Delinquent Notices Sent to Taxpayers In Error

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Jim Henshaw, 50, received a letter last month from the tax department saying that in seven of the last nine years, he failed to file his general excise taxes.

The problem? He didn't owe any taxes.

The legislative aide estimates that he spent five hours calling the tax department, scouring materials from their office and filling out at least seven forms to show that he had already paid his taxes. He also sought advice from a certified public accountant — luckily, that was free.

"It was really frustrating and time consuming," Henshaw said. "Anytime you get a letter from the tax department, it's stressful. They can throw you in jail, if they don't like what you say."

Henshaw is one of an untold number of Hawaii residents who received letters from the Hawaii State Department of Taxation in error.

The tax department has sent more than 69,000 letters since 2008 alerting recipients that they did not send in their taxes. The exact number of notices sent in error is unknown. Some lawmakers say that the letters have cost taxpayers hours in unnecessary paper work and significant fees in tax attorneys or accountants.

The letters are just another manifestation of the alleged problems the tax department has had with Montreal-based information technology company, CGI. The state's $25 million contract with the company is the subject of an upcoming report from the state auditor.

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