HRS § 237D-9 — Assessment of tax upon failure to make return; limitation period; exceptions; extension by agreement


§237D-9 Assessment of tax upon failure to
make return; limitation period; exceptions; extension by agreement. (a) If any person fails to make a return as required by
this chapter, the director shall make an estimate of the tax liability of the
person from any information the director obtains, and according to the estimate
so made, assess the taxes, interest, and penalty due the State from the person,
give notice of the assessment to the person, and make demand upon the person
for payment. The assessment shall be presumed to be correct until and unless,
upon an appeal duly taken as provided in section 237D-11, the contrary shall be clearly proved by the person assessed, and the burden
of proof upon appeal shall be upon the person assessed to disprove the
correctness of assessment.
(b) After a return is filed under this chapter
the director shall cause the return to be examined, and may make such further
audits or investigation as the director considers necessary. If the director
determines that there is a deficiency with respect to the payment of any tax
due under this chapter, the director shall assess the taxes and interest due
the State, give notice of the assessment to the persons liable, and make demand
upon the persons for payment.
(c) Except as otherwise provided by this
section, the amount of taxes imposed by this chapter shall be assessed or
levied within three years after the annual return was filed, or within three
years of the due date prescribed for the filing of the return, whichever is
later, and no proceeding in court without assessment for the collection of any
of the taxes shall be begun after the expiration of the period. Where the
assessment of the tax imposed by this chapter has been made within the period
of limitation applicable thereto, the tax may be collected by levy or by a
proceeding in court under chapter 231; provided that the levy is made or the
proceeding was begun within fifteen years after the assessment of the tax. For
any tax that has been assessed before July 1, 2009, the levy or proceeding
shall be barred after June 30, 2024.
Notwithstanding any other provision to the
contrary in this section, the limitation on collection after assessment in this
section shall be suspended for the period:
(1) The taxpayer agrees to suspend the period;
(2) The assets of the taxpayer are in control or
custody of a court in any proceeding before any court of the United States or
any state, and for six months thereafter;
(3) An offer in compromise under section 231-3(10) is
pending;
(4) During which the taxpayer is outside the State if
the period of absence is for a continuous period of at least six months;
provided that if at the time of the taxpayer's return to the State the period
of limitations on collection after assessment would expire before the
expiration of six months from the date of the taxpayer's return, the period
shall not expire before the expiration of the six months; and
(5) An appeal of the assessment is pending before the
taxation board of review or the tax appeal court, beginning on the date the
notice of appeal is filed and concluding on the date a final decision is issued
or the case is withdrawn or dismissed.
(d) In the case of a false or fraudulent
return with intent to evade tax, or of a failure to file the annual return, the
tax may be assessed or levied at any time; provided that the burden of proof
with respect to the issues of falsity or fraud and intent to evade tax shall be
upon the State.
(e) Where, before the expiration of the period
prescribed in subsection (c), both the department of taxation and the taxpayer
have consented in writing to the assessment or levy of the tax after the date
fixed by subsection (c), the tax may be assessed or levied at any time prior to
the expiration of the period agreed upon. The period so agreed upon may be
extended by subsequent agreements in writing made before the expiration of the
period previously agreed upon.