ICN Chairman, Wife in Back-Taxes Dispute

The Internal Revenue Service claims Milan Panic, the controversial chairman of ICN Pharmaceuticals Inc., and his wife owe nearly $1 million in unpaid federal income taxes and penalties, according to legal documents filed by the couple.

The IRS dispute with Panic and his wife, Sally, came to light a day after the Costa Mesa drug company announced that Milan Panic and ICN are targets of a criminal investigation by a federal grand jury in Los Angeles into Panic’s alleged insider trading of stock and other matters. The IRS Glendale office notified the Panics in February that they owe $951,077 in taxes and penalties for six years, stretching as far back as 1982, according to a petition the couple filed in federal Tax Court in the Washington area. The petition, filed May 3, challenges the IRS claims.

The government also says the couple should have reported more than $3 million in taxable income over several years from two Budget Motels of America they apparently owned in San Diego County. ICN Vice President Mark Taylor, who is Sally Panic’s son and Milan Panic’s stepson, said Panic bought the properties as a tax shelter. As occupancy fell off, the motels encountered financial troubles, which led to Panic’s alleged insider sale of $1.24 million of ICN stock in November 1994, Taylor said. A few months before the sale, Taylor said, Panic was notified that he had to pay a multimillion-dollar legal judgment involving his motel business.

Neither Milan nor Sally Panic could be reached for comment.