TAX AND TRUST FUND ISSUES

By

Richard M. Colombik, J.D., C.P.A.

&

Linda Godfrey, J.D., C.P.A.

INTRODUCTION

IRC §6672 reads as follows:

Any person required to collect, personally account for, and pay over any taxes owed by this title who willfully fails to collect such tax, or personally account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax on the penalty thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under Section 6653 for any offense to which this section is applicable.”

Employees are allowed a credit against their tax liability for the taxes that are withheld from their wages. This credit is allowed even if the employer does not remit the withheld funds to the government. Section 6672 was enacted by Congress so the government would not bear the entire risk of loss when the employer failed to remit the trust fund taxes. This section subjects all person considered responsible for the withholding and payment of the trust fund taxes to a penalty equal to the amount of the taxes the employer fails to remit. This in referred to as the “100% penalty.”

This section only applies to third party taxes that are imposed on the person other than the one required to collect and remit such taxes. The employees withholding of federal income tax, social security taxes, and Medicare taxes are subject to §6672.

35 ILCS §5/1002) (from Ch. 120, par. 10 1002)¹

    Sec. 1002. Failure to Pay Tax.

 (d) Willful failure to collect and pay over tax. Any person required to collect, truthfully account for, and pay over the tax imposed by this Act who willfully fails to collect such tax or truthfully account for and pay over such tax or willfully attempts in any manner to evade or defeat the tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for the penalty imposed by Section 3 7 of the Uniform Penalty and Interest Act.

Note, in Department of Revenue v. Heartland Investments², the Illinois Supreme Court stated that IRC §6672 and the predecessor to 35 ILCS §1002(d), were similar in nature and intent, such that IRC §6672 cases can provide guidance for deciding Illinois cases within this section. Therefore, we will only address federal cases, as they are also applicable to Illinois Department of Revenue cases.

REQUIREMENTS FOR LIABILITY

There are two major tests that are questions of fact to determine if someone is subject to the provisions of IRC §6672 and with 35 ILCS §5/1002

1. Whether the person had a “responsibility” to collect, account for, and pay trust fund taxes, and

2. Whether the person “willfully” failed to perform this duty.

The Internal Revenue Service has the right to pursue any person who meets the provisions of these tests. The person does not have to be an officer or an employee of the corporation that originally collected the taxes.

RESPONSIBLE PERSON

A “person” is defined as anyone with a duty to perform according to IRC §6671. This definition of person includes “an officer or employee of the corporation or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.” Any person can be deemed to be a responsible person if he in fact acts in such a way or has the requisite authority and control so as to make him considered responsible for collecting, accounting for, and paying over federal withholding taxes.³ The person may include shareholders, directors, and officers of the corporation. It may also include persons outside the formal structure of the corporation such as creditors, lenders, sureties, attorneys, and accountants. Liability will attach if the person meets the conditions of being a “responsible” person and if his conduct was “willful.”

The term “responsible person” includes anyone who is connected or associated with the corporate employer in a manner that he has the power to see that the taxes are paid or the power to make final decisions concerning the corporation, or determines which creditors are paid and when.⁴ Attorneys, accountants, and financial institutions have been held to be responsible persons.

Ultimate Control

Generally the test for responsible person status is functional and focuses on whether the individual exercises ultimate control over the financial affairs of the business. The test specifically looks at the control over the disbursement of funds and the priority of payments to creditors. Significant control will establish responsibility.

Person’s Authority

A key element to determining a person’s authority is whether that person has the statutorily imposed duty to make the trust fund tax payments. The person may be deemed a responsible person is he exercises or is under a duty to use his authority over financial affairs or general management.

The person’s authority to pay the trust fund taxes must be based only on the tax periods at issue.

RESPONSIBILITY

Trust Fund Recovery Penalty should apply only to the person or persons who have ultimate control over company finances. The key is control of finances within the corporation and the power to control the decision making process that allocates funds to other creditors in preference to its withholding tax obligations.

The duties listed in §6672(a) of collecting, accounting for and paying over the trust fund taxes are considered to be the duties of a responsible person. A person may be considered a “responsible person” and not have performed the functions of collecting and paying the trust fund taxes.

