An exempt group’s volunteer board chairman is personally liable for the companies unpaid payroll taxes, according to a district court rules.
Even though he did not have the power to write checks, have active management nor did he handle personnel matters. His crime was that he regularly lent money to the group to keep it afloat. Tis was considered to effectively having financial control of the organization.
As chairman of the board he did have the ability to influence corporate decisions, such as when he objected to proposed pay raises. As a result, he had a duty to ensure that the taxes were paid
Typically volunteer directors can be exempt from payroll tax penalties. To qualify, they must serve in an honorary capacity, not be involved in daily operations and not know of the payroll tax delinquency. The chairman in this case failed that test.
(Bunch, D.C., Tenn.).