HRS § 251-8 — Assessment of surcharge tax upon failure to make return; limitation period; exceptions; extension by agreement


§251-8 Assessment of surcharge 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 surcharge tax liability of the person
from any information the director obtains, and according to the estimate so
made, assess the surcharge 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 251-10, the contrary
shall be clearly proved by the person assessed, and the burden of proof upon
the 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
surcharge tax due under this chapter, the director shall assess the surcharge
taxes, interest, and penalty 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 surcharge 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 surcharge taxes shall begin 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 the surcharge tax, or of a failure to file the
annual return, the surcharge 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 person
have consented in writing to the assessment or levy of the surcharge tax after
the date fixed by subsection (c), the surcharge 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.