Many factors are involved in determining whether a person is responsible under §6672. Some of the factors that are examined are the corporate by-laws, stock ownership, holder of a corporate office, corporate director, the authority to sign checks, the day-to-day management, the hiring and firing of employees, and the authority to sign and file payroll tax returns.

Corporate By-Laws

U.S. v. Strebler⁵ held that the president and chief executive officer was a responsible person because the corporate by-laws established that his duties included supervision over the general policy, affairs and finances of the corporation. Muck v. U.S.⁶ also referred to the corporate by-laws that authorized the taxpayer to manage the business and affairs of the company. The provision in the by-laws giving the person authority over corporate financial affairs will not support a finding of responsible person status if the evidence establishes that person does not have actual control over the corporate finances.

Stock Ownership

The courts have recognized that stock ownership may create a responsible person status.⁷ The stock ownership will create a responsible person status if the shareholder controls corporate business affairs and makes the decisions regarding what creditors will be paid and the priority of those payments. The shareholder is not required to have any official status with the company or to have any control over the day-to-day operations.⁸

The ownership of stock in a parent corporation is a considered factor for establishing responsible person status in respect to a subsidiary corporation. In Tiffany v. U.S.⁹ it was held the controlling shareholder of a holding company was found to be a responsible person with respect to the subsidiary corporation’s failure to pay the trust fund taxes.

The controlling shareholder may be able to avoid responsible person status if he is able to demonstrate a lack of knowledge of the trust fund tax delinquency. With knowledge, the controlling shareholder may have the power to take steps to ensure that the trust fund tax payments are made. This power may include replacing directors and officers. If the controlling shareholder has knowledge of the tax deficiency, he should instruct the directors and officers to make the trust fund payments and provide reports on the status. Responsible person status may be imposed if there is knowledge and unexercised authority.

Holder of Corporate Office

Generally, the holder of a high corporate office is considered to be a responsible person. The exception to this is a corporate officer that does not have sufficient authority over the corporate financial affairs or where his corporate title does not reflect his true authority or function.

Corporate Director.

Mere membership on a board of directors is insufficient to establish responsible person status. Responsible person status may be created if the board of directors possess control over the payment of the corporations financial obligations

Authority to Sign Checks.

The authority to sign checks is a significant factor in determining responsible person status. Generally check-signing authority comes with the option to choose which creditors will be paid.¹⁰ Check-signing authority will not create responsibility when a superior makes the actual decision on which checks to issue.¹¹ A person with unlimited check-signing authority is found to be a responsible person even though his superior directs him not to pay the trust fund taxes or risk termination.

An individual may be determined a responsible person when other factors denoting responsible person status exist even though he has no check-signing authority.¹²

Day-to-Day Management.

Day to day management of a corporation is not a prerequisite to responsible person status. As long as the person is the ultimate decision maker or had the effective power to pay the trust fund taxes, he will attain the responsible person status. It is possible not to be a responsible person even though day-to-day management is exercised if the person lacks authority to direct which creditors are paid.

Hiring and Firing Employees.

The hiring and firing of employees is a supporting factor indicating a person’s control over the business affairs of the corporation. The authority to hire and fire employees will not create responsible person status in and of itself.

Authority to Sign and File Tax Returns.

The signing and filing of payroll tax returns is an indicator of responsibility. An individual will not be considered a responsible person if that individual has no actual or supervisory role with respect to the record keeping, completion of payroll tax returns and the lack of independent authority over the corporation’s financial affairs.

Unexercised Authority

Monday v. U.S.,¹³ held that corporate office does not, per se, impose a duty to collect and pay over withheld taxes. There are many factors indicating the person is a responsible person, but the key element is whether that person has the statutory imposed duty to make tax payments. We look at the substance of that person’s authority over financial affairs or general management or is under a duty to do so before he is determined to be a responsible person.

A number of cases hold individuals with unexercised authority to control corporate payments and finances as responsible persons. Cassidento v. U.S.¹⁴ held that the 50% shareholder, director and officer is classed as a responsible person even though he did not participate in or supervise the payment of the corporations bill payment since he had the authority to control the disbursements if he desired to exercise such authority. A person possessing unexercised authority that becomes aware of trust fund tax deficiencies may cause him to attain responsible person status.

Disjunctive Reading of §6672.

The Supreme Court ruled the three duties of collect, account for, and pay over in §6672 should be read disjunctively so a person is responsible if he has a duty to perform any one of these three functions not all three.¹⁵

Multiple Responsible Persons.

