Section 18-231-3-14.24 - Records prepared automated data processing systems(a) An automatic data processing (ADP) tax accounting system may be used to provide the records required to verify tax liability. All ADP systems used for this purpose shall include a method of producing legible and readable records to verify tax liability, reporting, and payment. The following requirements apply to any taxpayer maintaining records on an ADP system: (1) The ADP system shall be able to trace any transaction back to the original source or forward to a final total. If detailed printouts are not made of transactions at the time they are processed, the system shall have the ability to reconstruct these transactions. The system shall be made available upon request to the department for inspection and testing.(2) A general ledger, with source references, shall be prepared to coincide with financial reports for tax reporting periods. Where subsidiary ledgers are used to support the general ledger accounts, the subsidiary ledgers also shall be prepared.(3) The audit trail shall be designed so that the details underlying the summary accounting data may be identified and made available to the department upon request. The system shall be designed so that supporting documents, such as sales invoices, purchase invoices, and credit memoranda, are readily available.(4) A description of the ADP portion of the accounting system shall be made available to the department upon request. The statements and illustrations as to the scope of operations shall be sufficiently detailed to indicate:(A) The application being performed;(B) The procedures employed in each application, which may be supported by flow charts, block diagrams, or other reasonable description of the input or output procedures; and(C) The controls used to ensure accurate and reliable processing. Changes in the ADP system, together with their effective dates, shall be noted.
(5) Adequate record retention facilities shall be used for storing tax information, printouts, and all supporting documents required by law.(b) Compliance with standards promulgated by the Internal Revenue Service for ADP systems to be in compliance with section 6001 (with respect to records required to be kept by every person subject to any federal tax) of the Internal Revenue Code of 1986, as amended (such as Rev. Proc. 91-59, 1991-2 C.B. 841) shall be considered sufficient to comply with this section.Haw. Code R. § 18-231-3-14.24
[Eff 8/18/94] (Auth: HRS §§ 231-3(9)) (Imp: HRS §§ 237-41, 237D-12, 238-9, 243-9, 244D-9, 245-8, 251-11)