Hawaii Administrative Rules
Title 18 - DEPARTMENT OF TAXATION
Chapter 231 - ADMINISTRATION OF TAXES
Section 18-231-19.5-01 - Disclosure of written opinions by the department; definitions
As used in sections 18-231-19.5-01 to 18-231-19.5-14:
"Audit or examination of a tax return" means all activities undertaken by the department in order to determine either (1) the correctness of the tax liability shown in any person's tax return, or (2) whether any person failed to file any tax return.
"Collection activities" mean all activities undertaken by the department, or by any collection agency described in section 231-13, HRS, to enforce the payment of any person's tax liability.
"Communication in connection with collection activities" means all communication undertaken by the department of this nature, including any inquiry into the financial resources of any person liable for tax; any levy, lien, garnishment, or seizure of any taxpayer's property; any certificate of discharge of a levy, lien, garnishment, or seizure of any taxpayer's property; and any certification of the absence of delinquent tax liability, including a tax clearance or a bulk sale certificate. A communication in connection with collection activities may be to any person and need not relate to the tax return of the person to whom the communication is addressed. A communication in connection with collection activities does not constitute a written opinion for purposes of section 231-19.5, HRS.
Example: T purchased all of the assets of B, a corporation. The department sends a letter to T proposing to collect B's delinquent tax liability from T because the general lien in favor of the State under section 231-33, HRS, attached to the assets. The letter is a communication in connection with collection activities.
"Communication in connection with the audit or examination of a tax return" means all communication undertaken by the department of this nature, including any subpoena or request for production of books and records under section 231-7, HRS; any assessment of any tax; any notice of proposed assessment of any tax; and any determination of jeopardy under section 231-24(a), HRS. A communication in connection with the audit or examination of a tax return may be to any person and need not relate to the tax return of the person to whom the communication is addressed. A communication in connection with the audit or examination of a tax return does not constitute a written opinion for purposes of section 231-19.5, HRS.
Example: H and W divorced in 1989. H filed a separate tax return for the calendar year 1989. The department sends a letter to H asking about a tax return W filed for calendar year 1989 because W claims that it is a joint tax return. Although the letter does not propose or suggest any adjustment to H's tax liability, the letter is a communication in connection with the audit or examination of a tax return.
"Department" means the department of taxation.
"Determination letter" means a written statement issued by the department that applies a well-established interpretation or principle of tax law to a specific set of facts. A determination letter includes the grant or denial of consent, permission, exemption, or registration; or routine correspondence in response to taxpayer inquiries. A determination letter does not constitute a written opinion for purposes of section 231-19.5, HRS.
"Information letter" means a written statement issued by the department that provides general information by calling attention to a well-established interpretation or principle of tax law, whether or not it applies to a specific set of facts. An information letter does not constitute a written opinion for purposes of section 231-19.5, HRS.
"Person" includes every individual, partnership, society, unincorporated association, joint adventure, group, hui, joint stock company, corporation, trustee, personal representative, trust estate, decedent's estate, trust, trustee in bankruptcy, or other entity, whether such persons are acting for themselves or in a fiduciary capacity, and whether the individuals are residents or nonresidents of the State, and whether the corporation or other association is created or organized under the laws of the State or of another jurisdiction.
"Person to whom the written opinion pertains" means:
(1) A taxpayer who requests the written opinion;
(2) Any successor or assign of the taxpayer with respect to the transaction that is the subject of the written opinion, if the department is informed of the successor or assign in the request for the written opinion, or in subsequent correspondence to the department's technical review office; or
(3) Another person authorized by law to act for or on behalf of the taxpayer, but only in that person's representative capacity.
"Person who has a material interest in maintaining the confidentiality of a written opinion or portion thereof" means a person who would be specially, personally, and adversely affected by the disclosure of a written opinion or a portion of it, as the case may be.
"Successor or assign of a taxpayer" means a person who acquires the rights and assumes the liabilities of a taxpayer.
"Taxpayer" means any person subject to any tax administered by the department under title 14, HRS, or any person seeking advice about whether that person is subject to any tax administered by the department under title 14, HRS.
"Well-established interpretation or principle of tax law" means an interpretation or principle of tax law stated in:
(1) The United States Constitution;
(2) The Hawaii Constitution;
(3) The Hawaii Revised Statutes;
(4) The Hawaii Administrative Rules;
(5) The Internal Revenue Code of 1986, as amended, to the extent incorporated in the Hawaii Revised Statutes or in the Hawaii Administrative Rules;
(6) The Treasury Regulations (title 26, Code of Federal Regulations), as amended, to the extent incorporated in the Hawaii Revised Statutes or in the Hawaii Administrative Rules;
(7) Federal legislation or treaties that are binding upon this State;
(8) Published opinions in final decisions of the Hawaii appellate courts, or of federal appellate courts applying Hawaii law;
(9) Final decisions of the Hawaii tax appeal court;
(10) Opinions of the Supreme Court of the United States interpreting any provision described in paragraphs (1) to (7);
(11) Opinions of the department of attorney general that are filed under section 28-3, HRS;
(12) Published determinations of the department such as tax information releases and tax memoranda (but not including tax forms, instructions, and informational pamphlets); or
(13) Written opinions that have been disclosed to the public.
"Written opinion" means a written statement issued by the department to a taxpayer, or to the taxpayer's authorized representative on behalf of the taxpayer, that interprets and applies any provision in title 14 administered by the department to a specific set of facts. A written opinion provides guidance to taxpayers in areas where the interpretation of the tax law is unclear, in order to enhance correct reporting, as where the written opinion:
(1) Establishes, alters, modifies, or clarifies an interpretation or principle of tax law;
(2) Calls attention to an interpretation or principle of tax law, whether or not it is a well-established interpretation or principle of tax law, that appears to have been generally overlooked; or
(3) Addresses a legal or factual issue of unique public interest or substantial public importance.
A written opinion shall not include a communication in connection with the examination or audit of a tax return, a communication in connection with collection activities, an information letter, or a determination letter.