More than one individual may be a responsible person regarding the same entity. Each of these persons are jointly and severally liable for the penalty. There is never a situation where there is no responsible person. The government may collect from any or all of the responsible persons.

Volunteers of Charitable Organizations.

Unpaid voluntary board members of tax-exempt organizations have additional protection from the assertion of a penalty. A penalty will not be asserted if the board member is serving solely in an honorary capacity and does not participate in day-to-day or financial operations and does not have actual knowledge of the failure to pay the penalty.

Sole Proprietors.

A sole proprietor is not a legal entity separate from its owner. Therefore sole proprietors are personally responsible for all business debts including withholding taxes without regard to §6672. If an individual other that the sole proprietor is found to be a responsible person, the IRS will use §6672 to collect the unpaid trust fund taxes.

Partners

Section 6672 may be asserted against the partners considered responsible persons.

Bookkeepers

A person acting as a bookkeeper with no independent authority regarding the payment of creditors or disbursement of funds is not a responsible person. This is true even if the bookkeeper signs checks, prepares payroll, prepares the payroll tax returns and is very knowledgeable about the operation of the business.

Liability of Those Outside Formal Structure of Business.

Third party creditors have been found to be liable for Trust Fund Recovery Penalty. This occurs when the creditor has assumed and exercised control over the disbursements of the taxpayer.¹⁶

Effect of Family Relationships.

Family relationship status has been taken into account in a number of court cases. The court held in Barrett v. U.S.¹⁷ the wife was not a responsible person and did not act willfully since she was dominated by her husband and could not write any company checks without her husband’s specific authorization. Another holding was in Williams v. U.S.¹⁸ where the son had all the officer titles of the company except the designation of president. He also prepared and signed the payroll tax returns. His father, the president of the company, allowed him to sign a few checks and contracts. The court found the son did not have any independent authority and therefore was not a responsible person.

Knowledge of Trust Fund Liability

Knowledge that trust fund taxes are not paid does not by itself cause responsibility. Responsibility is status, duty, and authority. But, the lack of knowledge that trust fund taxes are not being paid does not exclude a finding of responsibility.

WILLFULNESS

The trust fund recovery penalty applies to a “responsible person” who has “willfully” failed to account for, collect, and remit payroll taxes. Once a person obtains the status as a “responsible person”, he bears the burden to disprove his “willfulness.”

The responsible person is considered to act willfully is he makes a deliberate choice to pay other creditors instead of paying the payroll taxes. He also acts willfully if he has knowledge of the trust fund tax delinquency and allows payments to be made to other creditors. The final element of willfulness is the responsible person acts with reckless disregard of the known or obvious risk that the trust fund taxes will not be remitted. This includes failing to investigate or correct mismanagement after obtaining knowledge the trust fund taxes have not been paid.

Definition of Willfulness

“Willfully” is defined as “meaning, in general a voluntary, conscious, and intentional act.”¹⁹ The willful element is satisfied when the responsible person deliberately choose the pay the money from withheld taxes to other creditors instead of the government. The willfulness element exists if the responsible person acts with reckless disregard. Reckless disregard is the failure to investigate and correct mismanagement after obtaining knowledge the trust fund taxes are unpaid.

The consideration of willfulness begins with a responsible person’s actions from the time the employee’s net wages are paid and taxes withheld.

Financial Difficulties of Corporation

The financial difficulties of a company do not negate the willfulness element. A responsible person acts willfully when he permits other creditors to be paid ahead of the government with knowledge the trust fund taxes are unpaid.

Inadequate Funds to Pay Gross Wages

The correct course of action when there are limited funds available is to prorate those funds between the government and the employees.²⁰ Insufficient funds to pay the net wages of the employee do not negate the willfulness element.²¹

Failure to Pay Over Pursuant to Superior’s Order

A responsible person who does not remit the trust fund taxes due to a direct order from a superior is willful. The responsible person will have satisfied the element of willfulness even though payment of the trust fund taxes would have resulted in his termination. The court stated that the responsible person had a choice. He could have paid the taxes and avoided the penalty or accepted the alternative of termination.²² Once an individual is deemed a responsible person, he is under no obligation recognized by the Internal Revenue code to obey instructions from his superiors to not remit trust fund taxes.²³

