Barber’s appeal denied, Westside optometrist charged in separate tax-evasion cases

As Harry H. Ikeda, a Lihu‘e barber, awaits a determination from the Circuit Court on whether he has to go back to jail, state Department of Taxation officials have filed another criminal tax complaint against a Kauaian.

Charged with not filing annual general-excise tax returns from 1997 to 2001 is Dr. Robert K. Ancheta, a Hanapepe optometrist.

Ikeda, who believes that the state general excise tax is unjust and unconstitutional, had his appeal denied last week by the Hawaii Supreme Court, and now faces an earlier-imposed District Court sentence of 45 days in jail and $25,000 fine.

Ancheta did not return repeated reporter phone calls seeking comment this week.

Ikeda was charged in February 2001 with three counts of violating state law by failing to secure a general excise tax license and willfully failing to file his general excise tax returns for 1998 and 1999.

He was convicted and sentenced in January 2002 to one year in jail. All but 45 days were suspended, and he was ordered to pay a fine of $25,000, with $10,000 suspended for a year. With Ikeda’s appeal denied, it is likely he will be going back to jail soon.

In September, he appealed his conviction a second time to the state’s highest court, but they sent back his second appeal last week because it was not filed on time.

Next, Ikeda will be sending a letter to the American Civil Liberties Union on O‘ahu, hoping ACLU attorneys can help him challenge the carrying out of his sentence, he said.

He believes that he was charged with the wrong crime, a criminal penalty instead of a civil one.

“The state’s persistence in carrying out the wrongful criminal judgment and sentencing against me will be in violation of Article 1, Section 19, of the Hawaii Constitution, ‘There will be no imprisonment for debt,’ because I am literally being sent to a debtor’s prison,” Ikeda said in his three-page letter to the ACLU.

The state Department of the Attorney General has filed a motion with the District Court to enforce the court’s earlier sentence, said Stephen Hironaka, criminal tax investigator for the state Department of Taxation.

“Everyone that does business in the state is required have a license,” said Hironaka, during an interview at TGI’s office this week.

Those who are self-employed are required to pay the $20 one-time fee for the general excise tax license, and 4 percent of their yearly gross revenues to the state, Hironaka said.

Only Hawai‘i residents who are employed by companies paying general excise taxes are exempt from the tax law, he added.

Ikeda canceled his excise tax license when he found out that the U.S. Supreme Court had declared that an individual person was not required to have the license. When he wrote to state officials in December 1998 to get a clarification on the ruling and no state official answered him, he canceled his license and paid no general excise taxes.

“My story begins when I discovered, by reading Supreme Court decisions, the fruits of my labor are my property that cannot be appropriated against my will no matter what or converted to a crime. My right to a livelihood is a fundamental, ‘God-given’ right,” said Ikeda in his letter.

“Reflecting back on 32 years working as a barber, I never charged anyone a tax for a haircut, yet believed that I was forced to give the state a 4 percent cut of my hard-earned labor,” wrote Ikeda.

“Within a week or so, the District Court will send me back to prison,” said Ikeda in his letter.

“I am hoping and praying that your organization will help me, which will also help the mom-and-pop outlets that are engaged in common-law livelihood. I will appreciate your early response, as the state is intent on seeing that I am made a public example of what happens to anyone who refuses to volunteer into the privilege tax program — severe criminal punishment, whether or not lawful,” he continued.

Hironaka said that Ikeda is not a target. “We are looking for a pattern of three, four, five years” of non-payment of the general excise tax, he said.

“We try to go after egregious situations,” and Ikeda’s is one of them. Ancheta’s is another, said Hironaka.

Staff Writer Tom Finnegan may be reached at 245-3681 (ext. 226).

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