Tax Attorney in Honolulu, HI

IRC §7508 automatically extends filing, payment, and IRS assessment deadlines while you are in a designated combat zone or qualified hazardous-duty area, plus 180 days after the final day of qualifying service. IRC §112 excludes from gross income the compensation earned while in the combat zone (enlisted personnel exclude all such pay; commissioned officers exclude up to the highest enlisted base pay plus hostile-fire/imminent-danger pay). The IRS will not assess penalties for failure to file or pay during the qualifying period. Hawaii state PIT under HRS Chapter 235 follows parallel deferral rules. The most common mistake is assuming the deferral covers all open years — it covers only the period during the qualifying service plus 180 days. Returning service members who postpone all post-deployment compliance for a year often slip out of the safe harbor.

Probably not on the service member's military pay, and not on the qualifying spouse's wages if MSRRA is elected. The Servicemembers Civil Relief Act protects the service member from acquiring a new state of legal residence solely by reason of military orders. The Military Spouses Residency Relief Act extends similar protection to a spouse who shares the service member's state of legal residence. If your declared home of record is Texas, the service member's active-duty pay is sourced to Texas (no state PIT) and not Hawaii. The spouse, if also a Texas legal resident, can file the MSRRA election with the Hawaii Department of Taxation. Hawaii's 11% top bracket makes this a high-stakes choice — an inadvertent Hawaii filing can cost thousands per year. Form HW-4 with the appropriate MSRRA designation should be on file with the spouse's employer.

Fundamentally. A mainland sales tax is a buyer's tax: the legal incidence falls on the consumer, the seller collects and remits, and most wholesale and intermediate business-to-business transactions are exempt. Hawaii's General Excise Tax under HRS Chapter 237 is a seller's tax: the legal incidence falls on the seller, no business activity is structurally exempt, and the tax cascades through every link of the supply chain. A wholesaler pays GET, the retailer pays GET on its purchase from the wholesaler, and the retailer pays GET again on the sale to the consumer. The rate is 0.5% on wholesaling and manufacturing and 4% on retailing and services, with the 0.5% Honolulu county surcharge added to retailing on Oahu (4.5% combined). The Hawaii Supreme Court has held that GET may be passed through to the buyer as a separately-stated line item, but the seller remains the legal taxpayer. Mishandling GET pass-through is the most common Honolulu small-business audit trigger.

The Tax Appeal Court of the State of Hawaii is a dedicated state-tax tribunal of original jurisdiction at circuit-court level, sitting at 1111 Alakea Street, Honolulu. Hawaii is one of a small group of states (alongside Indiana, Oregon, New Jersey, and Arizona at the small-claims level) with a stand-alone tax court. Under HRS §232-1, a taxpayer who receives a Notice of Final Assessment from the Hawaii Department of Taxation has 30 days to file a written notice of appeal with the Tax Appeal Court. Missing the 30-day window forecloses judicial review of the assessment — the taxpayer is then limited to pay-first-then-claim-refund procedures under HRS Chapter 235 or HRS Chapter 237. Appeals from the Tax Appeal Court proceed to the Hawaii Intermediate Court of Appeals and ultimately to the Supreme Court of Hawaii. VTL refers Tax Appeal Court litigation to local Hawaii counsel while continuing federal IRS and Hawaii DOT administrative work in parallel.

The U.S. Tax Court holds Honolulu trial sessions at the Prince Jonah Kuhio Kalanianaole Federal Building, 300 Ala Moana Boulevard, Honolulu HI 96850 — the same building that houses the U.S. District Court for the District of Hawaii and the IRS Taxpayer Assistance Center. A petitioner designates Honolulu as the preferred place of trial on the petition under Tax Court Rule 140. Sessions are scheduled on rotation rather than monthly — Hawaii sessions are typically less frequent than mainland metros, which has the practical effect of compressing case calendars when they do appear. Small-tax-case procedure under IRC §7463 is available for deficiencies of $50,000 or less per year. We file petitions remotely under Tax Court electronic filing rules and appear at the Honolulu trial session by special admission.

