S.B. 320 - Hawaii Taxpayer Protection Act

• Requires tax return preparers to obtain and maintain a valid preparer tax identification number (PTIN) issued by the Internal Revenue Service before preparing returns or refund claims for compensation.

• Prohibits tax return preparers from preparing returns or claims for refund without a valid PTIN and requires disclosure of the PTIN on returns or claims when required by the Department of Taxation.

• Establishes tiered penalties for violations: $100 per violation for the first 100 violations, $500 per violation for violations 101-500, and $1,000 per violation for all subsequent violations, with each return or claim constituting a separate violation.

• Allows the director of taxation to waive penalties in whole or part for reasonable cause and provides procedures for preparer appeals and refunds of overpaid penalties.

• Authorizes the director of taxation to seek injunctive relief in circuit court to prevent tax return preparers from continuing violations or, in cases of continual or repeated violations, to enjoin them from acting as tax return preparers.

• Effective January 1, 2022.