IRS Will Sell Property of Alamo Group in Arkansas : Taxes: Agency will try to satisfy a $7.9-million debt. A court has ruled that church was not tax-exempt.

The Internal Revenue Service said Friday it will begin auctioning hundreds of items, from real estate to keepsake photos, seized from evangelist Tony Alamo and his followers.

That will capitalize on a federal court’s ruling that the former fugitive’s church was a money-making operation that does not merit tax-exempt status, IRS officials said.

The IRS--to satisfy a $7.9-million tax debt--has scheduled the first auction for March 31 in Clarksville, Ark., said IRS spokesman Dan Boone.

More than 400 items seized from stores, offices and residences operated by Alamo and his followers in Arkansas will be sold, Boone said. Auctions of real estate and other property in Tennessee and California will probably follow, Boone said.

The items to be sold in Arkansas range from church furniture to odds and ends. A four-page IRS inventory includes a church pulpit, altar and 82 pews, 28 mirrors, several photos of Alamo, including two with actor Larry Hagman, and a piece of driftwood.

There is also a souvenir dish inscribed, “Remember the Alamo” and a director’s chair bearing the name of Alamo, who pronounces it ah-LAH-mo.

Alamo, who is awaiting trial in San Fernando Superior Court on child abuse charges, could not be found for comment. He is believed to be living in California, but calls to church telephone numbers in Los Angeles and Ft. Smith, Ark., were not returned.

Boone said the proceeds will go toward paying tax liens filed against the church, known as the Tony and Susan Alamo Foundation. Susan Alamo died in 1982. The IRS stripped the church, founded by the couple in Hollywood nearly 25 years ago, of its tax-exempt status in 1985.

Alamo appealed the IRS ruling but on Wednesday a two-judge U. S. Tax Court in Los Angeles rejected the appeal.

The ruling declared that “in the final analysis, Tony and Susan were the foundation, hopelessly intertwined with no separate identity, orchestrating a huge business organization . . . for their personal benefit.”

The ruling said the Alamos’ purpose “was to provide sustenance to its members and economic wealth to Tony and Susan.”

Instead of being a “communal group only tangentially engaged in unrelated trades or businesses,” the ruling concluded, the Alamo church “was akin to a city of full-time workers, who also happened to pray together.”

Boone said the tax court ruling was coincidental to the auction, which had already been planned by the IRS. However, he said, the ruling strengthens IRS contentions that the many businesses Alamo followers have operated--from restaurants to clothing factories and sales outlets--are all part of his church organization and subject to seizure to pay tax liens.

The tax court’s ruling shows that “all of these entities are interconnected,” Boone said. “This bolsters our position on the collection side.”

Property owned by the church and formerly used as a commune in remote Mint Canyon in Saugus has been seized by the IRS along with a lucrative clothing store in Nashville, Tenn., Boone said. Alamo-designed denim jackets--with lavish, sequined illustrations on the backs--sold in the 1980s for as much as $600 each.