Tax Crackdown
Price of Paradise · Hawaii Public Radio · aired 1996-03-24
Guests: Ray Kamikawa (Director of Taxation, State of Hawaii); Stephen Pingree (attorney)
Duration: 1:04:54

[00:00:01] Randall Roth: Good morning. This is Randy Ross, host of the Price of Paradise Radio show. We're broadcast live each Sunday morning on KHPR, 88.1 FM, KKUA 90.7 FM, and then Sunday evenings at 8:00 on KIFO 1380 AM. Our goal on this show is lively and informed dialogue. Our topic this morning is the tax crackdown and with me in the studio to discuss it are Steven Pingree and Ray Kamikawa. Steven has his AA degree in English from Foothill College, BA in Sociology from the University of California, San Diego, and a JD degree from Cal Western in San Diego. He's been a trial lawyer for 20 years, the last 11 of those years specializing in criminal tax defense, representing taxpayers who've been charged with tax crimes like failure to file a required return or tax evasion.
[00:00:54] Randall Roth: Currently, he's representing an attorney in a tax preparation service charged with criminal failure to file general excise tax returns to the State of Hawaii. I might add that Steven has his 50-ton sailing master's license and has over 20,000 blue water miles cruising various oceans. Good morning, Steven.
[00:01:13] Stephen Pingree: Good morning, Randy.
[00:01:14] Randall Roth: Also in the studio is Ray Kamikawa. Ray has served in the position of Director of the Department of Taxation here in Hawaii since January of 1995. Prior to that appointment, he was a tax attorney and partner with the law firm of Chun Kerr Dodd and Kaneshiro. Ray's practice was concentrated in the areas of tax planning for business, real property transactions, foreign investors in the United States, and exempt organizations. He served as an adjunct professor at the William S. Richardson School of Law teaching a three credit course in corporate and partnership taxation. He co-chaired the tax committee of the Chamber of Commerce and is a past chair of the tax section of the State Bar Association.
[00:01:51] Randall Roth: His BA degree is in economics from the University of Hawaii at Manoa, and he has a juris doctorate degree from George Washington University National Law Center. He has a degree beyond the law degree, and it's called a Masters of Tax Law degree from Georgetown University Law Center. Ray was formerly with the Office of Chief Counsel of the Internal Revenue Service. That's more or less the law firm for the IRS. He was stationed in Washington, D.C., and then in San Francisco and Honolulu in their district offices. He also served as a Deputy Attorney General for the tax division for the Office of Attorney General for the State of Hawaii. Good morning, Ray.
[00:02:26] Ray Kamikawa: Good morning, Randy. Good to be here.
[00:02:28] Randall Roth: Uh, Steven and Ray, each have an article in this morning's advertiser, page B3. And in fact, uh, Ray, that they've got your picture on that page twice, I notice uh. We're kidding. There's a a cartoon right in the middle of of the two articles. And uh, Ray, it it doesn't look uh quite like you at all. Well, no, uh, if you talk to my staff, sometimes I think they would agree that they sort of look like the uh the ogre.
[00:02:54] Ray Kamikawa: Maybe, maybe they've admitted that.
[00:02:55] Randall Roth: Well, we're talking about tax crackdown and initially, what we want to do is just fairly quickly get out on the table, uh, what's going on. Ray, your piece more or less says, we're cracking down, right?
[00:03:09] Ray Kamikawa: I think what we are seeing is that we are taking the approach that we need to administer the tax laws fairly. That means we need to make sure that the laws are being enforced against all taxpayers uh evenly in a manner that doesn't show favoritism, uh in an objective way uh and to basically crack down on those who do not comply with our laws.
[00:03:37] Randall Roth: So if you don't crack down on those who are not complying with the tax law, you're saying that's unfair to everybody else?
[00:03:45] Ray Kamikawa: Everyone needs to feel that taxpayers are bearing their fair share of the tax uh liabilities in the State of Hawaii. That's the only way that people will feel uh that the tax system that we have is basically fair to everyone.
[00:04:00] Randall Roth: Steven, that makes a lot of sense to me and yet you're using that word fair uh, but you're saying it would be fair to do something different than what Ray is doing. I think it's interesting that Ray uses the word integrity in his article because uh, I believe he's talking about integrity, meaning, uh, cracking down hard and equally on everybody. Uh in fact, I think the problem that this that faces this, the citizens of the state, in the taxpayers is the historical one, uh, that the state lacks integrity, especially the Department of Taxation, uh in the sense that people do not feel, taxpayers do not feel that the state has integrity when it spends the money.
[00:04:40] Randall Roth: And how it allocates the tax revenues, it also in the past, certainly how the state has collected tax revenues. And I think it's bad policy to suddenly without notice to the public, to the business tax people crack down and selectively single out high profile taxpayers in the community, such as an attorney, a real estate company, a tourist company and a tax preparer. Uh purely for the political expediency of gaining publicity. In fact, shows like this and newspaper articles uh give the state that publicity at the expense of these individuals, and we're talking about criminal charges which carry prison sentences, and penalties so the effects on these individuals, uh, is quite serious. Well, let let me ask you, one of the points that you raise and and and I think we're going to have a chance to talk about all of them because it sounds to me like each is is an important point. But one of the points that you raise is that there wasn't any notice.
[00:05:40] Randall Roth: Uh, I was going back through a a file that I keep of uh of articles that have appeared in the newspapers over the last year or so, and uh, a lot of headlines saying things like, and these are quotes from headlines, No Mr. Nice Guy. And they were talking about Ray Kamikawa, I think. Here's another one, crack down on tax cheats. Here's a third, Island cheats are targeted. Here's the heading of an advertiser uh editorial, Tax crack down, state goes after scofflaws. Those are people who don't pay their taxes. Isn't that notice?
[00:06:11] Ray Kamikawa: Of course. Recent notice. The problem is, and I don't think most people understand this, that the state is prosecuting these selected individuals under the old law, that's prior to July of 1995.
[00:06:23] Randall Roth: So it's things that they arguably did before all of these headlines came out?
[00:06:28] Ray Kamikawa: That's correct. In fact, the years in question range from 1990 through 1993.
[00:06:34] Randall Roth: Okay. So you're saying that that before Ray took over the Department of Taxation, uh its practices were were relatively lax, mowing taxpayers into what I'll call a false sense of security. They behaved the way they had always behaved, but then all of a sudden, the rules change in midstream and they find themselves criminally prosecuted for doing what in prior years had um not generated any sort of consequences at all.
