The opinion of the court was delivered by: Ditter, J.
This case comes before me on cross-motions for summary judgment. The plaintiff, George M. Vanicsko, is seeking recovery of the federal tax refunds withheld from him as a result of an assessment of a penalty by the Internal Revenue Service ("IRS") for trust fund taxes owed by VW Painting-Coating, Inc. ("VW Painting"). He also seeks a declaration that the assessment was improper and an abatement of the assessment. The plaintiff claims that he was not a "responsible person" required to collect and pay taxes for VW Painting, nor did he "willfully" fail to pay the trust fund taxes owed by the company. The United States asserted a counterclaim seeking payment from the plaintiff of the entire assessment of trust fund recovery penalties, plus interest and other statutory additions. For the reasons that follow, I will deny the plaintiff's motion and grant the United States' motion for summary judgment.
I. FACTUAL BACKGROUND*fn1
VW Painting, an industrial and commercial painting and coating company, began operation in 1991 and went out of business around 2004. The decision to form and then dissolve the company was made jointly by the plaintiff and his former wife, Rosemary Vanicsko. VW Painting operated out of the jointly-owned residence of the plaintiff and Rosemary Vanicsko until 2000, when they made a joint decision to move the company to a jointly-owned business property. The plaintiff and Rosemary Vanicsko were married in 1991, separated in 2000 or 2001, and divorced in 2004. The vans and trucks used by VW Painting were owned by the plaintiff and he received no compensation for their use.
Rosemary Vanicsko was the named shareholder and president of VW Painting; she held those titles because it qualified the company as a woman-owned business enterprise. As president, she handled the bookkeeping and accounting, including managing accounts payable, and signed the checks made out to the United States for withholding taxes of VW Painting's employees, among other duties.
The plaintiff held himself out as vice-president of VW Painting,*fn2 was the project manager, and worked in the field as a painter; during his association with VW Painting, his duties remained roughly consistent. The plaintiff supervised employees and foremen working in the field, scheduled projects, and made personnel and supply decisions, including decisions on hiring and firing. The plaintiff had authority to sign proposals for potential projects, negotiate and modify work contracts, and bind VW Painting for rental services contracts. Part of the plaintiff's duties at VW Painting included calculating the amount of payments owed by contractors, signing applications for payments, and preparing the invoices submitted to contractors. He also approved invoices for payment relating to materials and equipment used by VW Painting. The plaintiff had the authority to sign liens against contractors that failed to pay VW Painting, bind VW Painting to contracts for attorney services, and sign settlement agreements on behalf of the company. The plaintiff had unrestricted use of a debit card connected to VW Painting's bank account. He was the highest paid employee of VW Painting during the relevant periods.
The plaintiff and Rosemary Vanicsko had authority to borrow money on behalf of VW Painting and made personal loans to the company. In 2000, the plaintiff and Rosemary Vanicsko signed a loan application from Commerce Bank in an attempt to secure a loan for VW Painting; VW Painting eventually obtained a $75,000 loan from the bank and both signed the loan documents. In 2002, a check in the amount of $61,000 was issued from the joint account of the plaintiff and Rosemary Vanicsko to VW Painting; that same day, a check in the amount of $61,000 was issued from VW Painting to the IRS to pay a portion of VW Painting's tax liabilities.
For eight tax quarters from 2000 to 2002, VW Painting failed to pay the taxes it withheld from the wages of its employees. The plaintiff attended meetings at the IRS in 2001 and 2002, where VW Painting's tax liabilities were discussed, and subsequent to those meetings, he continued to receive checks indicating that taxes were being withheld from his wages. On June 23, 2003, the Internal Revenue Service withheld the plaintiff's federal tax refunds and assessed trust fund recovery penalties against him under 26 U.S.C. § 6672 based on VW Painting's failure to pay the taxes. The amount of the assessment was $368,608.
The plaintiff contends that he was not a "responsible person" required to collect and pay taxes for VW Painting, because he did not have final or significant say over payments made by the company, did not maintain its books and financial records, and did not direct communications with the IRS. He claims that his wife, Rosemary Vanicsko, was the only person at VW Painting with such authority. The plaintiff contends that he could not have acted "willfully" in failing to pay VW Painting's taxes, because he had limited access to VW Painting's financial records and did not have authority to direct payments. The United States argues that the trust fund recovery penalty assessment against the plaintiff is presumptively valid. The United States contends that the plaintiff's status with VW Painting and his authority to make financial decisions on behalf of the company make him "responsible" and that his failure to act upon learning of VW Painting's tax liabilities constitutes a "willful" failure to pay the taxes owed to the IRS.
This court has subject matter jurisdiction over the plaintiff's action pursuant to 28 U.S.C. §§ 1340, 1346(a)(1) and 26 U.S.C. §§ 7401, 7402 and over the United States' counterclaim pursuant to 28 U.S.C. §§ 1345, 1346(c).
The standard for deciding a motion for summary judgment under Rule 56(c) is well- established. I must consider all the facts and inferences in the light most favorable to the nonmoving party. The moving party should prevail in its motion only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. However, the motion must be ...