If the aggregate balance across all your foreign accounts exceeded $10,000 at any point during the calendar year, yes. FinCEN Form 114 (FBAR) is required under 31 USC §5314 and is filed separately from the federal income-tax return on the FinCEN BSA e-file system. IRS Form 8938 is a separate statement filed with Form 1040 at higher thresholds. For Honolulu filers with accounts at Bank of the Philippine Islands, BDO Unibank, Metrobank, MUFG Japan, Shinhan or KEB Hana Korea, HSBC Hong Kong, or Industrial & Commercial Bank of China, both forms may apply. Streamlined Filing Compliance Procedures resolve good-faith past nondisclosure without the willful FBAR penalty — the penalty for willful nondisclosure can reach 50% of the account balance per year. The Streamlined program is currently open and is the right path when there is no badge of fraud. Native Hawaiian filers with accounts in Samoa or Tonga face similar exposure under the same rules.

Under HRS §231-16, the Hawaii Department of Taxation generally has 15 years from assessment to collect state tax — longer than the federal 10-year statute under IRC §6502 and longer than most state CSEDs in the country. The 15-year horizon applies to PIT, GET, and CIT assessments. The Hawaii assessment statute under HRS §235-111 generally runs three years from the filing date, extended to six years for a substantial omission and unlimited for unfiled returns or fraud. The practical consequence: when a Honolulu taxpayer owes both federal and Hawaii balances, the federal CSED may run out before the Hawaii balance — a Partial Pay Installment Agreement strategy on the federal side may not eliminate the Hawaii liability for another half-decade. Plan around both clocks.

The City and County of Honolulu Bill 41 (codified in the Land Use Ordinance) restricts short-term rentals to a 30-day minimum stay outside specific resort districts (primarily Waikiki) and unless the operator holds a Nonconforming Use Certificate or other qualifying permit. The federal tax consequences are separate but related. Under IRC §280A, a vacation-home rental rented fewer than 15 days per year generates no taxable income and no deduction; a property rented 15 or more days and personally used more than the greater of 14 days or 10% of rental days falls into the vacation-home limitation. Substantial services (daily cleaning, concierge) push the activity from Schedule E (passive rental) into Schedule C (active trade or business with self-employment tax under IRC §1401). On the state side, gross rental receipts are subject to GET under HRS Chapter 237 plus the Hawaii Transient Accommodations Tax under HRS Chapter 237D. STR hosts caught operating outside Bill 41 face City fines, Hawaii TAT exposure, and potential federal recharacterization — coordinated representation matters.

Yes. IRC §7345 authorizes the IRS to certify "seriously delinquent" tax debt — currently $62,000 for 2026, indexed for inflation — to the State Department, which may then deny passport renewal or revoke an active passport. The certification reverses when the debt is paid, an IA is in place, an accepted OIC is in force, an active CDP hearing is pending, or Innocent Spouse Relief is in process. For Honolulu residents, the impact is amplified: travel to Japan, the Philippines, Korea, Taiwan, and the broader Asia-Pacific region for family, business, or military operations is frequent, and revocation effectively confines the taxpayer to the United States. Decertification typically processes within 30 days once a qualifying resolution is in place.

Often yes — on income sourced to California even after the move. Under Cal. Rev. & Tax. Code §17041 and FTB Publication 1031's nine-factor residency test, equity compensation that vested while you rendered services in California is California-source income on sale, even years after you relocate. Severance and deferred comp tied to California services follow the same rule. The FTB issues residency audits on a four-to-six-year lookback. The move itself is fully legal — what catches people is filing as a nonresident for the year of relocation without sourcing the pre-move California-earned items properly. We see this pattern with post-2020 Bay Area and Los Angeles transplants who relocated to Oahu after the pandemic-era remote-work shift.