[00:07:01] Ray Kamikawa: Yes, that's correct. Ray Kamikawa, what say ye? There's a reason why the Department of Taxation is given very strong powers under the law, both civil and criminal. And that's because taxes is the lifeblood of government. We need a strong tax agency to bring in collections to be able to fund these very important state programs. And I think Steven Pingree uh basically was correct in saying old law, but that's the key here. It was the law. It was the law forever basically that if if you violated our tax laws and were deliberate in that violation, you were subject to criminal penalties. There was no representation made by the department in previous years that they would not prosecute under the old law.
[00:07:45] Randall Roth: And so even in in your article, you note that there hadn't been any criminal prosecutions for for a long time prior to your coming on board. But you're saying people should have realized that if there's a law out there, they should be obeying it even if others hadn't been prosecuted for many, many years.
[00:08:02] Ray Kamikawa: Yeah, especially those individuals who should know better who advised other people of uh the laws and who knew that the laws were there.
[00:08:10] Randall Roth: Well, and that brings us to another point you made in in your article, Steven, about selective prosecution. You are under the impression that that the Department of Taxation has really targeted some high profile people like attorneys or accountants who prepared taxes, that sort of thing to make an example of them. Uh what are your thoughts on it?
[00:08:27] Stephen Pingree: Well, specifically, that's correct. Look at the the four companies who are individuals who have been charged. A tourist industry, attorneys, tax preparation, and also, I understand a real estate company on Maui. And I'm sure there are thousands of taxpayers in this state who have not filed GE returns in the and the Department of Taxation knows about them and they went through that list of thousands and they picked out the the individuals in targeted industries that represent that would generate the highest amount of publicity because of their profile.
[00:09:01] Randall Roth: Well now, what's wrong with that? If if they only have so much in the way of of resources, isn't it natural that they would want to to make as big an impact or have as big an impact with those resources as possible that that they'd want to get the headlines so everybody else would get the message?
[00:09:15] Ray Kamikawa: Well, what seems to be lost here is that we live in the United States of America, and we have a U.S. Constitution, which has prohibitions against selective prosecution. Oh, things like equal protection under the law. Yeah, the law.
[00:09:26] Randall Roth: I remember Law School. Ray Kamikawa, what what do you think about that?
[00:09:30] Ray Kamikawa: As with any enforcement agency, we have a uh cases that come to us uh that are brought to our attention with criminal potential. We have to sort through these cases, filter out the uh the weak cases, and when in the process of doing that, we take a very deliberate approach in evaluating a case for criminal potential. In in tax cases, we look to see whether someone had the requisite amount of income to report, whether that person did report the income, and most importantly, whether that person deliberately failed to comply with the tax laws. And and deliberate is something that we take very seriously. We're not going to prosecute someone on the street who's just a wage earner because uh that person may have forgotten to do it, may not have uh remembered to do it.
[00:10:22] Ray Kamikawa: We don't prosecute people for oversights or negligence.
[00:10:25] Randall Roth: So you're saying that the the people who give you a a a high profile case are people that ought to know better.
[00:10:31] Ray Kamikawa: I'm not sure about high profile, high profile is what the media turns it into. What we look to are people who should know better. Uh we're not going to prosecute every case. We're going to prosecute those cases involving individuals who had the requisite knowledge and the intent, and a lot of that has to do unfortunately, with the business that they're in. If they're an attorney, they're advising other people to comply with the laws, they ought to know better. If they happen to be a return preparer, uh that's even worse. They're they're advising people on how to comply with the law, they ought to take care of their personal situations as well.
[00:11:06] Randall Roth: Okay. Well, we've got on uh on one of our lines Sam Slom, who is the head of Small Business Hawaii, an association of some three or 4,000 small business owners here in Hawaii. Sam, good morning.
[00:11:18] Speaker 1: Good morning, Randy and uh good morning to your guests.
[00:11:21] Randall Roth: Uh, I understand that you have an opinion on this issue.
[00:11:25] Speaker 1: Oh, I guess if you twist my arm hard enough, I'll come up with an opinion. Uh, I just have to say though, what a way to start a Sunday morning talking to three attorneys. I mean, that's, you know Well, thank you. Thank you, Sam. We we appreciate that. There are there are better things to do, but the sun is shining out here in East Honolulu. Uh let me just say first of all, as a as a general statement, I I firmly believe as Steve wrote in his column, uh everyone certainly should follow the law. Um, I also believe however that everyone should be working much harder to change the laws here because the laws here are unconscionable, particularly when we're talking about taxes.
[00:11:58] Speaker 1: And uh Ray starts off in his article and he said again this morning that taxes are the lifeblood of government. I think that Ray and Governor Cayetano and the 76 legislators should uh realize that uh taxes and the the hard work going into producing those taxes are really the lifeblood of our citizens. And what this state is doing, of course, is destroying our citizenry. Uh we are forcing businesses to close, we are losing thousands of private jobs, uh we are pushing people out of the state, particularly the the most productive and risk taking people. And we are um we are compressing our tax base, all in the name of trying to enforce the law or to try to get tough on on tax scofflaws.
[00:12:42] Speaker 1: I I think it's interesting that we use terms like scofflaws, which of course most people here, unless they've seen Les Miserable or something else or have read, they don't even know what we're talking about. Uh but uh Ray and his department uh have made a real departure here by trying to criminalize people that in many cases may be guilty at best of a technical violation. Uh and I think it's interesting that a person can now go to jail in the State of Hawaii for up to a year for failure to file a GET, but if they batter their spouse or even murder someone, they're probably either not going to jail or they're out a lot quicker.
[00:13:17] Speaker 1: So our priorities here, I think are upside down. Also Steve mentioned a very important point uh while the state says that it has the duty to enforce the law and to collect this money, um a lot of people have been very concerned that this state has continued to waste untold millions of dollars. The state overpays its state employees for periods of up to 10 to 15 years and doesn't even realize it. We wasted money on the State Capitol. We have the high three for chosen government officials. Uh we allow government people to live luxuriously and lavishly and spend on koa wood desks and things like that. And then we tell small employers and small businesses that you better pay up or else.
[00:13:57] Speaker 1: And when Steve says that the policies are very selective under Mr. Kamikawa, he's absolutely correct. I get now maybe 5 to 7 telephone calls a day from small business owners who are being harassed by the State Department of Taxation. And what they want to know is, why does Mr. Kamikawa and his crew of henchmen uh make a very well publicized raid for example, on a small uh gasoline dealership uh to bring in I think they I think they raised about $800 to $1,000 in that raid and completely brought the business to a standstill. When there are very high profile businesses that happen to be campaign supporters of the current administration, who not only are uh many hundreds of thousands of dollars in arrears, but also seem to continue to do business with the state under contracts, bid and non bid.
