2. REQUIREMENTS FOR LIABILITY

§ 5:3 In general

There are two major tests to determine if someone is subject to the provisions of IRC § 6672. They are primarily questions of fact and may be stated as follows:

(1) Whether the party against whom the penalty is proposed had the duty to account for, collect, and pay over trust fund taxes; and

(2) Whether he or she willfully failed to perform this duty.

During the course of this text we will extensively discuss these two tests and the manner in which the courts have interpreted them. In general, the Internal Revenue Service has the right to pursue any person who meets the tests, even if he was not an officer or employee of the corporation which originally collected the taxes. In fact, on many occasions the Internal Revenue Service has asserted the penalty against accountants and attorneys who were not employees of the collecting corporation.

§ 5:4 Assessment against several persons

The penalty can be assessed against more than one person. It is not unusual for the Internal Revenue Service to assess the penalty against several responsible persons. In the event that the IRS; assesses several persons, it may collect the entire liability from any of those persons. Although the Service has a policy of not attempting to collect more than the total amount of the withheld taxes [IRM P-5-60, dated February 2, 1993], it consistently errs and collects more than the penalty from the various officers. This occurs because the Internal Revenue Service has never Read More