abandoned the corporation; Hall and Lamont remained corporate officers, with their commensurate corporate duties and authority, during all of the taxable quarters in issue.
There remains nevertheless the difficult issue concerning the contact Kordopatis had with Fashion Forward's vendors in June 1990 through 1991 as set forth in Findings 29 through 31. The issue is whether or not vendors were paid in lieu of taxes due the United States and whether Kordopatis had significant control over those payments. Without a doubt he had no official status or final authority in that regard, but the bookkeeper Krammes had the impression from Lamont (the president) "that she was to perform her duties at the direction of Kordopatis." Because he lacked such formal status, we ultimately must consider to what extent persons others than owners, directors, officers, and employees are potentially liable for penalties under 26 U.S.C. § 6672. The Third Circuit has rarely dealt with this issue. However, in Quattrone, the Third Circuit held that a debtor accounting firm could be held liable if it had significant control over the employer's finances. Quattrone, 895 F.2d at 927. Quattrone noted that a responsible person must be under a duty "to perform the act in respect of which the violation occurs." Id. at 927 n.5 (citing 26 U.S.C. § 6671(b)). In discussing this issue, Quattrone also relied on Adams v. United States, 504 F.2d 73 (7th Cir. 1974). 895 F.2d at 927. As reasoned in Adams, "Responsibility for nonpayment of the tax includes all those so connected with the business as to be responsible for the performance of the act in respect of which the violation occurs." Adams, 504 F.2d at 75-76. " § 6672 is broad enough to reach an entity which assumes the function of determining whether or not the employer will pay over taxes withheld from its employees." Adams, 504 U.S. at 76 (citing Pacific National Insurance v. United States, 422 F.2d 26, 30 (9th Cir. 1970), cert. denied, 400 U.S. 883, 27 L. Ed. 2d 121, 91 S. Ct. 116 (1970)). In all of the above cited cases, the plaintiff, unlike Kordopatis, assumed a function which involved the determination of whether or not the employer would pay employees or payroll taxes. The function Kordopatis assumed was not broad enough to implicate such a determination. We find that although he had some control over which vendor bills were paid that control did not extend to other creditors and in particular did not extend to any control over payroll or over taxes due the government. As discussed earlier, the fact that Kordopatis paid utilities from his own funds underscores his limited role. Thus, we find that Kordopatis did not have significant control over payments made in lieu of taxes due the United States.
The evidence that Kordopatis lacked authority and actual control of Fashion Forward's financial affairs has come from numerous witnesses and has been abundant. Against this evidence there has been only limited indirect evidence such as the lockout in December 1990 and the dealings with some vendors from June 1990 through 1991. The weight of the evidence compels us to find that Kordopatis has met his burden of proving he was not a responsible person during the taxable periods in issue. Accordingly, we need not reach the issue of whether Kordopatis's conduct was "willful." Judgment will be entered for the plaintiff. IV. CONCLUSIONS OF LAW
Pursuant to Fed. R. Civ. P. 52(a) we state the following conclusions of law:
1. Plaintiff Nicholas G. Kordopatis is not an officer, director, employee or shareholder of the corporation Fashion Forward and had no authority to sign checks or hire or fire employees for the same.
2. Plaintiff Nicholas G. Kordopatis was not in charge of the financial affairs of the corporation Fashion Forward and never paid taxes or signed tax returns for them.
3. Plaintiff Nicholas G. Kordopatis never paid other creditors in lieu of taxes on behalf of the corporation Fashion Forward.
4. Plaintiff Nicholas G. Kordopatis has proven he is not a interested person under 26 U.S.C. § 6672(a).
An appropriate order follows.
AND NOW, this 13th day of January 1997, in consideration of the evidence presented during a two-day non-jury trial beginning on September 25, 1996; Plaintiff's Brief and Proposed Findings of Fact and Conclusions of Law both filed October 17, 1996; the United States's Proposed Findings of Fact and Conclusions of Law, Post Trial Brief, and Response to Plaintiff's Findings all filed on November 7, 1996; and Plaintiff's Response thereto filed November 14, 1996, it is hereby ORDERED:
1. JUDGMENT is entered for the Plaintiff Nicholas G. Kordopatis on all claims and counterclaims;
2. The United States shall pay over to Plaintiff any and all sums of money which have been paid on his account and any and all monies which have been intercepted by the Internal Revenue Service to satisfy the penalty assessed against Plaintiff pursuant to 26 U.S.C. § 6672. Any and all monies paid back to Plaintiff shall include interest at the prime rate plus two percent (2%) from the time the payments were made or funds intercepted, inclusive.
3. The United States shall take every action required by them to indicate that any tax assessments or judgments against Plaintiff in this matter are extinguished and satisfied.
4. This case is closed.
BY THE COURT
Franklin S. Van Antwerpen
United States District Judge