1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-20-1995

Greenberg v USA

Precedential or Non-Precedential:

Docket 94-7075

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Recommended Citation

"Greenberg v USA" (1995). 1995 Decisions. Paper 16.

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 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 No. 94-7075 

 ___________ 

 MARK Z. GREENBERG, 

 Appellant 

 v. 

 UNITED STATES OF AMERICA; 

 DEPARTMENT OF THE TREASURY; 

 INTERNAL REVENUE SERVICE, 

 Appellees 

 ___________ 

 Appeal from the United States District Court 

 for the Middle District of Pennsylvania 

 (D.C. Civil Action No. 92-cv-00642) 

 District Judge: Honorable Sylvia H. Rambo 

 ___________ 

 Argued: August 9, 1994 

 PRESENT: HUTCHINSON and NYGAARD, Circuit Judges, 

 and LUDWIG, District Judge* 

 (Filed December 15, 1994) 

 ____________ 

Robert E. Chernicoff, Esquire (Argued) 

Paige F. Macdonald, Esquire 

Farr & Cunningham 

2320 North Second Street 

P.O. Box 1855 

Harrisburg, PA 17105 

 Attorneys for Appellant 

_______________ 
* Hon. Edmund V. Ludwig, United States District Judge for the 

 Eastern District of Pennsylvania, sitting by designation. 
Loretta C. Argrett, Esquire 

 Assistant Attorney General 

David Barasch, Esquire 

 United States Attorney 

Gary R. Allen, Esquire 

Jonathan S. Cohen, Esquire (Argued) 

Billie L. Crowe, Esquire 

Tax Division 

United States Department of Justice 

P.O. Box 502 

Washington, DC 20044 

 Attorneys for Appellees 

 ____________ 

 OPINION OF THE COURT 

 ____________ 

HUTCHINSON, Circuit Judge. 

 Appellant, Mark Z. Greenberg ("Greenberg"), appeals an 

order of the United States District Court for the Middle District 

of Pennsylvania granting summary judgment in favor of appellee, 

United States of America ("United States"), on Greenberg's claim 

for a partial refund of an amount Greenberg paid on an Internal 

Revenue Service ("IRS") penalty assessment, and on the United 

States' counterclaim to reduce the balance of the assessment to 

judgment. In doing so, the district court upheld IRS's 

assessment of a 100% "penalty" against Greenberg under section 

6672 of the Internal Revenue Code of 1954 (the "Code"), 26 

U.S.C.A. § 6672 (West Supp. 1994), after finding that Greenberg 

was a "responsible person" who had "willfully" failed to pay over 

to IRS federal employment taxes owed by his employer, Turning 

Basin, Inc. ("Turning Basin" or the "Company"). We will affirm. 
 I. Factual & Procedural History

 Turning Basin was a holding company which acquired 

other companies through leveraged buyouts. Greenberg, a 

certified public accountant since 1973, served initially as an 

outside accountant for Turning Basin while employed by Alan 

Moskowitz & Company. In late 1979, Greenberg accepted the 

position of in-house controller at Turning Basin. Soon after 

joining Turning Basin, Greenberg became its treasurer and 

assistant secretary and signed at least one corporate document, a 

loan guarantee, in this capacity. Greenberg also served as a 

member of Turning Basin's Board of Directors and in 1981 he 

received 40,000 shares of Turning Basin stock. Throughout 

Greenberg's tenure with Turning Basin, Arthur Tuchinsky 

("Tuchinsky") was Chairman of its Board of Directors, as well as 

its Chief Executive Officer and controlling shareholder. 

 As controller of Turning Basin, Greenberg supervised a 

staff of one accountant and two bookkeepers and was responsible 

for the hiring and firing of employees within his department. 

Although Greenberg acknowledged he exercised this authority, he 

contended that decisions on hiring and firing were ultimately 

determined by Tuchinsky. Greenberg also testified that Tuchinsky 

set the salaries of all of Turning Basin's employees and 

officers. 

 As controller, Greenberg was also responsible for 

preparing financial statements and reports on the Company's 

subsidiaries. These statements and reports were included in 

quarterly or semi-annual reports to Turning Basin's stockholders. 
Greenberg coordinated Turning Basin's annual audits with its 

outside accounting firm and his department was responsible for 

overseeing payment of Turning Basin's creditors and reconciling 

the Company's checking account. He was an authorized signatory 

on all of Turning Basin's bank accounts and signed checks on all 

of them. Turning Basin's corporate checkbooks were first kept in 

Greenberg's office and later in the bookkeepers' office. 