[00:14:46] Speaker 1: And I think that's the non uh non-enforcement or the selective enforcement that Steve is talking about and I thoroughly agree with that.
[00:14:53] Randall Roth: Okay, Sam, I really appreciate you sharing your thoughts with us this morning. Have a good day. Okay, Aloha. Yeah, bye bye. Well Ray was was there uh anything that you just heard maybe one or two things and and we really can't go through all of it and I know a lot of it didn't really address you and and your job. But focusing on those things that Sam said that do relate directly to the Department of Taxation and and the policies that you've been a part of determining and and implementing. Um what are your thoughts?
[00:15:22] Ray Kamikawa: Well, you know I can't disagree with Sam's comment about the overall tax burden in Hawaii. We do have a heavy tax burden. Uh that has a lot to do though with the will of the people and the kinds of services they want to see from state government. But that aside, the tax burden is basically exacerbated when you don't have compliance and when you show people uh in in various ways that you're not going to be tough uh that that creates an atmosphere of lax enforcement. People feel that they don't have to file, they don't have to pay their taxes. That imposes an additional burden on the vast majority of taxpayers who want to file and who do file on time and pay their taxes on time.
[00:16:04] Ray Kamikawa: This comment about uh cracking down on small businesses, I think what you see here is publicity uh about our efforts uh on certain kinds of businesses and individuals. What the taxpayers don't see are the very large audits we have targeting large corporations who do business in Hawaii, but are not located here. Those things don't make the news because they're under audit, these companies pay up on time. As far as cracking down on say a service station he called it a raid. We don't take those kinds of action unless the taxpayer ignores us or does not cooperate with us. We're not going to have a situation, pyramid. By that I mean, a situation where taxes are continuing to accrue, where taxes continue to to not be paid to the department with an outstanding balance in the hundreds of thousands of dollars.
[00:16:55] Randall Roth: And and the specific item I think he was referring to was written up a lot in the papers six months or so ago about a fellow with a Texaco service station, and he was pumping gas and all of a sudden a number of people from the department came in, emptied out the cash register, one had a mental picture of them emptying out his pockets. Uh and I think you were quoted at the time as saying, uh we didn't take this action quickly, that we've gone through a number of of attempts to to collect from him. And it was our impression that he was paying other creditors but not paying the state, and you felt as though you had been pushed to that.
[00:17:28] Ray Kamikawa: We don't take aggressive collection action until we've exhausted all of the other remedies available to us. Okay. We have no choice at that point but to take that kind of action and the department is no longer shy about basically exercising all the rights given to us under the law in those circumstances.
[00:17:45] Randall Roth: Steven, as I understand your article in this morning's paper, you're saying that people should file required returns and people should pay their taxes on time, and we do need to have uh enforcement, there's no argument about that. Um, but you're suggesting because of past practices, that what Ray is doing is really different. There needs to be a transition that that provides fairness to everyone. And you mentioned tax amnesty. Could you tell us a little bit about that?
[00:18:15] Stephen Pingree: Yes, before I comment on amnesty, I'd like to make a comment on compliance because it's a big word in the tax business, and Ray talks a lot about compliance. I believe very strongly that voluntary compliance with the tax laws is directly related to the confidence that the taxpayers have in the integrity of the state government, that is that the state government is going to to collect not only collect, but spend the money wisely. And when you have a state government like we have in Hawaii that one, has a very anti-business attitude and obviously doesn't spend money supporting businesses from a overall state policy. And also a state government that squanders money and Sam mentioned a lot of those instances, you don't have any
[00:19:00] Stephen Pingree: were very little belief by the taxpayers in the integrity of the government. So you're not going to get people to voluntarily come forward. That's why Ray is having to take a very heavy-handed and selective approach to generate publicity, to scare people into compliance.
[00:19:19] Ray Kamikawa: But you're not saying somebody who disagrees with the policies of of the administration at any given time uh shouldn't be following the law, shouldn't be paying taxes for example. I mean, whether whether it's an administration that you voted for or or or adamantally opposed to, we still have to follow the laws, don't we?
[00:19:39] Stephen Pingree: That's correct. And I'm not talking about tax protesters. But let me take the specific example of gross excise. The problem is that in the past, until Ray's administration quite frankly, uh the practice in this state, well known to attorneys and accountants and business people, has been never to prosecute for the failure to file gross excise tax returns. In fact, the the in fact, the tax department would solicit the filing of late or non-filed GE tax returns, would assess a penalty, and if the taxpayer could make a substantial payment, more than likely, uh the penalties would be waived, and sometimes even the interest would be waived for some penalty.
[00:20:17] Ray Kamikawa: So, so if money was tight, the business person would simply not file for a while until they had the money to pay. And quite frankly, what I call that is cash flow management and it became an accepted practice in this state. And so now to suddenly prosecute people for uh and remember, now these are for old acts under the old law that that was in effect during the time that these collection practices by the state were taking place.
[00:20:44] Stephen Pingree: Yeah. And that goes to what I was asking a little bit ago, tax amnesty. You're saying give those people an opportunity, you know, get good notice out there so that they can get those returns filed, make arrangements to pay the tax, and then crack down.
[00:20:56] Ray Kamikawa: That's correct. A tax amnesty programs have been um undertaken by other state governments throughout the country with with a lot of success. I think California had one not too long ago, but basically the concept is, you do a tremendous amount of publicity. Ray would be speaking in public forums, newspaper, TV, etc., about what the law is and how people can come in and file their returns. Generally, there's a waiver of penalties and interest as long as payment is made. And then there's a very clear deadline given for when the crackdown will begin and then once that deadline has passed,
[00:21:35] Stephen Pingree: No mercy. No mercy on anybody.
[00:21:37] Ray Kamikawa: In your article, even if it's somebody's auntie. That's right. Okay. Ray, Kamikawa, why don't you give us a response to that, and then we're going to invite calls.
[00:21:45] Stephen Pingree: In in most states that adopted amnesty, amnesty was very productive in those states that had very strong enforcement and compliance initiatives. Uh they had a reputation for strong compliance projects and prosecutions. Hawaii doesn't have that reputation.
[00:22:06] Ray Kamikawa: Oh, I see, and and you you want to get that reputation and then maybe we talk about amnesty. Maybe Maybe not. I still have to be convinced. But like Steve, I was in private practice and came across a lot of clients who felt that the state would not find them. They knew it was wrong.
