Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, June 13, 1995                   TAG: 9506130054
SECTION: VIRGINIA                    PAGE: C-3   EDITION: METRO 
SOURCE: JAN VERTEFEUILLE STAFF WRITER
DATELINE:                                 LENGTH: Medium

JUDGE BACKS SELBE ON IRS CLAIM

A federal judge on Friday ordered that the IRS give up a claim on the proceeds from the 1991 sale of Selbe's Southwest Roanoke home.

After the sale, Selbe assigned his share of a $350,000 note from the buyers to his wife, Vicki, in accordance with their prenuptial agreement.

The government discovered that Frank Selbe didn't report the transaction to a probation officer working on a financial statement for the court. The statement was part of a pre-sentence report to the judge after Selbe was convicted of tax evasion in 1992. He served three months in prison on those charges.

Selbe, a former Vinton town attorney, argued that he didn't conceal anything because the note never belonged to him: he had given up at least half the proceeds from the sale of the house when he signed the prenuptial agreement in 1985.

U.S. District Judge Jackson Kiser agreed. He ruled that the proceeds were not his but hers, so Selbe did not conceal anything from the government by not reporting the transaction.

Assistant U.S. Attorney Rich Lloret said the Justice Department's Tax Division will decide whether to appeal Kiser's ruling.

A jury found Selbe guilty in 1992 of a criminal charge stemming from the incident. He was convicted of making a false statement about his net worth to a probation officer, but Kiser overturned the conviction and the 4th U.S. Circuit Court of Appeals upheld his decision.

At the same time Selbe was arrested on the charge of making a false statement, the Internal Revenue Service filed a claim against the note to collect two years' worth of unpaid income taxes. The government believed Selbe was trying to put his assets beyond its reach by selling his house and assigning the proceeds to his wife.

Although Kiser's ruling stops the IRS from taking the proceeds from the sale of the house, it doesn't keep the government from trying to collect back taxes from Selbe in other ways.

The proceeds from the $350,000 note are being held by the court, Lloret said. Kiser ordered the government to release liens on the note. If the government does challenge Kiser's decision, it will be up to Kiser whether to release the money to Vicki Selbe pending the appeal.