose of this section:
(1) "Return" means any tax or information return, declaration of estimated tax, or claim for refund required by, or provided for or permitted under, the provisions of title 14 which is filed with the department by, on behalf of, or with respect to any person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists which are supplemental to, or part of, the return so filed.
(2) "Return information" means a taxpayer's identity, the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer's return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the department with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under title 14 for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense."
SECTION 2. Section 237-34, Hawaii Revised Statutes, is amended to read as follows:
"§237-34 Filing of
returns; [disclosure of returns unlawful, penalty;]
destruction of returns. (a) All monthly and annual returns
shall be transmitted to the office of the taxation district in which the
privilege upon which the tax accrued is exercised. Where the privilege is
exercised in more than one taxation district the returns shall be transmitted
to the office of the first district.
[(b) All tax
returns and return information required to be filed under this chapter, and the
report of any investigation of the return or of the subject matter of the
return, shall be confidential. It shall be unlawful for any person or any
officer or employee of the State to intentionally make known information
imparted by any tax return or return information filed pursuant to this
chapter, or any report of any investigation of the return or of the subject
matter of the return, or to wilfully permit any such return, return
information, or report so made, or any copy thereof, to be seen or examined by
any person; provided that for tax purposes only the taxpayer, the taxpayer's
authorized agent, or persons with a material interest in the return, return
information, or report may examine them. Unless otherwise provided by
law, persons with a material interest in the return, return information, or
report shall include:
(1) Trustees;
(2) Partners;
(3) Persons named in a board resolution or
a one per cent shareholder in case of a corporate return;
(4) The person authorized to act for a
corporation in dissolution;
(5) The shareholder of an S corporation;
(6) The personal representative, trustee,
heir, or beneficiary of an estate or trust in case of the estate's or
decedent's return;
(7) The committee, trustee, or guardian of
any person in paragraphs (1) to (6) who is incompetent;
(8) The trustee in bankruptcy or receiver,
and the attorney-in-fact of any person in paragraphs (1) to (7);
(9) Persons duly authorized by the State in
connection with their official duties;
(10) Any duly accredited tax official of the
United States or of any state or territory;
(11) The Multistate Tax Commission or its
authorized representative;
(12) Members of a limited liability company;
and
(13) A person contractually obligated to pay
the taxes assessed against another when the latter person is under audit by the
department.
Any violation of this subsection shall be a
misdemeanor.
(c)] (b)
The department may destroy the monthly returns filed pursuant to section
237-30, or any of them, upon the expiration of three years after the end of the
calendar year in which the taxes so returned accrued."
SECTION 3. Section 237D-13, Hawaii Revised Statutes, is amended to read as follows:
"§237D-13 [Disclosure
of returns unlawful; destruction] Destruction of returns.
[(a) All tax returns and return information required to be filed under
this chapter, and the report of any investigation of the return or of the subject
matter of the return, shall be confidential. It shall be unlawful for any
person or any officer or employee of the State to intentionally make known
information imparted by any tax return or return information filed pursuant to
this chapter, or any report of any investigation of the return or of the
subject matter of the return, or to wilfully permit any return, return
information, or report so made, or any copy thereof, to be seen or examined by
any person; provided that for tax purposes only the taxpayer, the taxpayer's
authorized agent, or persons with a material interest in the return, return
information, or report may examine them. Unless otherwise provided by
law, persons with a material interest in the return, return information, or report
shall include:
(1) Trustees;
(2) Partners;
(3) Persons named in a board resolution or
a one per cent shareholder in case of a corporate return;
(4) The person authorized to act for a
corporation in dissolution;
(5) The shareholder of an S corporation;
(6) The personal representative, trustee,
heir, or beneficiary of an estate or trust in case of the estate's or
decedent's return;
(7) The committee, trustee, or guardian of
any person in paragraphs (1) to (6) who is incompetent;
(8) The trustee in bankruptcy or receiver,
and the attorney-in-fact of any person in paragraphs (1) to (7);
(9) Persons duly authorized by the State in
connection with their official duties;
(10) Any duly accredited tax official of the
United States, any state or territory, or of any county of this State;
(11) The Multistate Tax Commission or its
authorized representative; and
(12) Members of a limited liability company.