[00:22:22] Stephen Pingree: Nice, and and a lot of people, let let's face it. This this I I dispute whether what the department's practice was. We still solicit returns and we still work with people who want to work with us, but in those egregious cases where people should have known better, knew what the laws were, but failed to follow the law, I think prosecution is warranted.
[00:22:41] Ray Kamikawa: So if we pretend for a minute or we assume for a minute that you really think tax amnesty makes sense, that you don't disagree with Stephen on that, we're talking about timing that that maybe you would say the first step in the direction of tax amnesty is to develop a reputation for tight compliance procedures on the part of the department.
[00:23:00] Stephen Pingree: It's not only a reputation, we have to have it in fact.
[00:23:03] Ray Kamikawa: And the reality. Okay. Well, you're listening to the Price of Paradise radio show. We call it Pop Radio. This is the time in the show that we invite callers to get involved in this conversation. If you would like to ask a question or make a brief comment, just call us at 955-8821. For neighbor Islanders, the number is 1-800-955-8821. And Nick Garcia, if you're out there, I evidently wrote your phone number down incorrectly, so maybe you could call us as well. Again, if you'd like to get involved in this conversation, the number is 955-8821. Well, our lines are almost completely full, so let's start moving through the callers quickly. Let's go to Joe in Waikiki. Good morning, Joe.
[00:23:22] Speaker 2: Uh, good morning. I'd like to make a couple of comments if I may. Uh, for Mr. Pingry, sounds like the Twinkie defense, uh, the Twinkie defense, for people who don't want to pay and that's good, we can see that working. Uh, for Mr. Slome, the risk takers are leaving the state and those people, in turn, we were subsidizing because maybe there were too many similar businesses. Maybe those businesses are there's no need for them, or maybe competition has weeded them out. So let's stop subsidizing the risk takers and for the Director, I thank him for his efforts in getting all people to pay their taxes properly, uh and not just stick the few that follow the rules. What are we going to have? Anarchy? And the other point for uh the the tax director is now that we file our uh federal tax page with our state tax, maybe he can pass information over to the city and county so that the city and county can peruse the homeowner's exemption to which people get up to $120,000 exemption on their uh city and county taxes, uh uh and see who's getting a homeowner's exemption that maybe claims residence in Nevada or some other states that which have no state tax. It would be very helpful to us to make everyone comply with the laws and pay an equal share. If the people don't like the tax situation here, maybe they ought to move to Nevada.
[00:25:01] Ray Kamikawa: Joe, you've you've made some very interesting comments. I appreciate your call this morning. Thank you. Ray Kamikawa.
[00:25:07] Stephen Pingree: Joe, I'd like to offer you a job at the department if you're available.
[00:25:10] Ray Kamikawa: He sounds good, doesn't he? Uh, one of the things that Joe mentioned, inter agency cooperation, that's one of the things that I think uh really marks your administration, Ray. You've been doing a lot more of that than I think or that I know of in any state.
[00:25:25] Stephen Pingree: Well, you know, it's basically Governor Governor Cayetano asking the departments to work with each other. And we have been with the Department of Commerce and Consumer Affairs, the Public Utilities Commission, and this relationship with the Internal Revenue Service now, where we share information with the Internal Revenue Service, helps us out with our computer systems. It's really helping uh increase the level of compliance.
[00:25:46] Ray Kamikawa: Okay, let's go to Sylvia in Honolulu. Good morning, Sylvia.
[00:25:49] Speaker 3: Uh, to break how I call, I just say keep him. Uh, uh, Sam Slome is one of the people I love to love. This is the first time I disagreed with anything he said. Uh, I'm at a very low-income person, I have to pay interest. If we do have amnesty, I believe they should at least pay interest on the money they saved.
[00:26:11] Ray Kamikawa: Okay, thank you, Sylvia. We appreciate your call. Let's go to Linda from Honolulu. Good morning, Linda.
[00:26:17] Speaker 4: Good morning. This is a question for the tax director. If he claims that he's being fair, that why why don't they go after all the vendors at the flea markets who are competing against legitimate retail businesses who do have to pay taxes?
[00:26:29] Stephen Pingree: That's a great question. Ray, when I go to a flea market or something like that, I always have the sneaking suspicion that a lot of those folks aren't paying excise taxes.
[00:26:38] Ray Kamikawa: Yeah, I agree with Linda. There are a lot of instances like that where we need to to be a little more aggressive. The problem with a flea market is that we need to allocate a whole bunch of resources to track these people down, to make assessments, because there's inventory problems, once we make an assessment, we have to follow up and collecting, and these people are very mobile.
[00:26:58] Stephen Pingree: So you've got to spend a dollar to make a dime.
[00:27:00] Ray Kamikawa: And and we think our resources are better spent elsewhere. There's an opportunity cost for for spending too much time on one particular project, a time intensive project like that. But I want to assure the listeners that we do have legislation pending uh with this legislature that would increase the penalties for not having a general excise license when doing business in Hawaii. And that's going to be uh again, a criminal offense. So, um, this is fair warning now, and I and Steve and I'm giving warning now, to all those vendors out there in the flea markets and elsewhere who are operating businesses without a general excise license, uh they're going to be prosecuted.
[00:27:39] Stephen Pingree: And I know from reading in the newspaper, you have targeted people who own a condo and and rent it out. Uh, in fact, there were four buildings that according to a couple newspaper articles, uh you've started looking at the owners of units in in those four buildings and a fairly high percentage of those folks you suspect have not been paying excise tax and perhaps transient accommodation, the so-called TAT tax when they've been renting it out. Um, do you have any any report on how that compliance project is going?
[00:28:08] Ray Kamikawa: That one project alone brought in about $300,000 in assessments and we're working on collecting on those assessments. But but Randy, you're right. If if we have $300,000 in assessments generated with respect to four buildings, can you imagine how much is out there?
[00:28:26] Stephen Pingree: Okay. Well, let's go to uh another Joe from Honolulu, different than the uh first Joe that we talked to. Good morning.
[00:28:32] Speaker 5: Good morning.
[00:28:34] Stephen Pingree: Uh, what do you have in the way of a question or a brief comment for us this morning?
[00:28:37] Speaker 5: Uh yeah, first of all, I'd like for Mr. Kamikawa to think about this uh why should taxpayers pay taxes when the government wastes so much money every day? Secondly, the sanctions for going to jail and paying a fine for not paying taxes. How can a person pay a fine if they don't have the money? And if you send them to jail, they're not taxpayers. They're tax users. I mean the whole system is so screwed up. I think they really have to go to the basis for our taxing system.
[00:29:07] Stephen Pingree: Good questions, Ray Kamikawa.
