IRS Tangles with Gypsies in Tax Dispute

Last summer the IRS seized $2.7 million from Bobbie Ephrem, a Portland, Oregon gypsy leader, after being tipped off by an informant that Ephrem might be hoarding money that had not been reported to the IRS. In October, Ephrem filed suit against the IRS stating that the IRS failed to take into account deductions that should have been applied against the portion of the income that represented proceeds from his business. He also indicated that the bulk of the money seized did not represent taxable income at all. Ephrem operates a used-car business, Bobby’s Auto Sales.

Last week, a federal judge abated the jeopardy assessment that had been issued by the IRS and indicated that the IRS might be required to give back the money, claiming that the federal agency had not sufficiently proved that the money actually belonged to Ephrem or that it represented taxable income.

Ephrem’s attorney, Marc Blackman, stated in court that Ephrem is the patriarch of a gypsy organization known as Roma, and one of the responsibilities associated with that position is to hold money for family members and other members of the gypsy group. Ephrem’s brother testified that much of the $2.7 million seized represented an inheritance from Ephrem’s sister-in-law that was being held for safekeeping.

Gypsies traditionally eschew banks and bankcards and prefer to deal in cash. In addition to nearly $400,000 found in cash in Ephrem’s home, the IRS seized several safe deposit box keys at his home, and subsequently found and seized approximately $2.3 million in cash that was in the boxes.

The IRS relied on tips from an informant who might have worked for Bobby’s Auto Sales at one time. The informant, who has been charged in the past with murder, assault, burglary, narcotics, and illegal gambling, told IRS agents that he had knowledge of Ephrem concealing large sums of money and failing to report income on tax returns. He also told the IRS that Ephrem used his son’s Social Security number on some occasions.

The judge ordered Ephrem’s attorney to draft a judgment in the case. The U.S. Department of Justice is considering its options.

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