District Court Upholds $4.3 Million penalty

A business owner is responsible for unpaid employment taxes. A U.S. District Court has upheld a $4.3 million trust fund recovery penalty that resulted from a $100,000 “preferential payment.” Denying a motion for reconsideration, the court upheld its decision that the owner of a medical practice who lent his business $100,000 to pay its next payroll, after learning an employee had embezzled millions of withheld taxes, was liable for the full “responsible person” penalty under the tax code. The sentence is 100% of the unpaid amount. (DC-TX 3/6/17, 2017-506)