Renters who needed financial relief inadvertently exposed tax evaders, state says

Updated: Dec. 17, 2020 at 4:15 PM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - Over the course of the pandemic, thousands of renters who couldn’t pay their monthly bills applied for help from the state’s Rent, Relief & Housing Assistance Program.

Nearly 13,000 renters actually received the benefit, which was funded by CARES Act money and was paid out directly to their landlords.

In all, more than 18,000 people applied for relief ― and many of them inadvertently exposed landlords who didn’t have General Excise Tax licenses and had likely been able to avoid paying taxes on rent revenue.

Not only did that discovery disqualify the renters from the assistance, it now has the state’s tax office on alert.

“We would pursue, especially in this particular situation, when we have information of known violations, of course we’re obligated to go and pursue,” said Isaac Choy, the Interim Director of the State Tax Department.

It isn’t just landlords, either. Hundreds of gig workers and others who tried to get help from the Pandemic Unemployment Assistance program also were exposed, especially small business operators who depend on cash transactions, like those who operate at craft fairs.

“Non-compliance in many areas,” Choy said, “A lot of naughty taxpayers, and it’s our job to make sure they go and pay their share.”

Choy said he understands times are tough right now but says they can’t let violations go unchecked.

He encourages people who have avoided taxes to come forward on their own so they can work together to fix the issue.

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