Any violation of this subsection shall be a
misdemeanor. Nothing in this subsection shall prohibit the publication of
statistics so classified as to prevent the identification of particular reports
or returns and the items of the reports or returns.
(b)] The department may destroy the
monthly, quarterly, or semiannual returns filed pursuant to section 237D-6, or
any of them, upon the expiration of three years after the end of the calendar
or fiscal year in which the taxes so returned accrued."
SECTION 4. Section 251-12, Hawaii Revised Statutes, is amended to read as follows:
"§251-12 [Disclosure
of returns unlawful; destruction] Destruction of returns.
[(a) All tax returns and return information required to be filed under
this chapter, and the report of any investigation of the return or of the
subject matter of the return, shall be confidential. It shall be unlawful
for any person or any officer or employee of the State to intentionally make
known information imparted by any tax return or return information filed
pursuant to this chapter, or any report of any investigation of the return or
of the subject matter of the return, or to wilfully permit any such tax return,
return information, or report so made, or any copy thereof, to be seen or
examined by any person; provided that for surcharge tax purposes only the
lessor or tour vehicle operator, the lessor's or tour vehicle operator's
authorized agent, or persons with a material interest in the return, return
information, or report may examine them. Unless otherwise provided by
law, persons with a material interest in the return, return information, or report
shall include:
(1) Trustees;
(2) Partners;
(3) Persons named in a board resolution or
a one per cent shareholder in case of a corporate return;
(4) The person authorized to act for a
corporation in dissolution;
(5) The shareholder of an S corporation;
(6) The personal representative, trustee,
heir, or beneficiary of an estate or trust in case of the estate's or
decedent's return;
(7) The committee, trustee, or guardian of
any person in paragraphs (1) to (6) who is incompetent;
(8) The trustee in bankruptcy or receiver,
and the attorney-in-fact of any person in paragraphs (1) to (7);
(9) Persons duly authorized by the State in
connection with their official duties;
(10) Any duly accredited tax official of the
United States or of any state or territory;
(11) The Multistate Tax Commission or its
authorized representative; and
(12) Members of a limited liability company.
Any violation of this subsection shall be a
misdemeanor. Nothing in this subsection shall prohibit the publication of
statistics so classified as to prevent the identification of particular reports
or returns and the items of the reports or returns.
(b)] The department
may destroy the monthly, quarterly, or semiannual returns filed pursuant to
section 251-4, or any of them, upon the expiration of three years after the end
of the calendar or fiscal year in which the surcharge taxes so returned
accrued."
SECTION 5. Section 235-116, Hawaii Revised Statutes, is repealed.
["§235-116 Disclosure
of returns unlawful; penalty. All tax returns and return
information required to be filed under this chapter shall be confidential,
including any copy of any portion of a federal return which may be attached to
a state tax return, or any information reflected in the copy of such federal
return. It shall be unlawful for any person, or any officer or employee
of the State to make known intentionally information imparted by any income tax
return or estimate made under sections 235-92, 235-94, 235-95, and 235-97 or
wilfully to permit any income tax return or estimate so made or copy thereof to
be seen or examined by any person other than the taxpayer or the taxpayer's
authorized agent, persons duly authorized by the State in connection with their
official duties, the Multistate Tax Commission or the authorized representative
thereof, except as provided by law, and any offense against the foregoing
provisions shall be punished by a fine not exceeding $500 or by imprisonment
not exceeding one year, or both."]
SECTION 6. Section 842-12, Hawaii Revised Statutes, is repealed.
["§842-12 Inspection of tax
records by chiefs of police. The chiefs of police of the
several counties or their authorized representatives may apply to any judge for
an order allowing inspection and examination of the tax returns and records on
file with the department of taxation of persons suspected of willful failure to
pay or report taxes, provided that such order shall issue only upon a showing
of probable cause."]
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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BY REQUEST |
Report Title:
Unlawful Disclosure of Tax Returns and Tax Return Information
Description:
Consolidates and clarifies unlawful disclosure of tax returns and tax return information requirements under chapter 231, Hawaii Revised Statutes.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