Greenberg had access to these checkbooks at all times. At his 

deposition, Greenberg stated that although he had constant access 

to the Company's checkbooks and was an authorized signatory, he 

only wrote checks when directed to do so by Tuchinsky. Greenberg 

also testified that he was not authorized to raise cash on behalf 

of the Company or make wire transfers for Turning Basin without 

specific permission from Tuchinsky. 

 Sometime in 1981, Turning Basin began having cash-flow 

problems. Greenberg then became responsible for reviewing the 

accounts payable with Tuchinsky and assisting Tuchinsky in 

determining which creditors should be paid first. Once Greenberg 

and Tuchinsky decided who would be paid, Greenberg would sign 

checks to pay them. Whenever a check was returned for 

insufficient funds, the bank or creditor would contact either 

Greenberg or Tuchinsky in order to resolve the matter. According 

to Greenberg's deposition testimony, he and Tuchinsky would again 

discuss which current bills were most urgent and Tuchinsky would 

decide who to pay and where to find the money to pay them. 

Greenberg testified that he never refused to pay anyone that 
Tuchinsky told him to pay, nor did he ever pay any creditor 

Tuchinsky told him not to pay. 

 Greenberg was also responsible for preparing and filing 

Turning Basin's federal tax returns, including its federal 

employment tax returns on Forms 940 and 941. By 1981, Turning 

Basin was delinquent in remitting the withholding taxes to IRS. 

Greenberg was aware of the tax delinquency from the time it 

began. He testified that he discussed the tax delinquencies with 

Tuchinsky and repeatedly recommended that the taxes be paid. 

Greenberg testified that Tuchinsky assured him the taxes would 

get paid, and that Greenberg had believed these assurances. He 

admitted, however, that on at least one occasion Tuchinsky 

informed him that they must pay more urgent bills right away in 

order to keep the business going and would pay the taxes later. 

 Greenberg therefore continued to write checks to 

Turning Basin's employees and other creditors despite the 

existing withholding tax delinquencies. Because Tuchinsky was 

responsible for placing money in Turning Basin's checking 

accounts, Greenberg did not write a check to IRS for the 

withholding tax delinquencies because he knew there would be no 

funds in the account to cover the check. Greenberg also believed 

that if he did issue a check to IRS without Tuchinsky's approval, 

he would have been fired immediately. He acknowledged that he 

could have authorized wire transfers of cash from the subsidiary 

corporations' accounts to Turning Basin's accounts without 

Tuchinsky's instructions but did not do so because he felt it was 

beyond his authority. 
 Eventually, Tuchinsky told Greenberg to write checks to 

cover the withholding tax delinquencies. Greenberg did so, and 

when the checks were returned for insufficient funds, Greenberg 

confronted Tuchinsky. When he realized the tax liability would 

not be paid, Greenberg resigned as an officer and director of 

Turning Basin. 

 On February 9, 1987, the IRS entered an assessment 

under 26 U.S.C.A. § 6672(a) against Greenberg for Turning Basin's 

delinquent withholding taxes. Greenberg paid $4,024.26 toward 

the assessment and on May 13, 1992 filed a complaint in the 

United States District Court for the Middle District of 

Pennsylvania seeking a refund. The United States filed an answer 

on October 6, 1992 along with a counterclaim seeking $14,456.52 

plus interest which it claimed Greenberg still owed under the 

penalty provision. 

 On June 1, 1993, the United States filed a motion for 

summary judgment, which the district court granted on December 3, 

1993. On February 4, 1994, the court entered an order amending 

the judgment to reflect Greenberg's additional payment of 

$2,335.13, making the balance due $23,881.68. The balance 

included $11,760.29 in interest which had accrued up to 

December 3, 1993. 
 II. Jurisdiction & Standard of Review

 The district court had subject matter jurisdiction over 

this action pursuant to 28 U.S.C.A. §§ 1340, 1346(a)(1) (West 

1993) and 26 U.S.C.A. §§ 7401, 7402 (West 1989). The district 

court had jurisdiction over the United States' counterclaim 

pursuant to 28 U.S.C.A. § 1346(c) (West 1993). We have 

jurisdiction over the final order of the district court pursuant 

to 28 U.S.C.A. § 1291 (West 1993). 

