Responsible person.

• Author: Laffie, Lesli S.
• Position: For an unpaid employment tax liability

In Steven Lindsey, 10th Cir., 10/7/02, the Tenth Circuit upheld a determination that an individual was a Sec. 6672 responsible person for an unpaid employment tax liability, despite the fact that he had no check-signing authority for the employer corporation.

The taxpayer was a founder and 50% shareholder of TFS, which leased truck drivers to Clearwater, another company with the same owners. He was president of Clearwater and vice president of TFS.

TFS operated rent-free using Clearwater's facilities and had no financial obligations other than for payroll and employment taxes. The taxpayer had substantial financial control over TFS because he authorized all employee lease payments from Clearwater to TFS; he could sign Clearwater checks, but not TFS checks.

Financial problems led Clearwater to stop paying TFS amounts to cover the truck drivers' wages and the employment taxes; thus, TFS failed to pay its employment taxes. The taxpayer contended that, because he lacked authority to write...