IRS Briefly Seizes Adams Mortuary for Back-Tax Debt

For 3 1/2 hours last Wednesday, auditors with the Internal Revenue Service seized and padlocked the funeral home businness of City Councilman Robert L. Adams over his failure to pay $25,427 in payroll taxes, some delinquent since 1985.

By Thursday, however, Adams had borrowed money to satisfy the debt and his Adams Funeral Home Inc., at 501 E. Palmer St., was allowed to reopen.

“We are releasing the lien,” IRS spokeswoman Lowell Langers confirmed Thursday.

Acknowledged Debt

Adams, a 10-year council member who has operated the Compton-based funeral business since 1974, acknowledged in an interview that “I knew I owed the money.”

“I was buying time,” Adams said, “because, you know, I try to help so many people in the community,” by keeping “some people’s houses out of foreclosure,” helping the church and contributing to other local causes.

“But we run our business legitimately and we comply with the federal, state, county and city requirements,” Adams said. The IRS debt included a penalty, but the councilman stressed that it was for non-payment, not “tax evasion.”

The temporary closing required the Los Angeles County coroner’s office to pick up four bodies that had been awaiting funeral services at the time and hold them overnight, spokesman Bill Gold said. Auditors also gave notice of the seizure to the Los Angeles regional office of the state Board of Funeral Directors and Embalmers, which licenses mortuaries, according to Executive Officer James B. Allen.

Adams said the bodies were eventually returned to the funeral home without any problems.

“Just one service didn’t go off,” the councilman said. “We had a graveside service this morning (Thursday) and we postponed it until Friday.”

Auditors Armed With Locks

Adams said three IRS auditors appeared on the doorstep of his business at 8 a.m. Wednesday, armed with a civil court writ of entry, door locks and a sign announcing that the funeral home had been seized. (The firm’s Pomona branch was not affected by the IRS action, he said.)

While the field auditors were polite, Adams said, he accused their agency of staging “a sneak attack” that was unnecessary. He said one of the auditors told him that the raid had been ordered by a supervisor.

“I think (the supervisor) should’ve given me sufficient notice because I made a payment the day before they made the action,” Adams said. “But don’t get me wrong, I owed the money.”

IRS spokeswoman Langers said the auditors only seized the business after Adams had failed to respond to a lengthy process of legal notice that included the public filing of tax liens with the county recorder.

The funeral home had failed to pay withholding and Social Security taxes on behalf of its employees during two fiscal quarters in 1985 and three quarters in 1986, Langers said. Federal unemployment taxes also went unpaid during the 1986 periods, she said. The business employs about 15 people.

‘Last-Resort’ Measure

A business seizure “is a last-resort effort on our part,” Langers said. “On these, we’re really tough because it’s employees’ money.”

As the auditors conducted an inventory of property inside the funeral home, the councilman said, he went to Enterprise Savings and Loan in Compton and obtained a loan to pay the tax debt. The auditors then left about 11:30, he said.

Had the debt not been satisfied, the auditors would have appraised the business’s assests and sold them at public auction to recover the taxes.

The 55-year-old Adams chairs a city employment and labor task force and often uses his council position to speak on the difficulties faced by small businesses such as his. But his reaction to the IRS action was calm in the end.

“In business,” he said, “I think I’ve experienced a little bit of everything.”