Question: My family member told me that they weren’t able to renew their car registration because they owed the state tax collector money. Is it true? Is the tax office putting liens on people’s cars, which don’t allow them to renew the registration? I’ve never heard of this before.
Answer: We don’t know precisely what’s occurred in your relative’s case, but yes, in general, state law says that tax liens and encumbrances can prevent a person from renewing their motor vehicle registration.
Per Hawaii Revised Statutes Section 286-46, which isn’t a new law, the state director of finance keeps a public record, known as the “tax lien and encumbrance record,” that lists notices for delinquent federal, state and county taxes, as well as various other legal orders. The law says “the director of finance may require the payment of delinquent taxes and penalties as a condition precedent to (a motor vehicle’s) renewal, registration, or transfer of ownership … .”
The law goes on to say that an overdue taxpayer can avoid being added to this record by setting up a payment plan with the state Department of Taxation if they are unable to pay off the whole tax bill at once.
We followed up with DOTAX on Friday for more information about this tax-collection tactic and its consequences, and hope to publish more on this topic soon.
The department has some information on its website that your family member and others in similar situations may find helpful, explaining that people with tax debts may apply for either a payment plan or an offer in compromise. The former has the taxpayer pay off their debt in monthly installments, while the latter is a written agreement settling tax debts for less than the amount due.
A person must meet five basic requirements to be considered for an offer in compromise:
>> “You are unable to generate future income due to retirement or health issues (a long-term disability or a certified permanent medical condition).”
>> “The value of your total assets (property, cash, investments etc.) is worth less than the tax debt.”
>> “You have no significant passive income streams (i.e. rental, investment, business income) to pay off your debt.”
>> “You have filed the required tax returns through the current period.”
>> “You have not previously received tax relief such as a tax liability discharged through bankruptcy, written off past statute, an innocent spouse relief or any prior settlement.”
Meeting the basic requirements for an OIC does not guarantee approval.
For detailed instructions on how to set up a payment plan or apply for an OIC, go to 808ne.ws/taxdebt or choose from among options listed at tax.hawaii.gov/ collections/.
Q: Will the IRS office be open another Saturday before tax day?
A: Yes, Honolulu’s Taxpayer Assistance Center is scheduled to be open Saturday from 9 a.m. to 4 p.m. for in-person service without an appointment.
The center is located in the Prince Kuhio Federal Building at 300 Ala Moana Blvd.
Auwe
Auwe to the older man on the bus (No. 65 route) who exited near Windward Mall on Thursday. You had on a black coat and carried a messenger bag. You were saying inappropriate things to an underage girl on the bus, including asking for her phone number and telling her your email address. She did not want to talk to you. Right before you got off the bus, you told her you really wanted to see her again. I reported you to the bus driver, the bus company, the girl’s school, and the city and county (via the online “report a problem” online form). — Concerned bus rider
Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.