[00:29:10] Ray Kamikawa: I can't disagree with the caller uh that there is wasting government with the Cayetano administration, we're trying our best to minimize that kind of waste. But our our job basically at the department is to focus on the collections. That's our mission, and and the fair and equitable administration of the tax laws. Um we have very little control over uh what how the money uh after that uh how it's spent, whether it's spent wisely, efficiently, whether it's spent in a way that you would agree it is proper or not. Uh that's up to uh other policy makers.
[00:29:49] Stephen Pingree: And and you're not just a member of the Cayetano administration, you're you're a big supporter of the Cayetano administration. But I suppose you would say somebody who doesn't like uh the direction that the Cayetano administration is going, should get actively involved in trying to accomplish a change.
[00:30:03] Ray Kamikawa: I think that's part of the political process, that's correct. And and uh again, the tax laws are there at the will of the people.
[00:30:16] Stephen Pingree: will of the people and if the people want it changed, uh they've got to be more active.
[00:30:21] Ray Kamikawa: Okay. Well Stephen Pingry, you've listened to a number of callers and you've heard Ray's response to each of those callers. I'm sure you've got some thoughts to share.
[00:30:29] Stephen Pingree: Well, one comment I'd like to make has to do with the very specifics of a criminal prosecution and the burden of proof. I think it's important to understand that in order for the state to convict an individual, they must prove beyond a reasonable doubt that that individual didn't file and owed a tax. But more specifically, that the individual had the specific intent to avoid the payment or to evade the payment of taxes. And that takes me back and this caller mentioned the Twinkie defense. It's not a Twinkie defense at all to say that if somebody is doing what the state has been sanctioning, that is accepting late filed or non-filed returns and then waving penalties and has, if you will, lolled taxpayers into believing that this is the standard operating procedure of the Department of Taxation. Then it's very difficult, in my opinion, to convict a person of having the specific intent of evading the payment of taxes when all they were really doing was postponing the payment of taxes or using it as a what I call a cash management tool.
[00:32:44] Ray Kamikawa: So you would draw a real bright line between Ray's department's attempts to collect a tax on the one hand and criminal prosecution on the other hand.
[00:33:44] Stephen Pingree: That's correct, because from Ray's point of view, he sees a criminal prosecution as a broad enforcement policy, that is publicity scares all the rest of the taxpayers into compliant. But you have to focus on the individuals that are being criminally prosecuted that have may go to jail, that may have to pay serious fines.
[00:34:04] Ray Kamikawa: So it's not so much the tax crackdown, it's the tax crackdown via criminal prosecution.
[00:34:10] Stephen Pingree: That's correct. And I think it's ill-advised, and it remains to be seen. We have two jury trials scheduled in July and probably late summer.
[00:34:18] Ray Kamikawa: Okay. I assume this is real good for your business, by the way.
[00:34:21] Stephen Pingree: Well, I must admit it is.
[00:34:23] Ray Kamikawa: Okay. Uh you're listening to the Price of Paradise radio show, Pop Radio. If you'd like to ask a question or make a brief comment, you can call us at 955-8821. We have in the studio with us Stephen Pingry, who is an attorney specializing in the defense of criminal tax charges. Um, he represents a number of of taxpayers who have been charged with either tax evasion or a failure to file a required return. Also, Ray Kamikawa, who is the director of the Department of Taxation here in the state of Hawaii and has been a tax lawyer uh prior to that, worked for the IRS, has held a number of very interesting jobs. He's the fellow who's behind this so-called tax crackdown. Again, if you'd like to ask a question or make a comment, the number is 955-8821. If you're on a neighbor Islander uh neighbor Island, just call us at 1-800-955-8821. All we ask is that if you're making a comment, try to keep it uh as brief as possible. Let's go to Donald on Kauai. Good morning, Donald.
[00:35:21] Speaker 6: Oh, good morning. I was just tuning in the radio and and listening to the show. I hope my comments are appropriate. Um, I have a kind of a little pet peeve in that the people that pay transient accommodations taxes, um, have to fill out two forms: GE, general excise, and transient accommodations.
[00:36:41] Ray Kamikawa: It's twice as much work for the taxpayer at least, and a lot more work for the government. Why don't you just request the legislature to change the rate of taxation for the people that pay uh GE under the transient accommodations.
[00:38:00] Speaker 7: It's a good question, Ray Kamikawa.
[00:38:04] Speaker 6: Donald, I guess, the transient accommodations tax needs to be separately accounted for because the tax goes not to the general fund. Most of that tax goes to the counties, and a part of that goes to fund the convention center.
[00:38:19] Speaker 8: I'm aware of that, but you have computers for that.
[00:38:22] Speaker 6: Oh, you haven't seen our computer, or the lack of there of.
[00:38:26] Speaker 8: No, seriously, you know, they, you could you could very easily allocate so much that comes off of that one line in the general excise tax.
[00:38:34] Speaker 7: I I'm assuming that Ray basically agrees with you, Donald, in terms of what we ought to have, and and I think, Ray, at least what I I suspect is happening is that you simply are aware of of the limitation in terms of resources, and you know that's not going to happen tomorrow, but you don't disagree with what Donald's saying, do you?
[00:38:50] Ray Kamikawa: We we appreciate any comments to streamline our procedures, um, and uh, you know, we we hear those comments uh, more than once. Mhm. We have uh, number one, that legal problem about where the taxes are are directed after we collect it, and number two, the practical problem of our computer systems interfacing with those forms. Um, we hope to get a new computer system online. We're trying to get the legislature to buy into our project to acquire new computer systems, which would help not only in interfacing with uh, tax fairs, but to uh, permit us to uh, simplify our forms along the lines that you suggest.
[00:39:29] Speaker 8: But you are keeping, you are keeping that line separate on the GE tax presently, I understand. I mean, there is a separate line for it.
[00:39:36] Ray Kamikawa: Yes, because we it's the only way for us to account for the TAT collections.
[00:39:41] Speaker 7: You know, Donald, the the the issue you raise is is a really good one. Uh, what I would suggest, I I know there's a tax review commission that is working hard right now, coming up with recommendations that they're going to make to the legislature for some real specific changes. Ray's working closely with that group. This is one of the sorts of things that that I think if you could uh, bring to the attention of that group, they have the avenue right straight to the legislature, and I I think it's possible that if, for example, more funding is needed in order to implement something like this, the most productive way to uh, to do it would be through the tax review commission.
[00:40:15] Speaker 7: I I would suggest you give Ray a call. Uh, Ray?