Lack of Knowledge of Unpaid Taxes

A responsible person with the knowledge that trust fund taxes are unpaid during his period of responsibility and proceeds to pay other creditors before the government has performed a willful act. The responsible person is liable to the extent he subsequently applies or permits the application of unencumbered funds of the company to creditors other than the government.²⁴ The court stated in Olsen v. U.W.²⁵ that “in the case of individuals who are responsible person both before and after the withholding tax liability accrues… there is a duty to use unencumbered funds acquired after the withholding obligation becomes payable to satisfy that obligation; failure to do so when there is knowledge of liability… constitutes willfulness.”²⁶

Unencumbered Funds

Funds are considered encumbered if a security interest that is superior to any interest claimed by the IRS restricts the use of those funds. All funds that are used to pay creditors other than the IRS are considered unencumbered funds that are available to pay the delinquent trust fund taxes.

Coercion by Creditors

A corporation that is coerced by a creditor to pay the creditor instead of the trust fund taxes under threat of withdrawal of an operating line of credit or the closing down of operations is considered to have established willfulness.²⁷ For example in Kalb v. U.S.,²⁸ the bank threatened to withdraw the corporations line of credit unless the bank was allowed to control the corporation’s disbursements. The corporation agreed and submitted a list of amounts owed to creditors to the bank including the trust fund taxes. The bank refused to approve payment of the trust fund taxes. The responsible person in the corporation was found to be willful since he entered into the arrangement with the bank voluntarily and was free to rescind the agreement at any time.²⁹

Reckless Disregard

The willfulness element is satisfied if there is a reckless disregard of obvious or known risks that the trust fund taxes are not being paid. Recklessness exists even when a responsible person does not know the trust fund taxes are not being paid. Following are some factual circumstances that constitute recklessness:

• Knowledge of a past history of unpaid trust fund taxes and current financial difficulties;

• Failing to investigate and correct mismanagement after obtaining knowledge there are delinquent trust fund taxes;

• Knowledge of cash flow problems and delinquent trust fund tax payments;

• Reliance on an unreliable person’s statement that trust fund taxes are paid; and

• Failing to make inquiries as to whether there are sufficient funds available for the trust fund tax payments when the corporation has financial problems.

AMOUNT OF LIABILITY

The liability of a responsible person is limited by §6672 to the amount he was required to withhold, collect, or remit.³⁰ The responsible person is not liable to the extent others pay the trust fund taxes.³¹

The liability for trust fund taxes attach each time wages are paid.³² This is a contingent liability that becomes fixed on the date the trust fund taxes are due and not paid.³³ Responsibility attaches from the time of withholding since liability attaches at the time the wages are paid.³⁴

COMMONLY RAISED DEFENSES

Lack of Sufficient Authority

An individual must have sufficient authority and power within the corporation to be considered a responsible person.

Resignation

The resignation of a responsible person from the corporation terminates the responsible person status as of that date. This only applies to the penalty for trust fund taxes withheld or collected after the date of resignation.³⁵ A similar rule applies to an individual who is relieved of his authority.³⁶

Resigning before the date the trust fund taxes are to be remitted does not avoid the responsible person’ liability.³⁷ If it is shown that he willfully preferred other creditor and there are not sufficient funds to pay the government, the responsible person will still be liable.

Lack of Knowledge

When a responsible person does not know that the trust fund taxes are not being collected or paid over to the government, the element of willfulness is negated unless the responsible persons lack of knowledge is the result of a reckless disregard of the facts.³⁸ The responsible person without knowledge may resign his position when he acquires the knowledge the trust fund taxes are not being collected or paid This may help negate willfulness or any damaging actions in the future.³⁹

Delegation of Authority

Under certain circumstances the delegation of authority may prevent an individual from being classified as a responsible person or eliminate the element of willfulness. Generally, an individual who is a responsible person cannot avoid §6672 liability by delegating his authority over corporate finances.⁴⁰ Where a delegator retains no authority, responsible person status may be avoided. A corporation’s financing arrangement where control of their finances is delegated to a bank will not end a person’s status as a responsible person.

Delegation of authority may negate the element of willfulness where the individual delegating the authority is unaware of the failure to pay taxes even thought it is not sufficient to avoid being classified as a responsible person.

