The state of Hawaii’s sole criminal tax investigator was on Kaua’i yesterday, and at least one Lihu’e businessman wasn’t happy about the rare visit. Harry Ikeda, of Ikeda’s Barber Shop on Hardy Street, was cited for operating a business without
The state of Hawaii’s sole criminal tax investigator was on Kaua’i yesterday, and at least one Lihu’e businessman wasn’t happy about the rare visit.
Harry Ikeda, of Ikeda’s Barber Shop on Hardy Street, was cited for operating a business without a general excise tax license, and with not filing tax returns for 1998 and 1999.
Stephen T. Hironaka, the state’s criminal tax investigator since 1995, said the three charges against Ikeda were the first he has filed on Kaua’i.
Ikeda’s first day in court on the trio of misdemeanor charges against him is scheduled for March 6 at 8:30 a.m. in Kaua’i District Court.
According to Hironaka, each count against Ikeda carries a maximum penalty of one year in jail and a $25,000 fine.
Hironaka served Ikeda Wednesday morning.
The tax investigator pointed out that the other three barbers in the shop were not charged.
“Each of them operates as a Class C (sole proprietorship) operator. It is not a corporation,” Hironaka explained.
Hironaka said he hoped Ikeda would plead to the charges against him.
“Mr. Ikeda has to come to grips with reality. He should plead guilty and try to get a deal,” Hironaka said, noting that in the 50 previous cases he’s made against state businesses since 1995, he has never lost.
“We have had judicial fines in excess of $500,000 (assessed) and civil penalties and fines of $8 million (assessed against previously charged state businesses),” Hironaka said.
Hironaka added that some offending business operators also go to jail.
Hironaka said the cases he’s made are the state’s attempt “to give the public a sense that it’s a level playing field.”
But Hironaka stressed that the state is neither hardheaded nor hardhearted.
“There are times when circumstances are mitigating enough that we will not file. Say a person has terminal cancer. We’re not going to go after someone like that,” Hironaka said.
“We’ve had people walk in our office who owed millions of dollars of taxes. We have a policy on voluntary compliance. If they come in and I haven’t started an investigation, we will not prosecute them. But once I’ve started an investigation, all bets are off,” the tax investigator said.
Hironaka, a retired Internal Revenue Service supervisor, said the state is looking for someone to work with him.
Hironaka said that although Ikeda was his first case on Kaua’i in six years, it wouldn’t be his last.
“I’m working on something much bigger right now. Millions of dollars are involved,” he said, declining to identify the target of the investigation.
Staff writer Dennis Wilken can be reached at 245-3681 (ext. 252) and mailto:dwilken@pulitzer.net
