State tax officials cleared to carry guns

By Sean Hao
Advertiser Staff Writer

State tax officials may be packing more than a briefcase the next time they come knocking.

Under a little-publicized law passed last year the state Department of Taxation is now authorized to equip its investigators with firearms. The agents, charged with investigating tax crimes, also have other police powers, including the right to detain and arrest people.

The department lobbied for the law and said such powers are needed in cases where criminal acts are suspected.

In addition to allowing the department to pursue more potentially dangerous cases, the new police powers will make it easier to recruit tax investigators, who often are former law enforcement agents, said tax director Kurt Kawafuchi.

"I want to make sure my people are well-trained and equipped," Kawafuchi said. "At the same time, I don't want them to be at a serious disadvantage."

The department has employed only one criminal tax investigator for at least two years, even though three positions are authorized.

Arming tax officials and giving them the power to arrest people is unnecessary, said Honolulu criminal defense attorney Earle Partington.

"I can't imagine why they would need" police powers, he said. "A lot of investigative agencies don't need these powers."

Partington said he saw no reason to subvert the typical investigative process, which starts with gathering evidence of a crime and forwarding it to the state attorney general's office, which can then go before a grand jury to get an indictment. At that point, the police can arrest a suspected tax cheat.

Arming tax officials would only put undue pressure on those accused of tax crimes, he said.

"It increases the ability of the state to harass taxpayers," Partington said. "I'm concerned about that."

The Tax Department isn't the only state agency with authority to arm its investigators. The state Bureau of Land and Natural Resources, Department of Human Services and others have the ability to grant certain employees police powers.

In the case of the Tax Department, the confidential nature of tax returns makes it difficult to involve outside agencies when pursuing an investigation, Kawafuchi said.

He added that tax investigators with police powers will be trained to handle firearms and engage in high-speed. They also will be trained not to violate civil rights.

The department's current investigator is a former Internal Revenue Service special agent, and Kawafuchi said he's considering hiring another. Both have prior law enforcement training, he said.

"That gives me a lot of confidence," Kawafuchi said.

Anyone hired without such experience will be sent to the Mainland for federal training, he said.

The department has faced criticism for cutting back on tax audits as it shifts staff to customer service initiatives and to train on a new computer system.

Kawafuchi said it was tough to find people under old regulations, which required investigators to have more audit experience. The two empty positions are financed, however, and the department intends to fill them.

The positions, which pay between $35,000 and $60,000 a year, typically bring in about $2 million in added tax collections, so filling those positions should help increase state revenues, Kawafuchi said.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com .