The courts have considered numerous factors in determining whether an individual is a person responsible for paying over withholding taxes, including and centering on whether the employee exercised significant control over the corporation's finances. The hallmarks of such control include holding a corporate office, the ability to sign checks and tax returns for the corporation, and paying other creditors in lieu of taxes. See, Greenberg v. United States, 46 F.3d 239, 242-43 (3d Cir. 1994); U.S. v. Carrigan, 31 F.3d 130 (3d Cir. 1994); Brounstein, 979 F.2d 952, 954-955 (3d Cir. 1992); Datlof v. United States, 252 F. Supp. 11, 32-33 (E.D. Pa.), aff'd, 370 F.2d 655 (3rd Cir. 1966), cert. denied, 387 U.S. 906 (1967).
Even a responsible person is not liable for Trust Fund Recovery Penalties unless his failure to collect, account for, or remit withholding taxes was willful. See, Cook v. United States 52 Fed. Cl. 62 (2002), citing Godfrey v. U.S., 748 F.2d 1568, 1574 (Fed. Cir. 1984). In order to show that failure to pay overdue taxes was willful, there must be proof of a voluntary, intentional, and conscious decision not to collect and remit taxes thought to be owed. See Godfrey, 748 F.2d at 1576-77 Citing Scott v. United States, 354 F.2d 292, 295 (1965). The United States Supreme Court has stated that willfulness requires some showing of "personal fault." See Slodov v. U.S., 436 U.S. 238 at 254 (1978).
3 Year Statute of Limitations
The courts have held that the assessment of Trust Fund Recovery Penalties under IRC Sec. 6672 is subject to the statute of limitation provided in IRC Sec. 6501(a), namely that the amount of any tax must be assessed within 3 years after the return was filed, and the IRS acquiesced to this position. See, Laucker v. U.S., 68 F.3d 69 (3rd Cir. 1995). Under section 6501(a) Trust Fund Recovery Penalties must assessed within 3 years after the return was filed. However, for employment taxes, under section 6501(b)(2), a return for any period ending with or within a calendar year that is filed before April 15 of the succeeding calendar year will be deemed filed on April 15 of the succeeding calendar year. See, T.A.M. 8510004.