Good news for the those that sign the checks. Having the authority to write checks won’t always make you liable for back payroll taxes, as this case shows.
A high-paid employee (non-officer) who signed more than 1,700 checks for a firm, including paychecks. During this time, unbeknownst to him, the company fell behind on depositing withheld taxes from employees. IRS came after him personally for the unpaid corporate payroll tax, claiming he was responsible for the shortfall. At trial, he said one of the higher-ups made the decisions on which creditors to pay, and since he wasn’t a company officer, he had no idea that the payroll taxes weren’t being deposited.
The jury believed him and a district court absolved him of the 100% trust fund penalty. I keep telling clients pay these bills first not last. They may not always listen, but I don’t keep clients who don’t listen and continue to not pay them.
(Tarpoff, D.C., Ill.).