COMMENTARY
Nothing's certain but death and tax woes

By Bill Hamilton

How does a responsible tax-paying citizen end up becoming a tax scofflaw? That is what I have been asking myself since April after receiving a tax delinquency notice from the Hawai'i state tax collector.

And the notice came after I had paid my 2003 state income taxes in full — or so I thought.

Here are the sordid circumstances that I would guesstimate other Hawai'i taxpayers have found themselves in as well. I use a popular software package to prepare my taxes. Last year, thanks to a rebate incentive by the software company, I decided to submit my federal taxes electronically.

I was surprised to find that the electronic filing system actually worked. And I saved on computer printing costs and stamps to boot!

This year the software gave the option of filing both federal and state taxes electronically. Because of last year's painless experience, I figured I might as well. On April 10, my federal and state returns went off into cyberspace; a day later, I received notices that both had been accepted.

I had a balance due on the state form, so the next day, April 12, I mailed a check to the state tax collector for the amount due.

On April 28, just eight days after the state tax due date, I received a letter from the tax collector informing me that I was delinquent in paying the 2003 amount due and that interest was now being assessed.

The following morning, I called the phone number listed on the tax-delinquency form and listened to a busy signal for the next two hours of redial after redial. Voting for Jasmine was easier than trying to reach the so-called customer-service hot line.

While trying to get through, I finally decided that my check must have gotten lost in the mail. I called my bank and discovered that the check had not been deposited. I was asked if I wanted a stop-payment order put on the check. I said yes, because we all know that you don't mess with the IRS or state tax collectors.

You pay what they tell you to pay when they tell you to pay — or you will spend time in jail, plus pay fines, lose your house, spouse and children. We all know this is true.

So I wrote a new check, including the interest they said I owed, and immediately took it to the post office to mail. I then sent a fax message to the tax collector, identified my assigned case number, detailed exactly what I had done, and alerted them to the check number that should be deposited and the check number to destroy if the check ever showed up.

It only took about 20 redials on the fax number to get through.

A couple of hours later, I received a phone call from a customer-service person in the tax collector's office informing me that my fax had been received.

She then informed me that the delinquency notice had been sent to me in error! She said that tens of thousands of checks were yet to be opened and processed, and my payment was likely in there somewhere. She could not explain how the error occurred but recommended that I should file an amended return if I wanted the interest amount back.

Yeah, right, I'm going to go through the entire tax return process again to get back $12.

No way. Consider it a donation, Gov. Lingle.

May rolls around and another tax delinquency letter appears in my mailbox. My tax bill keeps increasing, as now I owe a $15 penalty, plus interest, because the tax collector tried to deposit the check I had put a stop-payment on — and earlier had informed them not to deposit. Trying to avoid going to the slammer, I immediately wrote and mailed another check to cover this latest development.

I sent an accompanying letter protesting the charge, but I guess it must have ended up in the wastebasket, because no customer-service person called to tell me to file another amended return.

June is now here, and I fully expect to receive another notice of tax due. I don't know why it took me so long to figure out that this must be a tactic of the current administration to reduce the state deficit.

It is an ingenious way to pull in easy money, because no one fools around with the tax collector. Why chase after those who fail to file any return when the state can go after responsible taxpayers who pay without question?

So now I set aside in my budget an extra $25 a month to pay future tax delinquency notices.

I will never file my state taxes electronically if I have a balance due. From now on, my return is sent snail mail with a check stapled to the return (no paper clip, which allows the chance that the check might slip off).

I'm sure using a staple will generate a penalty of some sort, but with my $25-a-month reserve fund, I can afford it — and help Linda balance the budget.

Bill Hamilton is director of the University of Hawai‘i Press.