Steve Parks, King Coal Venture Await Outcome of IRS Investigation

by George Waldon  on Monday, Oct. 22, 2012 12:00 am  

King Coal LLC, led by Steve Parks, will be setting up shop in new digs at 1616 Brookwood Drive in Little Rock. The move comes after another Parks-led venture, King Coal Holdings, bought the property in May for $850,000 cash.  (Photo by Michael Pirnique)

Steve Parks didn't know the taxman would be making a house call on Oct. 3 at his Little Rock residence. Later that morning his wife called to say that a squad of federal agents was at the front door.

"I can't say it was routine because it wasn't," said Parks, CEO of King Coal LLC. "It was a 100-percent surprise deal. We have been working with everybody. All they had to do was ask us, and we would've produced the documents."

The Internal Revenue Service agents dropped by unannounced with a warrant to seize business records as part of an investigation.

What was it all about?

"Frankly, I'm not sure," Parks said. "They wanted my business records. Anna's office is at the house, and they wanted her records, too."

His wife, Anna Harper, runs Anna's Estate Sales out of the home, four blocks west of the Country Club of Little Rock.

"They just showed up," Parks said. "I don't know what they were looking for. It was King Coal's business records and our personal records in our home. That's about all I know.

"They left me scratching my head, and it was very unnerving for Anna."

What's the timetable for the IRS investigation?

"They say something like this can last eight months, but it could be less," Parks said. "That's what we're hoping for."

Parks and his lawyer in the IRS matter, Gene Sayre, said despite the IRS visit, it's business as usual for King Coal.

"What we can tell you is they're moving forward with their business," said Sayre, a partner in the Little Rock law firm of Hatfield & Sayre. "The IRS has been given all the records that they requested.

"They wanted to look over the records and make a determination of whether there is any violation of the law."

What happens next?

"We just cooperate with them and give them the records and wait to hear from them," Sayre said.

According to IRS protocol, the agency typically doesn't take the unusual step of seizing records unless there is evidence indicating the subject may destroy records, the subject is attempting to obstruct the investigation, other attempts to acquire the records were ineffective or other methods of acquiring the records may compromise the investigation.

Tax Questions

Parks has outstanding personal tax issues with the state dating back several years. It's unclear what connection, if any, these past tax troubles have with the federal inquiry.

The Arkansas Department of Finance & Administration filed a lien against Parks for unpaid 2005 taxes of $171,835 on Oct. 13, 2008. Eight months ago, DF&A filed a lien against him and his wife for unpaid taxes of $109,342 dating from Dec. 31, 2006.

The second lien is against the couple's personal property, their house and any other real estate they own. The first one is linked with any assets Parks owns individually.

According to real estate records, their 6,000-SF home carries no debt. Ownership of the residence, built in 1946 and expanded in 2010, is held in Anna's name.

King Coal Holdings LLC, a Parks-controlled entity, completed two cash purchases of Little Rock real estate this year totaling $1.1 million.

The limited liability company paid $300,000 in July for a 1,450-SF house that adjoins the couple's Country Club Heights home. Neighbors indicate Parks bought the house to further expand his family's residential property.

King Coal Holdings bought a 21,080-SF office building at 1616 Brookwood Drive in the Riverdale area for $850,000 in May. The property will become the new home for King Coal LLC.

"We've broken ground," Parks said. "We're giving the building a facelift to make that place special. It's where we're going to put our lab."

According to company information, Parks established King Coal in 2007 to mine and produce refined coal from surface and deep mines in Arkansas, as well as pursue other coal-related ventures.

Wayne Van Buren, geology supervisor with the surface mining and reclamation division of the Arkansas Department of Environmental Quality, said King Coal has set up a mining office near the Excelsior community in Sebastian County.

"I'm familiar with them, but they haven't done anything," he said. "They've indicated they have an interest in mining, but they don't have any coal mining permits or anything."

The state tax problems for Parks date back to his unsuccessful efforts to pull off a $3.5 million stage production of the "Designing Women" sitcom and to launch a treasure hunt reality show/documentary about the recovery of a sunken fortune of Spanish booty off the coast of Panama.

Also during that time, the Arkansas State Bank Department started action that resulted in the 2007 closing of Arkansas Valley Regional Industrial Development Co.

The venture was led by Carl Bird, who is now chief engineer at King Coal. AVRID issued tax credits to help several Parks-led ventures raise capital.

Those included Sea Heritage Partners LLC, Sea Heritage Capital LLC, Natural Gas Solutions Partners LLC and Natural Gas Solutions Capital LLC. 

The action to close AVRID followed Bird's failure to produce financial documents to substantiate asset claims tied to several businesses. Included in the list were  Parks-led ventures such as:

  • Sea Heritage, with a $150 million valuation based on a purported salvage contract with the Republic of Panama that appears to have been suspended by the Panamanian government.
  • Winstarr LLC, with a $44.6 million valuation based on projected cash flow from a network of automated teller machines apparently not yet owned.

Parks and Bird disputed the bank department's findings, but AVRID surrendered its certificate of incorporation and agreed to cease and desist from operating and doing business as an industrial development company as part of a settlement agreement.

 

 

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