[00:40:17] Ray Kamikawa: Donald, I I would encourage you to write in, uh, with respect to that suggestion and any other suggestion you might have along those lines.
[00:40:25] Speaker 6: All right.
[00:40:26] Speaker 7: Thank you, Donald. We go to Scott in Hilo. Good morning, Scott.
[00:40:29] Speaker 9: Good morning, and good morning.
[00:40:32] Speaker 7: You're on the air.
[00:40:35] Speaker 9: Uh, I'd like to know what the situation is on uh, applying for a passport. Uh, I understand from the application that you have to, uh, have some sort of a tax clearance in order to get a passport.
[00:40:58] Speaker 7: Uh, you know, all three of us in the studio are are I guess, sometimes called tax lawyers, as well as maybe being called other things. Uh, Ray, I I I'm drawing a blank. Do you know what what Scott's referring to?
[00:41:09] Ray Kamikawa: Yeah, Scott, I I applied for a passport a few years ago. I did not see a requirement to disclose whether I was good on any tax liabilities.
[00:41:20] Speaker 7: Scott, can you be a little more specific about the circumstances that caused you to to ask this question?
[00:41:25] Speaker 9: Well, uh, I had a, uh, a small business license, and I was notified and by the state here a while back that due to the fact that I hadn't come across or whatever that they had just cancelled me out that I was no longer on the rolls. Now I just wonder what bearing that would have on my trying to get a passport.
[00:41:46] Speaker 6: Uh, I don't think it's going to have any bearing at all.
[00:41:49] Speaker 9: I'm I'm I'm just a dead duck, you know. Or where, they they don't even know me.
[00:41:54] Speaker 7: Well, I might have used a different expression, but uh, Steven Pinri has a response.
[00:41:58] Speaker 10: Scott, the only comment I have is that the uh, when you do apply for a passport, it is reported to the internal revenue service. Uh, much like a bank would report the interest that uh is paid to you on a what they call a form 1099. So the IRS does have a record that you've applied for a passport, and also when you come through customs, uh, coming back into the country after being out of the United States, the uh, customs officer will check in the computer under your name, and if you, uh, have been brought to the attention of the internal revenue service, at least it will appear on that computer. But I don't know of any specific restrictions on a passport for the non-payment of taxes.
[00:42:39] Speaker 7: Scott, I really appreciate your call this morning. I hope that was helpful to you.
[00:42:43] Speaker 9: Uh, yeah, well, I my my problem is kind of unique. I've been, uh, in very poor health and I just haven't been active and so forth, and uh, but I'm kind of making a comeback and I'd like to, uh, I do have, uh, a situation where I may have to go overseas, uh, a lot of the business thing, but just to just Yeah.
[00:43:05] Speaker 7: Well, I I I I think you're not going to have any trouble at all getting that passport, and and I wish you well.
[00:43:11] Speaker 9: Okay, that's 65 bucks and go on.
[00:43:13] Speaker 7: That's right. Good luck.
[00:43:15] Speaker 9: Okay, thank you.
[00:43:17] Speaker 10: Well, maybe this is a plug for Ray, but uh, I noticed in Ray's article, he talked about voluntary disclosure. If you're having some problems, uh, where you feel that you owe some back taxes, uh, you might call up the State Department of Taxation, and talk to them, or if you're concerned about doing that yourself, contact your uh, tax preparer or perhaps a tax attorney and have them intercede for you.
[00:43:39] Speaker 7: Well and in fact, uh, one could argue that we've got a little bit of a a semantics issue because the voluntary disclosure program that Ray has implemented and describes in in his article, uh, some people would describe as a form of tax amnesty, right?
[00:43:56] Ray Kamikawa: Well, it's an ad-hoc form of tax amnesty. It's on an individual basis. The message we want to convey to the public is that please come to see us before we come to see you. Okay? And Steven, if you have any clients in that posture, please come forward, too.
[00:44:10] Speaker 10: A a reaction, Steven. Well, the problem with voluntary disclosure without a specific written policy by the tax department that they, in fact, will not criminally prosecute an individual if they voluntarily come forward, is it's difficult for an attorney to advise someone who has perhaps broken the law by not filing, to voluntarily, or by evading taxes, to voluntarily go to the Department of Taxation, and say, "I did it. Uh, how much do I owe? Please, don't prosecute me." Because there is a possibility that the state, in certain circumstances, would still prosecute that person. Unless, Ray, would like to make a public policy announcement.
[00:44:47] Speaker 7: And I guess that's the big bright line difference is with tax amnesty, you can tell your client, you know that he will not be prosecuted, but under the current voluntary disclosure process, you say there's always the possibility that you would end up being prosecuted.
[00:45:00] Ray Kamikawa: That's correct. Ray? I'd like to respond to that. The answer to that is to come forward, maybe on a hypothetical basis, laying out the facts of the case, without naming the tax payer.
[00:45:12] Speaker 7: Oh, I have this friend, right? That's right. Right. And he's a little worried about this.
[00:45:16] Ray Kamikawa: That's right, because what we like to do is is again, take this on a case-by-case basis. Determine what the tax payer is all about, the circumstances for not filing, uh, those kinds of factors. Um, and if it's just a matter, as as Steven said, a cash management situation, I think we'd we would be very generous in not uh, initiating a criminal investigation. We also though, need to make clear that if we've already opened a file and we're about to contact the taxpayer, all bets are off. Uh, and that needs to be made clear.
[00:45:50] Speaker 10: Okay. Given that segment then, I would have to advise the listeners that if you feel you have some criminal liability because of non-payment or non-filing, then it would you would be best advised to go to a tax attorney, so that your conversations are within the attorney-client privilege and then have your attorney contact the tax department, as Ray has indicated, hypothetically. In other words, they wouldn't use your name, the attorney would say, "Uh, I have a client who will remain nameless. These are the facts situations, if he comes forward, will you agree not to prosecute?"
[00:46:24] Speaker 7: And and really, when we talk especially about the Hawaii excise tax, there are probably a lot of people out there who should have gotten a license, should have paid some taxes. In many instances, they knew that, but the bother and the cost of compliance was perhaps high compared to the dollar amount involved. Then there are other people that don't even realize, if you do a little bit of work as an independent contractor, you get paid any amount whatsoever, you have to get that license, you have to pay that tax. I suspect, Ray, that if we're talking about technical non-compliance, a pretty high percentage of people in Hawaii are in non-compliance right now. What do you think?
