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IRS Slaps Liens on Success Guru

September 23, 1987|CHRIS KRAUL | San Diego County Business Editor

SAN DIEGO — Robert G. Allen, author of the best-selling "Nothing Down" book on how to become wealthy buying real estate with no cash down, and of two other books that chart courses to financial success, has been charged more than $412,000 in back taxes and penalties by the Internal Revenue Service, according to two tax liens on file in San Diego County.

The first IRS lien of $346,395 was filed in August, 1986, against Allen and his wife Daryl claiming that the Allens paid insufficient tax on their Form 1040 income for the tax year ended December, 1984, spokeswoman Sarah Wrefort at the IRS' Laguna Niguel district office said Tuesday.

The second lien for $66,353, filed in the San Diego County recorder's office in May, 1987, claimed that a corporation of which Allen was a principal failed to make adequate Social Security and withholding tax payments for the tax quarter ended June 30, 1986. The lien amount includes a 100% IRS penalty.

Allen's book, "Nothing Down," has sold 1 million hardback and paperback copies since its 1980 publication, the largest selling real estate investment book ever, Allen's publisher Simon & Schuster said in New York on Tuesday. The book purports to instruct readers how they can become wealthy by buying investment real estate property with no cash down.

A spokeswoman for the publisher said Allen's other books, "Creating Wealth," published in 1983, and "The Challenge," published in 1986, have both "done very well."

Allen, 39, admitted to having financial difficulties in an interview Tuesday but said he had no plans to file for protection under the federal bankruptcy code. Without specifying how much, Allen said he has paid part of what he owes to the IRS. "The liens will be paid off in the very near future," he said.

Allen's IRS liens will be detailed in an issue of Danville, Calif.-based Real Estate Investors Monthly to be published later this week, said publisher-editor John T. Reed. On several occasions, Allen and Reed have squared off in debates in which Reed said he has criticized Allen's no-money-down investment techniques.

The IRS liens, which constitute a claim on all of Allen's recorded assets, have also been filed in Provo, Utah, Allen's former residence.

Allen currently conducts seminars, that cost as much as $1,495 per person, based on the financial success tools discussed in "The Challenge." In the book, Allen claims to have picked three people off unemployment lines in St. Louis and taught them enough financial savvy during two days that they were able to put $5,000 cash in their pockets within 90 days.

Times staff writer Jim Bates also contributed to this story.

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