Advertisement - Click to support our sponsors.

Friday, April 14, 2000

Oahu tax
preparer indicted
on fraud charges

He allegedly told clients
to declare Hawaii income as
earned in a foreign country

By Tim Ruel


An Oahu tax preparer who pleaded no contest earlier this year to charges of not filing his own state general excise taxes has been indicted for allegedly telling clients to declare income earned in Hawaii as earned in a foreign country.

Richard James Basuel, 58, also allegedly inflated deductions on the income tax returns he prepared for customers, the state said yesterday.

Both charges constitute fraud, according to the indictment. Basuel is also accused of theft and tax evasion because tax fraud costs the state money, said Stephen Hironaka, state supervising criminal tax investigator.

Hironaka said a taxpayer who makes $85,000 a year and declares it as foreign income would only have to pay taxes on $13,000 instead of the full amount, which means less money for state coffers.

Basuel runs RB Tax Service with his son Richard James Basuel II, 29. Both pleaded no contest in February for failing to file state general excise tax returns for 1995, 1996 and 1997. The men face sentencing on those charges April 28, with a maximum penalty of one year in prison and a $75,000 fine.

The latest accusations against the elder Basuel stem from a continuing investigation by the state Department of Taxation.

On Tuesday, a grand jury indicted the elder Basuel on six counts of false and fraudulent statements, two counts of theft in the second degree, four counts of attempted theft in the second degree and one count of attempted tax evasion, according to the state.

Basuel's son was not part of this indictment.

The maximum penalty for fraud is three years in prison and $100,000 per count. For theft in the second degree, it's five years in prison and $10,000 per count. Tax evasion is five years and $100,000.

The senior Basuel and his attorney did not return requests for comment yesterday or today.

RB Tax Service, with offices on North King Street in Kalihi and Farrington Highway in Waipahu, is among the state's largest tax preparation companies. In 1998, the company filed 4,775 returns from its Kalihi office, including 200 for businesses and 4,575 for individuals, according to Pacific Business News' "Book of Lists 2000."

Hironaka said residents of Hawaii who do not work in a foreign country do not qualify for foreign-earned income exclusion.

He urged residents to find out if their income was ever illegally declared as foreign-earned. If so, they may face an adjustment in their tax return

Hironaka did not know how many RB customers would be affected, but added, "we just know it's a lot." He noted most would be individuals, not businesses.

The state plans to go into its records to find out how many filings were involved, and for how many years, he said. RB clients who are concerned about their returns should call the Office Audit Branch at 587-1660.

E-mail to Business Editor

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]

© 2000 Honolulu Star-Bulletin