Probably yes for the federal trust-fund portion. IRC §6672 assesses a Trust Fund Recovery Penalty against any "responsible person" who "willfully" failed to pay over withheld taxes — the FICA and federal income-tax withholding portion of Form 941. The IRS conducts a Form 4180 interview to identify responsible persons. Anyone with check-signing authority, payroll-decision authority, or knowledge of the unpaid taxes can be assessed personally — founders, controllers, and operations managers. For Waikiki restaurants and hotel-services contractors, this often catches multiple people because seasonal cash-flow squeezes overlap with payroll decisions. On the state side, the Hawaii DOT pursues unpaid GET, withholding, and Disability Insurance under HRS Chapter 392 against responsible parties personally.

Yes when a federally-declared disaster covers the affected area. IRC §7508A authorizes the IRS to postpone filing, payment, and assessment deadlines for affected taxpayers, often by six to twelve months. IRC §165(h) allows a personal casualty-loss deduction limited to declared-disaster losses post-TCJA. IRC §1033 permits involuntary-conversion deferral on insurance proceeds reinvested in replacement property. The 2023 Maui wildfire (Lahaina) was federally declared and triggered a wide IRS deadline postponement; while the fire was on Maui rather than Oahu, many Honolulu-based businesses with Maui operations, Maui vendors, or Maui-resident employees claimed relief. Hurricane Lane (2018), Hurricane Iniki (1992) legacy claims, and ongoing Kilauea and Mauna Loa volcanic activity have triggered similar relief in earlier years. The Hawaii Department of Taxation generally mirrors federal disaster-relief deadlines for state PIT and GET filings.

Federal tax-resolution fees vary by matter complexity. A straightforward Installment Agreement typically falls between $1,500 and $3,500. A full Offer in Compromise with Form 433 financial analysis runs $4,000 to $7,500. Audit defense depends on the audit type and the number of issues. A U.S. Tax Court petition with case workup and trial preparation generally starts at $6,000 and rises with case complexity. A combined federal-plus-Hawaii DOT GET-audit defense or a federal-plus-California FTB residency audit defense for a Honolulu transplant runs higher because it involves two agencies and two statutes. VTL provides a written fee quote after the free consultation. California Bar Rule 7.1 prohibits comparisons claiming we are cheaper or faster than competitors without verifiable substantiation, so we do not market on price.

Yes. Communications between you and a licensed attorney for the purpose of seeking legal advice are protected by federal common-law attorney-client privilege, subject to the usual exceptions (crime-fraud, waiver, third-party presence). The narrower federally-authorized tax practitioner privilege under IRC §7525 applies to non-attorney CPAs and EAs but does not extend to criminal-tax matters or to written tax-shelter communications. An attorney handling your tax case retains the broader privilege that survives criminal investigation, which matters significantly if a civil audit shifts to a Criminal Investigation Division referral.

For administrative work at the Hawaii Department of Taxation — responding to a Notice of Final Assessment, working with the DOT on a GET or PIT reassessment, requesting a Conference with the DOT — representation runs through a Hawaii Form N-848 Power of Attorney. The DOT accepts representation by out-of-state attorneys, CPAs, and other authorized representatives for administrative practice. For formal litigation in the Hawaii Tax Appeal Court under HRS §232-1, judicial review in the Hawaii Intermediate Court of Appeals, or any matter before the Supreme Court of Hawaii, an attorney admitted in Hawaii is required — VTL refers to local Hawaii counsel for that stage and stays engaged on the federal side. Many Hawaii tax disputes resolve at the DOT administrative stage without ever reaching state court.

Yes, generally. IRC §6331(k)(1) suspends levy action while an offer is pending and for 30 days after a rejection, plus during any timely-filed Appeals review of a rejection. The IRS will not levy on you while a processable OIC is being evaluated. However, the IRS may still file a Notice of Federal Tax Lien during the OIC pendency to protect its position — the lien is not a levy. CSED is also tolled during pendency, which can matter when the original ten-year clock is close to expiring. A poorly-prepared OIC that gets returned (not rejected) does not provide the same protection — processability matters, and Forms 433-A(OIC) and 433-B(OIC) must be technically complete. For Honolulu cases where the state Hawaii balance also matters, the parallel HRS Chapter 231 collection-suspension rules apply to Hawaii DOT collections during pending administrative review.