The opinion of the court was delivered by: CAHN
Plaintiff, Donald F. U. Goebert, has brought this civil action against the United States for a tax refund. The United States had assessed the plaintiff for a one hundred percent civil penalty in the amount of $4,137.58 for failure to pay federal income taxes withheld in 1970 from employees of Americraft Products, Inc. (API). The plaintiff paid $50 on account of the assessment and brought this suit for a refund.
The United States, in a partial offset against payment of the assessment, retained an overpayment of plaintiff's individual income tax for the year ending December 31, 1973, in the amount of $2,793.84. The plaintiff has amended his complaint to claim a total refund of $2,843.84. The United States has counterclaimed for $1,293.74, which is the portion of the assessment which the government claims remains unpaid.
The basis of the assessment is the authority granted in 26 U.S.C. § 6672 which imposes a one hundred percent civil penalty against:
"Any person required to collect, truthfully account for, and pay over any tax imposed by this title 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 any such tax or the payment thereof . . ."
Plaintiff contends he was not a responsible person of API and did not willfully cause said corporation to fail to remit the withheld funds to the United States. Upon consideration of certain stipulated facts and the evidence produced at a bench trial, I make the following:
1. Plaintiff is Donald F. U. Goebert who resides and is domiciled at 980 East Penn Drive, West Chester, Pennsylvania, within this district.
2. The defendant and counter-claimant is the United States of America.
3. From February, 1970, to the present, plaintiff has been president and the largest shareholder of General Business Investment Corporation (GBIC) which was and is engaged in the business of making loans to business enterprises.
4. In early 1970, Nicholas Romano and William Bierlin obtained contracts to paint approximately fifty Getty Oil Company service stations in and around Philadelphia, Pennsylvania.
5. Romano and Bierlin utilized the API corporate shell as the business entity to perform the aforesaid painting contracts.
6. Thereafter Bierlin, an acquaintance of Goebert, applied to GBIC through Goebert to obtain a loan to provide working capital for API.
7. API had no funds of its own to finance the completion of the painting contract with Getty Oil Company.
8. On March 20, 1970, GBIC and API entered into a loan agreement which provided that GBIC would lend API the sum of $30,000 for 60 days at 12 percent per month interest. In addition, a placement fee of $5,000 was to be paid by API to GBIC immediately upon completion of the loan closing.
9. The loan was closed on March 23, 1970, in accordance with the terms of the loan agreement, and the placement fee was paid out of the loan proceeds.
10. The loan agreement provided that API "will cause Donald F. U. Goebert to be appointed Treasurer of the corporation and he, at his discretion, shall have complete authority to sign all checks of the corporation and to disburse the funds of the corporation. No other officer or director may disburse funds until such time as GBIC is repaid in full its loan."
11. As part of the loan transaction, certain individuals, including Romano and his wife, executed a guarantee agreement and pursuant thereto, as additional security for the loan, pledged their ...