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Starline/Gray Line Tour Buses Are Seized by the IRS : Tourism: An agency spokesman says the company failed to turn over $733,191 owed to the government.

October 14, 1994|JAMES F. PELTZ | TIMES STAFF WRITER

Starline/Gray Line Tours in Los Angeles, which provides tours of movie stars' homes and other Southern California attractions, ceased operations Thursday after many of its buses were seized by the Internal Revenue Service, a company spokesman said.

"We have suspended all tour and charter operations at this point," said Neal Saltzer, a tour representative for the company. "We are not taking reservations."

By late Thursday, telephone calls to the firm's Hollywood office were answered by a recording that asked anyone who wanted future reservations to leave a message.

The IRS padlocked Starline/Gray Line's depot in South-Central Los Angeles, where many of the firm's 200 buses are parked, at 4:30 a.m. Wednesday, Saltzer said. He said the exact number of buses seized was unclear, because some of the firm's vehicles were still on long-distance trips and not in the depot.

IRS spokesman Keith Kimball in Los Angeles confirmed the seizure, saying it occurred because of Starline/Gray Line's failure to turn over $733,191 owed to the government.

The sum covered funds withheld from employees' paychecks for federal income taxes and Social Security, along with the firm's matching Social Security payments, for the period April, 1993, through March, 1994, Kimball said.

The tour operator employs about 300 people, Saltzer said, adding that there have not yet been any layoffs.

Asked about the IRS' claim, Saltzer said the issue of tax liability "is pretty much acknowledged by everyone within the corporation" and that the firm is scheduled to meet with the IRS on Tuesday.

Gray Line, a venerable name in the sightseeing business nationwide, is also perhaps the best-known among dozens of lines in Southern California that offer tourists an up-close look at greater Los Angeles and its attractions, as well as providing charter transportation for groups traveling to Disneyland, Universal Studios and other amusement parks.

Starline/Gray Line also provided long-distance tours to such areas as San Francisco and Yosemite National Park, Saltzer said.

In addition to its tax troubles, Starline/Gray Line is not supposed to even be using the Gray Line name, according to Gray Line Worldwide in Dallas, the association that licenses the trademark to privately owned tour operators and provides general sales and marketing assistance for the Gray Line system.

"We ordered them to cease using the name about a month ago because they were in violation of the association's bylaws," said Jack Haugsland, president of Gray Line Worldwide. He declined to describe the alleged violations.

Starline/Gray Line is believed to be owned by Vahid Sapir, among others, though neither Saltzer nor the IRS would identify the owners. However, Starline/Gray Line was created in 1989 when Starline Sightseeing Tours, then owned by Sapir and his brother, acquired the Gray Line operations in Los Angeles and Orange counties.

Sapir and his brother, Fred, started their transportation company in the late 1960s when they bought a fleet of limousines to chauffeur guests of Sid Grauman, builder of what is now Mann's Chinese Theater on Hollywood Boulevard. Neither of the Sapirs could be reached for comment.

The Gray Line system began in 1918 as a single tour bus in Washington, which provided customers with a two-hour tour of the nation's capital for 10 cents. By the mid-1970s, more than 10,000 buses carrying the Gray Line logo were providing tours across North America.

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