In every state, it's illegal for a taxpayer to commit tax evasion, or, in other words, to intentionally underpay their taxes. The terms "tax fraud" and "tax evasion" are often used interchangeably, however, tax fraud is actually a specific type of tax evasion where an offender intentionally lies on their tax return in order to evade paying a tax.
In Hawaii, the crime of tax evasion can only be committed if the actor willfully attempted to evade a tax. Therefore, mistakes that are made in good faith can't constitute tax evasion or tax fraud because the actor didn't intent to cheat on their taxes. This article provides a brief overview of Hawaii's tax fraud and tax evasion laws.
| Code Section | Hawaii Revised Statutes section 231-34: Tax Evasion |
| What's Prohibited? | Willfully attempting in any manner to evade or defeat any tax, or its payment. |
| Penalties  | Tax evasion is a class C felony that can be punished by any one, or by a combination, of the following:
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| Statute of Limitation for Criminal Penalties | Hawaii's statute of limitation for tax evasion is seven years. Therefore, prosecutions for tax evasion must be commenced within seven years after the commission of the offense. |
| Code Section | Hawaii Revised Statutes section 231-35: Willful Failure to File a Tax Return |
| What's Prohibited? | Willfully failing to file a tax return if the offender is required by law to file one. |
| Penalties  | Willfully failing to file a tax return is a misdemeanor offense that is punishable by any one, or by a combination, of the following:
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| Statute of Limitation for Criminal Penalties | Hawaii's statute of limitation for tax evasion is seven years. Therefore, prosecutions for failing to file a tax return must be commenced within seven years after the commission of the offense. |
Tax Preparers and Tax Fraud
In Hawaii, any tax preparer that willfully makes, aids in, procures, counsels, or advises the preparation or presentation of a tax return, affidavit, claim, or other required tax document that contains a written declaration that it is true and correct commits a crime if he doesn't believe that every material matter in the document is true and correct.
It doesn't matter whether the person required to present the tax document knew of the falsity or fraud. Tax preparers who violate this law are guilty of a class C felony and can be punished by a fine of up to $100,000, imprisonment for up to three years, and/or probation.
Additional Resources
State laws change frequently. For case specific information regarding Hawaii's tax fraud and tax evasion laws contact a local tax attorney.