Directions From Others

The ministerial functions and duties performed by an individuals who possess no independent authority or discretion are not subject to trust fund tax liability when they do not pay trust fund taxes by direction of their superior. The lack of responsible person status will avoid liability.⁴¹ It has been held it is a lack of willfulness.

When an individual possesses the authority to warrant responsible person status, directions from a superior not to pay trust fund taxes do not absolve him of trust fund tax liability. This “Nuremburg defense”, that the individual was simply following orders and would have been fired has the taxes been paid, is generally rejected by the courts.⁴²

Final Word

An individual is a responsible person even if he does not have the final word regarding the payment of creditors.⁴³ Only significant control is required to find responsible person status.⁴⁴

Defending Subordinate Employee

An individual who can establish he did not possess or exercise “significant control” may not be a “responsible person.” A principal’s control over corporate finances was so complete that the subordinate employee was not a responsible person, even though he possessed and exercised check writing authority and was an officer of the corporation. A person’s “duty” is viewed in reference to his power to compel or prohibit the disbursement of corporate funds. This is a test of substance, not form.⁴⁵

Reasonable Cause

Some courts have recognized reasonable cause as a defense to the willfulness element. The majority of courts do not recognize such a defense. A responsible person is rarely able to negate willfulness despite a conscious failure to pay over the taxes.

Equitable Defense Where Government’s Conduct Prevents Collection of Trust Fund Taxes

Generally, the liability of a responsible person is separate and distinct from the employer. The IRS is not required to collect the trust fund taxes from the employer before assessing the trust fund recovery penalty against the responsible person. Where, as a result of an abuse of discretion, if the IRS fails to collect trust fund taxes from the employer as a result of an abuse of discretion, they may be precluded from collecting the trust fund recovery penalty from the responsible person. When the government’s affirmative conduct with respect to the corporation leads to the IRS’s inability to collect the taxes, an abuse of discretion exists. The failure of the IRS to attempt to collect taxes from the employer before attempting to collect the trust fund recovery penalty from the responsible person is not considered an abuse of discretion.⁴⁶ Also, the IRS does not abuse its discretion in asserting the trust fund recovery penalty when they delay tax collection efforts against the employer.

Statute Of Limitations

The IRS is barred from assessing or collecting the trust fund recovery penalty after the applicable statute of limitations has expired. When employment tax returns are timely filed, the trust fund recovery penalty may be assessed within three years from April 15 of the year following the calendar year in which the taxes were required to be withheld or collected. The trust fund recovery penalty may be collected within 10 years after the date of assessment.

Previous Negotiations with IRS

The IRS will contact a business that has failed to pay its trust fund taxes and attempt to resolve the unpaid tax liability. These negotiations with the IRS are not relevant to any subsequent determination of willfulness on the part of the responsible person.

Alcoholism, Drug Addiction and Physical Illness

It has been held that it is legally impossible for intoxication, whatever its extent, to be the basis for a finding that a person was not responsible. Section 6772 does not require proof of specific intent. Voluntary intoxication from alcohol or drugs is not a valid defense to responsible person status.⁴⁷ Willfulness does not require specific intent. A responsible person acted knowingly, consciously, and intentionally is all that is required to prove willfulness. Voluntary intoxication cannot negate the element of willfulness.⁴⁸

An individual’s physical illness has justified a failure to remit trust fund taxes to the IRS. The physical illness has been an involuntary condition in these cases.⁴⁹ The illness may not excuse the failure to remit the taxes during all periods.⁵⁰

Courts have ruled in favor of taxpayers that were disabled due to alcoholism or other chemical dependencies.⁵¹ The courts have also refused to find fraud, which necessitates a finding of “willfulness” due to psychiatric conditions such as severe psychosis, rather than a neurosis or milder emotional disturbance.⁵² The courts has also addressed the willfulness issue as to a drug habit, but have not allowed such a defense absent evidence of psychiatric evidence or hospitalization.⁵³

Illness is not by any means a complete bar to this penalty, but proper evidence may be sufficient to overcome the willfulness element and result in a successful defense with the proper factors and evidence present.

