Rev. Rul. 84-83

1984-1 C.B. 264, 1984-24 I.R.B. 13.

                       Internal Revenue Service
                                 Revenue Ruling

                 FAILURE TO PAY OVER TAX;  RESPONSIBLE PERSONS

                            Published: June 11, 1984

Section 6671. - -Rules for Application of Assessable Penalties, 26 CFR 301.6671- 1:  Rules for application of assessable penalties.

Section 6672. - -Failure to Collect and Pay Over Tax, or Attempt to Evade or Defeat Tax, 26 CFR 301.6672-1:  Failure to collect and pay over tax, or attempt to evade or defeat tax.

(Also Section 6671; 301.6671-1.)

  Failure to pay over tax;  responsible persons.  A volunteer member of a board of trustees of a charitable organization may be liable for unpaid employment and withholding taxes in certain circumstances under section 6672 of the Code.

ISSUE

  Can a volunteer member of a board of trustees of organizations referred to in section 501(a) of the Code can be considered a responsible person and liable for the penalty under section 6672?

LAW AND ANALYSIS

  Under section 6672(a) of the Code any person required to collect, truthfully account for, and pay over any internal revenue tax 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 such tax or the payment thereof, shall, in addition to other penalties, 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 will be imposed under section 6653 for any offense to which this section is applicable.

  Section 6671(b) of the Code defines the term person to include an officer or employee of a 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.

  The determination of who is the person under a duty to collect, account for, and pay over the employment and withholding taxes for wages paid to employees is especially dependent upon the facts of the case.  See United States v. Graham, 309 F.2d 210 (9th Cir.1962);  Bauer v. United States, 543 F.2d 142 (Ct.Cl.1976);  Feist v. United States, 607 F.2d 954 (Ct.Cl.1979).

  The term "person" includes an officer or employee, but does not exclude others.  Its scope is illustrated rather than limited by the examples in section 6671(b) of the Code.  Section 6672(a) is addressed to those persons who have responsibility for payment of the withheld taxes, who have knowledge of the tax delinquency and who have authority over the decision to pay or not to pay the taxes, not necessarily persons who have the duty of filling out the forms. Trustees can have this responsibility, knowledge and authority.

HOLDING

  The trustee can be liable for unpaid employment and withholding taxes.  The fact that a trustee is a volunteer member of the board of trustees does not in and of itself mean the trustee will or will not be deemed liable.  The trustee's liability depends on whether he or she is found to meet the tests of responsibility and willfulness under section 6672 of the Code.

Rev. Rul. 84-83, 1984-1 C.B. 264, 1984-24 I.R.B. 13.