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IRS hopes $2 million basic bid

IRS hopes $2 million basic bid for '67 Ferrari not too taxing !!


Restored rare car worth as much as $10 million

Bob Golfen
The Arizona Republic
Feb. 21, 2005 12:00 AM

A twisted federal tax case involving Florida land sales comes to roost in Phoenix next month when IRS agents auction off a rare and historic Ferrari 330 P4 factory race car from the 1960s.

Minimum bid: $2 million.

"Oh, it's worth much more than that," said Mike Sheehan, a Southern California resident and longtime Ferrari specialist, who valued the car at something closer to $10 million. advertisement




The sleek red 1967 Ferrari, one of only three in the world, belongs to Florida land developer Walter Medlin, a reclusive multimillionaire whose legendary battles with the Internal Revenue Service stretch back about two decades.

Last year, part of Medlin's treasure trove of Ferraris was revealed when Hurricane Charley hit the Orlando area, blowing down a huge barn on his Kissimmee, Fla., property. The barn's collapse revealed 17 Ferraris and two other valuable cars, most of which were damaged by the falling structure and exposure to the hurricane.

The Ferrari P4, which was not among the cars stored in the barn, is being held at a warehouse in Chandler after being seized in Scottsdale. The race car is in pristine condition and scheduled to go to the highest bidder on March 30 at the IRS office at 210 E. Earll Drive in lieu of nearly $3 million owed the IRS, according to a notice of encumbrance filed in Osceola County, Fla.

The unusual sale is expected to draw wealthy bidders from around the globe. Sheehan said he hopes to be one of them, as does Ferrari restoration expert and historian Harley Cluxton III of Scottsdale, who agreed that the Ferrari's value far exceeds the $2 million reserve.

"Is it worth that? Oh, yeah," Cluxton said.

"Would I pay that? Yes, I would."

The V-12 powered race car was restored about 10 years ago at Grand Touring Cars of Scottsdale, then owned by Cluxton, and has been stored at GTC ever since, he said.

Cluxton, who said he knows Medlin well, described him as a character akin to famed billionaire Howard Hughes.

"He's the original Bohemian," said Cluxton, who now serves as an executive for GTC. "We restored the car for him, and he just left it here."

In August, IRS agents arrived at GTC's warehouse and took possession of the car, Cluxton said.

"This is really the last resort in a collection process," said Fidel Atencio, an IRS appraiser and liquidation specialist. "The key is the lack of cooperation from the taxpayer."

Medlin could cancel the auction of the P4 if he pays his tax bill anytime before 2 p.m. March 30, Atencio said.

Information about the sale is available at www.ustreas.gov/auctions/irs/ .

The Florida businessman, who could not be reached for comment, was well-known among Ferrari enthusiasts for his fairly vast collection of Ferrari race cars and sports cars. He hit the news in 1990 when the Orlando Sentinel reported the IRS seizure of two of his cars, the P4 and a similar 1966 P3, for back taxes.

Bidders were lined up for the October 1990 auction of the two cars, then valued at a combined $20 million, but Medlin arrived at the Orlando IRS office just before the auction was to end and paid his tax debt of $602,000, allowing him to retrieve the cars.

The Ferrari market softened for some years after that, lowering their values. Sheehan, who runs a business buying and selling rare Ferraris, said he bought the P3 from Medlin for an undisclosed amount and sold it last year to a private buyer for about $5 million.

The IRS made a number of seizures of land and other property from Medlin during the 1990s that the agency prepared to auction, but the businessman thwarted the auctions time and again by arriving at the eleventh hour to pay off his debt.

Medlin served five months in federal prison after pleading guilty in November 1997 to misrepresenting his assets, including concealing three of his valuable Ferraris.

Last year, Medlin was in the news again when the hurricane smashed the barn and exposed the 17 Ferraris.

"The beam came across and crushed, oh, I don't know how many cars," Cluxton said. "And of course it rained and rained.

"He called me and said, 'You remember my Formula 2 Ferrari? You could go fishing in it.' "

The P4 was one of four built by Ferrari as factory race cars during the 1967 racing season, replacing the P3s of a year earlier. Originally raced with a curvaceous closed-cockpit body, the P4 came in second at the 24-hour LeMans race and was second of the three P4s that famously swept the Daytona 24-hour race, crossing the finish line together in first, second and third place.

One of the four original cars was destroyed in a fiery crash. One P4 is in a museum in France, and the other belongs to a Canadian collector, who drives it in vintage-racing events.

The P4 up for auction and the one in Canada were rebodied after the 1967 season by Ferrari with fiberglass open-cockpit styles for the Can-Am race series. The auction Ferrari has the second body, though Cluxton said he or any other dedicated collector most likely would send the car back to the Ferrari factory in Italy to have it restored with an accurate aluminum replica of the original LeMans body.

At the Chandler warehouse, the Ferrari sits in the corner under a fabric cover surrounded by classic cars awaiting shipment to people who bought them during January's collector-car auctions in Scottsdale.

Atencio said that, despite the attention created by the Ferrari, for him it's really business as usual.

"It's something this time that has excited people, but it's really the same process," he said. "It's the same whether it's this Ferrari or an '81 pickup truck with 140,000 miles."

http://www.azcentral.com/arizonarepublic/news/articles/0221ferrari21.html
 
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