Hawaii State Tax Enforcement Decision Checklist

Hawaii State Tax Enforcement Decision Checklist

What Tax Collection Enforcement Means

Hawaii tax collection enforcement occurs when the Hawaii Department of Taxation takes formal action to collect unpaid taxes or address non-compliance with filing requirements. This happens after initial notices have been sent and no response or payment has been made, and enforcement actions include wage levies, bank levies, property liens, or tax license suspension.

Understanding what enforcement means and what happens during this process is important because taking action at this stage can affect your ability to resolve the debt and may result in additional costs. The state follows administrative procedures outlined in HRS 231-25 before proceeding to enforcement measures.

Why the State Takes Enforcement Action

The Hawaii Department of Taxation initiates enforcement when a taxpayer has not responded to previous notices or has not paid a tax debt within the timeframe indicated. Typical triggers include failure to file required returns, non-payment after receiving a notice of deficiency, or ignoring demand notices sent by the state.

Consequences of Not Responding

Ignoring enforcement action results in escalation of collection efforts under HRS 231-25. The state may proceed with wage levies, bank account levies, or property liens once enforcement authority has been invoked, and additional penalties and interest continue to accumulate on the unpaid tax balance.

What Enforcement Does Not Mean

An enforcement decision does not automatically mean the state has frozen all your bank accounts or taken immediate action against your wages. It does not mean you have lost all options for resolving the debt, and enforcement represents a civil collection process, though the

Hawaii Department of Taxation Special Enforcement Section can pursue both civil and criminal actions simultaneously.

Steps to Take After Receiving an Enforcement Notice

1. Verify the notice: Confirm that you have received an official notice from the Hawaii

Department of Taxation. Check the notice for the department’s official contact information, case or account number, and the specific amount owed.

2. Review the notice for key details: Read the entire notice carefully to identify the tax year or period in question. Note the original tax amount owed and any penalties or interest that have been added, and identify the specific enforcement action being taken or considered.

3. Gather your tax records: Collect copies of the tax return or returns in question, including any filing confirmations or receipts. Gather documentation related to the tax year in question, and locate proof of filing if you filed a return for the year in question.

4. Determine if you agree or disagree with the amount: Review the stated tax amount and verify whether the calculation appears correct based on your records. Document your reasons clearly for reference in future communications with the state if you believe the amount is incorrect.

5. Contact the Hawaii Department of Taxation: Locate the Department of Taxation’s contact information from the enforcement notice or the official state website. Call or visit in person to speak with a tax representative about the enforcement action, explain your situation, and ask what options are available to resolve the debt.

6. Ask about payment options: Inquire whether the state offers installment payment plans or payment agreements for your specific situation. Hawaii charges a mandatory non-refundable $50 processing fee for approved payment plan agreements under HRS

231-25.5, and payment plan agreements require you to file all required tax returns, file all future tax returns on time, and pay them in full, and not incur any new liabilities while on the payment plan.

7. Understand payment plan limitations: According to the Hawaii Department of Taxation policy, when a wage levy is in effect, it cannot be stopped by entering into a payment agreement or making a partial payment. Request written confirmation of any payment arrangement and clarify whether existing enforcement will continue during the payment plan.

8. Request documentation of the debt: Ask the state to provide written documentation showing how the debt was calculated, including the original tax, penalties, and interest.

Request an itemized breakdown of charges and the dates they were assessed.

9. Ask about appeal or dispute options: Inquire whether you have the right to appeal or dispute the underlying tax assessment through the Administrative Appeals Office under

HRS Chapter 232. Request information about deadlines for filing an appeal if one is available.

10. Document all communications: Keep a record of every communication with the Hawaii

Department of Taxation, including dates, times, names of staff members, and what was discussed. Save all written correspondence, notices, and documents related to your case.

11. Confirm payment method: Ask the state which payment methods are accepted. Get the correct mailing address if paying by mail, or the website or phone number for electronic payment.

12. Monitor your account: After making contact or payments, continue to monitor your account for any changes in enforcement status. Track your payments and confirm they are being applied correctly if a payment plan was established.

What Happens After You Take Action

After you contact the state and provide information about your situation, the Hawaii Department of Taxation will review your case and respond with options or next steps. Options may include a payment plan offer, a request for additional financial information using Form CM-2 Statement of

Financial Condition, or proceeding with enforcement if no agreement is reached.

Enforcement actions may continue during review periods unless the state specifically agrees in writing to pause collection. Notices and statements showing your account balance and payment activity will continue to arrive from the state.

Important Points to Remember

Do not assume that filing an appeal or entering a payment plan automatically stops enforcement actions. Request written confirmation of any agreement and clarify enforcement status in writing, keep copies of all notices, correspondence, and payment records, and contact the state

immediately rather than waiting, as delays limit your options for addressing enforcement.

Interest and penalties continue to accrue on unpaid balances even during payment plan arrangements.

Facing State Enforcement or Payroll Tax Issues?

If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.