As Florida tax attorney’s we are often asked the question as to whether the IRS can come after an officer of a company personally for taxes. As a very general rule, the state or the IRS can only come after an officer personally if the taxes are trust fund taxes. This means taxes that an individually is holding on behalf of the state. The classic example is employment taxes held by the employer for the government. Another common scenario is a company collects sales tax on behalf of the state it is considered the state’s money held in trust by the company, and personal liability becomes an issue.
Whether one is dealing with the IRS or a state for trust fund taxes, the government can come after the “responsible party.” Generally, the government comes after the officers of a company or the person signing the checks to determine who the responsible party is. But what about a corporate shareholder? Can the government come after someone who is merely a shareholder in the company as a responsible party?
In late August 2013, the Tax Court heard a case involving this very issue is Hellman v. Comm’n, 106 T.C.M. 138 ( Aug. 21, 2013) In the case, the IRS determined the shareholder, Hellman, was the responsible party and went after Hellman’s assets personally. There was a pending court case to determine whether Hellman was in fact willfully failing to pay the taxes as required by section 6672, IRC. The Taxpayer challenged the refund and said this was unfair.