Section 3509 Relief for Employer Negates Willfulness Under 6672

Responsible persons may maintain that the allowance of § 3509 precludes the imposition of the §6672 penalty if workers have been misclassified as independent contractors rather than employees, and the employer has been allowed the benefits of the reduced withholding rates of § 3509. The §3509 benefits are not available if the liability for employment tax is due to the employer’s intentional disregard of the requirement to deduct and withhold such tax. If a determination is made that the employer is entitled to the §3509 rates, then the degree of willfulness necessary to establish personal liability on responsible persons for the trust fund taxes under §6722 does not exist.

COLLECTION OR SATISFACTION OF AND CONSIDERATION FOR PENALTY

Joint and Several Liability

Section 6672 imposes joint and several liability on all persons determined to be liable for the trust fund penalty.⁵⁴ Each person can be assessed individually and held liable for the trust fund recovery penalty.⁵⁵ Even thought there are other liable persons, this does not affect recovery of the entire trust fund tax penalty from only one person.⁵⁶ The courts have stated that the IRS may collect the full amount of the tax only once. The IRS can choose from whom to collect the taxes. There is no required allocation.⁵⁷

Disclosure of IRS Collection Efforts Against Others

The Taxpayer Bill of Rights 2 has an amendment that states the IRS must disclose to responsible persons the names of any other persons determined by the IRS to be liable and if the IRS has attempted to collect the trust fund tax penalty from the other person, the general nature of such collection activities, and the amount collected. One who has been determined to be liable must make this request in writing.

Right of Contribution or Indemnity from Others.

The IRS often collects full payment of the trust fund recovery penalty from only one person regardless of how many persons are considered responsible. The right of contribution or indemnity allows the responsible person to recover a proportionate amount from other responsible persons.

When one or more person has paid the penalty they have the right to recover from the other persons liable for the penalty. This amount is equal to the excess paid. This suit is to be brought as a separate cause of action.

No Requirement to Collect from Employer First

The IRS is not required to collect from the employer before assessing the penalty against a responsible person.⁵⁸ The trust fund tax liability is separate and distinct from that imposed on the employer.⁵⁹

DEDUCTIBILITY OF PAYMENTS UNDER §6672

Business Deduction Under §162

A deduction for ordinary and necessary expenses incurred in a trade or business is generally allowed under §162(a). Section 162(f) provides that no deduction is allowed under §162(a) for any fine or similar penalty paid to a government for the violation of any law. Regs §1.162-21(a) states that a “fine or similar penalty” includes any amount paid under §6672. This provision does not allow a trade or business deduction for the payment of the trust fund recovery penalty.

Legal fees incurred in connection with the §6672 penalty are allowable as itemized deductions under §212(3). Legal fees and related expenses are not considered part of the fines or penalties to which they relate.

Deductibility of Accrued Interest on the Trust Fund Recovery Penalty

Section 163(a) allows a deduction for interest. There is no allowable deduction for “personal interest,” Personal interest is any interest other than interest related to a trade or business, investment interest, passive activity interest, residence interest, qualified education loan interest and §6601 interest on any unpaid portion of the §2001 tax.

The IRS argues that any interest imposed on a trust fund penalty is personal interest, just as is interest on an income tax deficiency. The taxpayer has been unsuccessful in the deductibility of trust fund interest as business interest.

Cases

1. 35 ILCS §5/1002 (from Ch. 120, par.10-1002)

