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Rogers’ IRS Bill Cut to $10.3 Million but Yacht Seizure Upheld

Times Staff Writer

Winning a partial victory, county businessman Kent B. Rogers convinced a federal judge that his back-tax bill for 1983 should be reduced to $10.3 million from $25 million.

But Rogers, a real estate developer, failed to convince U.S. District Judge Dickran Tevrizian that IRS seizure of his 63-foot yacht Sundance was unreasonable, leaving tax collectors in possession of what they believe is Rogers’ last remaining major asset.

The IRS alleged that Rogers, convicted once of bankruptcy fraud in 1982, has shown a pattern of hiding assets from creditors.

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In the court hearing Monday in Los Angeles, lawyers revealed that the IRS has also notified West Pac Corp., of which Rogers is president, that it has 90 days either to pay a separate $25-million back tax assessment or to fight it in court.

IRS agents have accused Rogers of using West Pac as his personal banking account. The agents said he accepted weekly cash payments from the firm he headed and allowed West Pac to pay his personal credit card bills and medical bills for his mother.

After Monday’s court session, Rogers said he is considering filing another personal bankruptcy in a bid to force the IRS to reveal more about its case. His 1978 bankruptcy is still open, but Rogers said he hopes to end up with $1 million in assets when the case concludes.

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Tevrizian found the IRS seizure of the yacht to be reasonable, in part because of Rogers’ “precarious financial status and propensities.”

The IRS said most of the 1983 tax bill was based on money the agency has accused Rogers of embezzling from Bank of America in a $95-million property fraud in 1984.

About $18 million in loans went from the bank to West Pac, according to the IRS.

Rogers, 49, has not been charged with any crime in the Bank of America swindle, in which several others, including property appraisers, have been convicted. Rogers has denied any wrongdoing in the case. The IRS allegations marked the first time a federal agency has formally alleged that Rogers was involved in the 1984 swindle.

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Rogers’ attorneys said in court Monday that the IRS figured his 1983 taxes based almost exclusively on income. His attorneys said Rogers had loaned millions of dollars to other businesses so that money should not be counted as taxable income.

The separate tax case against West Pac, which the government alleged was Rogers’ alter ego, will not be affected by Tevrizian’s decision, according to Assistant U.S. Atty. Charles H. Magnuson.

Rogers lives in Huntington Harbour.

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