[00:47:01] Ray Kamikawa: I don't know about pretty high percentage. I mean, I'm sure there are people out there. Higher than 10 or 20 percent, right? I I can't speculate. I'm sure there there's that segment out there in the population. But let's make one thing clear, we don't prosecute people who are in a situation where um, you you you are not earning a lot of income where you forget, uh, you've had personal problems, which uh prevented you from filing uh, the returns, Now that sounds like the Twinkie defense to me. in situations where you dispute whether uh income is taxable or not, and we have a lot of those situations that we don't pursue criminally.
[00:47:39] Speaker 7: I think what you're saying is a practical matter, um, businesses and and accountants and attorneys and and people that you would assume know better are in trouble. Well, those folks who don't fall into one of those categories, well, you're going to go after them for taxes, maybe interest and penalties, but probably not criminal prosecution.
[00:47:58] Ray Kamikawa: At a certain level of income, we feel that you ought to know that this income is subject to tax. Um, Sam Slome says that we pick on small businesses, but our first criminal prosecution was against a pretty large retail chain in Hawaii. Uh, they generated over 10 years, maybe, uh, $950,000 in taxes, penalties and interest. And the the unfortunate part about this is that they passed on the 4% to their customers, collected the 4% from their customers, but didn't pay it to the state. There's no excuse for that.
[00:48:30] Speaker 7: Okay. Well, you're listening to Pop Radio. Our topic is the tax crackdown. With me in the studio is Steven Pinri, an attorney specializing in criminal tax defense and Ray Kamikawa, the director of the Department of Taxation for the state of Hawaii. Uh, let's go to let's take Bill from Kailua, and then I've got a couple of other questions that I want to ask, and we'll we'll wrap it up. Bill from Kailua, good morning.
[00:48:51] Speaker 11: Good morning. Good morning, good morning to all of you. Uh, I feel that this uproar over the quote-unquote crackdown, derives from poor judgment with respect to timing. After years and years of relaxed Hawaiian attitude towards this matter, all of a sudden the state comes forward with a tough Draconian attitude that is is uh, less than considered, certainly. I think if it had been a little more careful revelation of the intent, uh, a lot of this confusion could have been avoided. Thank you.
[00:49:29] Speaker 7: Okay, thank you, Bill. I agree.
[00:49:33] Speaker 10: Steven Pinri agrees, and Ray Kamikawa
[00:49:36] Ray Kamikawa: My response is, is there ever a good time? Uh, with any change of administration, you know that policies will change. Governor Cayetano asked me, "Why isn't the tax department bringing charges against people who flagrantly violate the tax laws like any other law?" This is a white-collar crime. It's a white-collar charge like any other charge.
[00:49:58] Speaker 7: It's it's a good question. Steven Pinri, if you had been appointed director of the Department of Taxation, and if the governor had asked you that, what would you say?
[00:50:09] Speaker 10: My response would have been, you cannot overnight reverse, or impose on the public, a sudden black-and-white change in the enforcement policy. What I would do is probably work out some type of a tax amnesty program right up front. I disagree with Ray on the timing. I think there should have been massive publicity again, Ray going on or me, if I were the tax director, going on public forums and newspapers and so on, and number one, informing people that there even was a criminal law against failure to file. I would be willing to bet that prior to one year ago, the majority of the population in this state did not know that you could be subject to criminal penalties in the in the for the state tax violations. Obviously, everybody knows that you can be subject to criminal penalties uh, if you violate IRS laws.
[00:51:02] Speaker 10: So I think the timing is critical and I think the caller is absolutely right.
[00:51:06] Ray Kamikawa: The problem with that, Randy, is that there will always be people or someone who will claim that they never got notice. And that's why the the laws are are such that you can't claim that kind of ignorance.
[00:51:19] Speaker 7: Mhm. And and when in your article this morning when you talked about tax amnesty, you didn't say it was bad. You used the word "premature." So it's conceivable that in time, and I don't know if we're talking about months or years, but it's conceivable that you would support a tax amnesty program?
[00:51:35] Ray Kamikawa: Yes. I can't say that we would never support a tax amnesty program. More than half the states in the country have adopted tax amnesty programs for one reason or the other. I'm just questioning right now whether an amnesty program would be as productive as we could get it to be.
[00:51:51] Speaker 7: Okay. Well, we're getting down to the last 10 minutes or so, and generally I like to give our guests in the studio an opportunity to raise any issue that that you wanted to raise and just haven't had an opportunity to do so, or to emphasize something that that you've said, but you think it bears repeating. Let's start with you, Steve Pinri.
[00:52:12] Speaker 10: There's two issues here. One is the overriding issue of the public policy of the state of Hawaii and specifically the Department of Taxation in how it's going to enforce its laws. The other more narrow issue is the specifics of a criminal prosecution. The public policy, uh, as I mentioned before, of suddenly cracking down and criminalizing behavior that has been literally sanctioned by the state in previous years is unconscionable. And it's also, I believe, very narrow-sided and ignores the obvious fact that the state of Hawaii government has been mismanaging the fiscal affairs of the state for many, many years, and it isn't going to change overnight. You have to, you meaning the state government, and and Ray is the Department of Taxation is driven by the overall state government policy, you can't and I'm not blaming Ray specifically, he's essentially carrying out orders, but you can't expect people to voluntarily comply and to suddenly change their behavior, uh, specifically to file and pay gross excise tax returns when you've got a state government that has been so anti-business for so many years.
[00:53:34] Speaker 10: The state government does not have policies that encourages, for example, the development of business in this state, uh, the profitability of businesses in this state. It's just the opposite. Every time small businesses turn around, if the state needs money, the state has a captive audience of over 90% of the businesses in the state, it just beats on them for more money.
[00:53:56] Speaker 7: And and you see the tax crackdown as a practical matter being focused on the business community.
[00:54:02] Speaker 10: Yes, I do. I think the state, to put it simply, uh, after the election said, "My gosh, we don't have any money, what are we going to do?" They just looked at the business community and says, "Well, we're going to hit them over the head a few more times and collect some more money.
[00:54:15] Speaker 7: Squeeze that that goose a little more and see if another golden egg comes out. Ray Kamikawa, what do you think about that and then I want to give you an opportunity to to add your own thoughts on other issues.
[00:54:25] Ray Kamikawa: I think it comes down to a fairness issue. Whether it's individuals on their personal income tax liability or businesses on their business income tax liability, we're talking about fairness. The vast majority of individuals and businesses file on time and pay on time. Uh, they call and they wonder, why aren't we administering the tax laws in a manner that would go after people who are not paying their taxes uh, on time, because they compete unfairly with those who do. Uh, businesses subject to the 4% general excise taxes, um, have a cost of doing business, and that's the 4% uh, general excise tax, which non-compliant businesses don't have. So the non-compliant businesses basically have an advantage over those who do pay the taxes. We get calls all the time from businesses uh, on that account. Uh, we know that uh, union representatives, we know that uh, various uh, trade associations are fully supportive of our effort to level the playing field in that manner.
