Father not responsible for steep tax penalty

A restaurant didn’t send payroll taxes it collected from employees to the IRS. The U.S. Tax Court has concluded that the father of the co-manager wasn’t a “responsible person” for purposes of the tax code’s trust fund recovery penalty just because he signed a few checks. The father lacked sufficient control over the business; wasn’t an owner, director or employee; and wasn’t an official signatory of the company’s bank accounts. The penalty would have been equal to the amount of tax that wasn’t paid. (TC Memo 2017-35)