2. Department of Revenue v. Heartland Investments, Inc., 106 Il. 2d 19 (1985)

3. U.S. v. Graham, 309 F.2d 210 (9^th cir. 1962)

4. Plett v. U.S., 185 F.3d 216 (4^th Cir. 1999)

5. U.S. v. Strebler 313 F2d 405(8^th Cir. 1963)

6. Muck v. U.S. 3 F3d 1978 (10^th Cir. 1993)

7. U.S. v. Sotelo, 436 U.S. 268 (1978)

8. Larson v. U.S. 76 F. Supp.2d 1092 (E.D. Wash. 2000).

9. Tiffany v. U.S., 228 F.Supp. 700(D.N.J. 1963)

10. Fisher v. U.S., 2001-1 USTC ¶50, 159 (N.D. Okla. 2000)

11. Gephart v. U.S., 818 F.2d 469 (6^th Cir. 1987)

12. Liddon v. U.S., 448 F.2d 509 (5^th Cir. 1971)

13. Monday v. U.S., 421 F2d 1030 (CA7 1970)

14. Cassidento v. U.S., 90-1 USTC ¶50,71 (d. Conn. 1990)

15. Slodov v. U.S., 436 U.S. 238 (1978)

16. U. S v. Security Pacific Business Credit, Inc., 956 F.2d 703 (7^th Cir. 1992)

17. Barrett v. U.S., 580 F.2d 449 (Ct. Cl. 1978)

18. Williams v. U.S., 26 Cl. Ct. 1031 (1992)

19. Howard v. U.S., 711 F.2d 729 (5^th Cir. 1983)

20. Hochstein v. U.S., 900 F.2d 543 (2d Cir. 1990), cert. denied, 504 U.S. 985 (1992)

21. Id.

22. Howard v. U.S., 711 F.2d 729 (5^th Cir. 1983)

23. Roth v. U.S., 779 F.2d 1567 (11^th Cir. 1986)

24. Honey v. U.S., 963 F.2d 1083 (8^th Cir. 1992), cert. denied, 506 U.S. 1028 (1992)

25. Olsen V. U.S., 952 F.2d 236 (8^th Cir. 1991)

26. Stauffer v. U.S., 98-2 USTC ¶50, 715 (D. Colo. 1998)

27. Kalb v. U.S. 505 F.2d 506 (2d Cir. 1974), cert. denied, 421 U.S. 979 (1981)

28. Id.

29. Id.

30. Monday v. U.S., 421 F2d 1030 (CA7 1970)

31. Verdung v. U.S. 421 F.2d 1210 (7^th Cir. 1970)

32. Davis v. U.S., 961 F.2d 867 (9^th Cir. 1992)

33. Teel v. U.S., 529 F.2d 903, 906 (9^th Cir. 1976)

34. U.S. v. DeBeradinis, 395 F.Supp. 944, 951 (D. Conn. 1975), aff’d 538 F.2d 315 (2d Cir. 1976)

35. Seaton v. U.S., 254 F. Supp. 161 (D. Mo. 1966)

36. Dudley v. U.S., 428 F.2d 1196 (9^th Cir. 1970)

37. Turnbull v. U.S., 929 F.2d 173 (5^th Cir. 1991)

38. Keller v. U.S., 46 F.3d 851 (8^th Cir. 1995), cert. denied, 516 U.S. 824 (1995)

39. Turpin v. U.S., 970 F.2d 1344, 1349 (4^th Cir. 1992)

40. Bradshaw v. U.S., 83 F.3d 1175 (10^th Cir. 1995), reh’g denied, 96-1 USTC ¶50,243 (10^th Cir. 1996)

41. U.S. v. Gekas, 94-2 USTC¶50,494 (M.D. Pa. 1994)

42. Greenberg v. U.S., 46 F.3d 239, 244 (3d Cir. 1994)

43. Maggy v. U.S., 560 F.2d 1372 (9^th Cir. 1977), cert. denied, 439 U.S. 821 (1978)

44. Winter v. U.S., 196 F.3d 339 (2d Cir. 1999)

45. Godfrey v. U.S., 748 F.2d 1568, 1576 (Fed. Cir. 1984)

46. Hornsby v. IRS, 588 F.2d 952 (5^th Cir. 1979)

47. U.S. v. Landau, 155 F.3d 93 (2d Cir. 1988)

48. Sherwood v. U.S., 246 F. Supp. 502 (E.D.N.Y. 1965)

49. Id.

50. In re Keith, 78-1 USTC ¶9264 (E.D. Va. 1978)

51. Chandler Jr. v. Commissioner, 60 T.C.M. 448 (1990)

52. Hollman v. Commissioner, 38 TC 251 (1962)

53. S.C. Yokum v. Commissioner, 50 TCM 906 (1985)

54. McCray v. U.S., 910 F.2d 1289 (5thCir. 1990)

55. Sinder v. U.S., 655 F.2d 729 (6^th Cir. 1981)

56. Brown v. U.S., 591 F.2d 1136 (5^th Cir. 1979)

57. Gens v. U.S., 615 F.2d 1335 (Ct. Cl. 1980)

58. U.S. v. Huckabee Auto Co., 783 F.2d 1546 (11^th Cir. 1986)

59. Bradley v. U.S., 936 F.2d 707, 710 (2d Cir. 1991)