[00:55:28] Speaker 7: Aren't they especially concerned about competition from outside of Hawaii, those folks who provide goods and services in Hawaii but are headquartered elsewhere. Isn't there the sense that the the non-compliance rate among those folks is extremely high?
[00:55:44] Ray Kamikawa: There's a there there is that perception. And I think in fact, we do uh, have a lot of examples of mainland contractors, say, who come to Hawaii, especially those who have contracts with the federal government, who are not compliant with uh, the general excise taxes. And that basically is more uh, along the lines of education. A lot of mainland tax payers don't understand our general excise tax, which again, is not a sales tax, and that's what uh, most people are used to seeing in states.
[00:56:13] Speaker 7: I I a lot of them when I explain to them what all is subject to excise tax in Hawaii, and I basically say if it moves, it's taxed. Uh, they they just don't believe initially. It takes a while to convince them just how how broad based our excise tax system is.
[00:56:29] Ray Kamikawa: And we are trying to work with the federal procurement officers, with our congressional delegation, in cleaning that up. Uh, but we need to do our job a little better too in working with other agencies to educate our mainland contractors and mainland tax payers about the general excise tax and why their income is subject to that tax.
[00:56:48] Speaker 7: How do you go about finding those people?
[00:56:52] Ray Kamikawa: We try to use other people's databases. Uh, we know when contracts are issued out of the federal government for contracts involving out of state contractors, we try to get the cooperation of industry to tell us when that happens. we work with the Internal Revenue Service on their database and share information with them. when we obtain that information, we usually send a packet of information and documents that explain our general excise tax system and hopefully have a good response and when, for the most part, when mainland contractors are informed about our general excise tax, they start complying.
[00:57:36] Speaker 8: Okay. And I know I asked you to respond to what Stephen had said. Are there other issues that you wanted to touch on this morning that we haven't had a chance to get to yet?
[00:57:44] Ray Kamikawa: I think I'd like to emphasize that we, as a department, must exercise all of the rights available to us and the powers available to us to collect the taxes from those who owe us the tax liabilities. What we want to emphasize too, though, on the other hand is that many taxpayers find that when they cooperate with us, when they come to the table, when they try to negotiate a payment plan, when they try to negotiate a deferral of taxes, we are very generous with them. All we want to see is people come to the table. When they start to ignore our letters, when our calls go unheeded, that's when we get tough, and we need to get tough.
[00:58:29] Speaker 8: No more, no more, Mr. Nice Guy. And when you say come to the table, you're not talking about the table that was in the political cartoon in this morning's newspaper.
[00:58:36] Ray Kamikawa: No, it's HB3. It's our conference table, which is much more friendly than that one.
[00:58:40] Speaker 8: Okay. Okay. And if folks haven't seen the the newspaper, we've got an ogre with compliance coordinator on his t-shirt who's, who's got somebody on the rack. Uh, so you were talking about a different table.
[00:58:52] Ray Kamikawa: Definitely.
[00:58:53] Speaker 8: Okay. Uh, Steven Pingree, any response to to Ray's concluding comments?
[00:58:59] Stephen Pingree: I have to say that some of the feedback I've had from some clients and other business people is that the State Department of Collections is not quite so generous as Ray would allude to. They have very specific requirements in terms of the time in which a liability has to be paid, and if it's not paid, they are very quick to file state tax liens. Um, I'll move on past that comment, but I do think there's another side to that story. Um, I want to get back to this fairness issue, and we're talking about criminal prosecutions against individuals. You know, this country, this constitution, protects individual rights and talks about due process for individuals. Ray is talking about a general overall policy of fairness to society and so on, but you have to understand that people who are charged with a crime, it destroys their lives, and you shouldn't do it lightly.
[00:59:53] Stephen Pingree: And our constitution says you can't do it without due process, which means notice and fairness. And I still maintain, despite what Ray says, that the individuals who are selected for prosecution are selected primarily for their visibility and publicity value. And I also happen to know that a couple of those charged with crimes did not receive prior notice soliciting their returns. Um, I can't discuss a specific case at this point, but just let me say there are some real issues about whether or not some people did receive notice that they might be subject to criminal prosecution.
[01:00:28] Speaker 8: So you might say that what what Ray is trying to do, perhaps, is in the best interest of society as a whole if we just look at the interest of society.
[01:00:36] Stephen Pingree: But if you look at the individuals who have been targeted, who are directly involved, they're getting chewed up, and we have a constitution that prohibits that.
[01:00:45] Ray Kamikawa: That's correct. Ray, you've got 30 seconds to respond to that and then I'm going to wrap this. We don't take criminal prosecutions lightly. We don't go into them without a lot of deliberative effort. We make sure that laws are complied with, we make sure that we find cases that are particularly egregious, and that comes down to whether the individuals involved or the businesses involved should have known better.
[01:01:11] Speaker 8: Okay. Well, we've been talking about the tax crackdown in Hawaii. Guests in the studio have been Steven Pingree, an attorney specializing in criminal tax defense and Ray Kamikawa, the director of the Department of Taxation for the State of Hawaii. I want to thank my guests Steven and Ray for coming in this morning and, uh, want to let you all know that the Price of Paradise Radio Show's producer is Susie Roth. Uh, in charge of, uh, technical aspects of this program this morning was Philip Hutchinson. We hope that, uh, you'll listen to us next week when we're going to be talking about car insurance, whether we should have a system that is based solely upon fault to so-called tort approach, or a system that's based totally upon, uh, what we'll call no fault, the non-tort approach.
[01:01:56] Speaker 8: As you know, there are bills in the legislature that are coming from each of those two ends of the spectrum. The system that we have right now has a little bit of tort and a little bit of, uh, no fault mixed in together.
[01:02:05] Speaker 7: no fault mixed in together.
[01:02:07] Speaker 8: Uh, with us next week on that show, we're going to have Janice Kinn, who is an attorney, a member of the Consumer Lawyers of Hawaii, and Carolyn Fujioka, who is with State Farm Insurance. I think you'll find that conversation interesting and stimulating.
[01:02:21] Speaker 7: You've been listening to the Price of Paradise Radio Show. I'm Randy Ruff. Aloha.
[01:02:22] Speaker 8: You've been listening to the Price of Paradise Radio Show. I'm Randy Roth. Aloha.