 We review the district court's grant of summary 

judgment de novo. United States v. Carrigan, 31 F.3d 130, 133 

(3d Cir. 1994). We consider all of the facts and inferences in 

the light most favorable to Greenberg, the nonmoving party, in 

order to determine whether there is a genuine issue of material 

fact. If no genuine issue of material fact remains, the moving 

part is entitled to judgment as a matter of law.1 Id.

 III. Analysis

 Sections 3102 and 3401 of the Code require employers to 

withhold federal social security and income taxes from the wages 

 

1. Greenberg filed his notice of appeal on January 31, 1994 but 

the district court did not enter its order amending the judgment 

to add interest until February 7, 1994. Once the district court 

acts on a motion to amend the judgment we have jurisdiction over 

the initial judgment or order identified in the notice of appeal, 

but a party seeking review of a motion that was outstanding at 

the time the initial notice of appeal was filed must file an 

amended notice of appeal. See Fed. R. App. P. 4(a)(4). No 

amended notice was filed. We note, however, that the parties to 

this appeal do not contest the amount of the judgment or the 

imposition of interest. Thus, the sole issue before us is 

Greenberg's liability for withholding tax. This was definitively 

decided by the district court's initial order. 
of their employees. 26 U.S.C.A. §§ 3102, 3401 (West Supp. 1994). 

The taxes withheld constitute a special fund held "in trust" for 

the benefit of the United States. 26 U.S.C.A. § 7501(a) (West 

1989). Section 6672 of the Code imposes a penalty on certain 

persons for failure to turn over withholding taxes to the IRS. 

26 U.S.C.A. § 6672(a) (West Supp. 1994). Specifically, it 

provides: 

 Any person required to collect, truthfully 

account for, and pay over any tax imposed by 

this title who willfully fails to collect 

such tax, or truthfully account for and pay 

over such tax, or willfully attempts in any 

manner to evade or defeat any such tax or the 

payment thereof, shall, in addition to other 

penalties provided by law, be liable to a 

penalty equal to the total amount of the tax 

evaded, or not collected, or not accounted 

for and paid over. . . . 

Id.

 There are two conditions before liability can be 

imposed under section 6672: first, the individual must be a 

"responsible person," and second, his or her failure to pay the 

tax must be "willful." See Carrigan, 31 F.3d at 133; Brounstein 

v. United States, 979 F.2d 952, 954 (3d Cir. 1992). If an 

individual's conduct fails to meet either condition, the IRS may 

not assess a section 6672 penalty against him. With this in 

mind, we consider whether the district court correctly concluded 

that Greenberg was a responsible person who acted willfully when 

he failed to pay over Turning Basin's withholding taxes. 
 A. Responsible Person Under Section 6672 

 For purposes of section 6672, a "person" is defined as 

"an officer or employee of a corporation . . . under a duty to 

perform the act in respect of which the violation occurs." 26 

U.S.C.A. § 6671(b) (West 1989). Anyone falling within this 

definition is generally referred to as a "responsible person." 

Stated another way, a responsible person, for purposes of section 

6672(a), is one who is "required to collect, truthfully account 

for or pay over any tax due to the United States." Carrigan, 31 

F.3d at 133 (citing Brounstein, 979 F.2d at 954). 

 "'Responsibility is a matter of status, duty, or 

authority, not knowledge.' While a responsible person must have 

significant control over the corporation's finances, exclusive 

control is not necessary." Brounstein, 979 F.2d at 954 (citation 

omitted) (quoting Quattrone Accountants, Inc. v. IRS, 895 F.2d 

921, 927 (3d Cir. 1990)). In determining whether an individual 

is a person responsible for paying over withholding taxes, courts 

consider the following factors: 

 (1) contents of the corporate bylaws, (2) 

ability to sign checks on the company's bank 

account, (3) signature on the employer's 

federal quarterly and other tax returns, (4) 

payment of other creditors in lieu of the 

United States, (5) identity of officers, 

directors, and principal stockholders in the 

firm, (6) identity of individuals in charge 

of hiring and discharging employees, and (7) 

identity of individuals in charge of the 

firm's financial affairs. 

Id. at 954-55. It is not necessary that an individual have the 

final word on which creditors should be paid in order to be 
subject to liability under section 6672; a person may be treated 

as "responsible" for purposes of the statute if he has 

significant control over the disbursement of corporate funds. 

United States v. Vespe, 868 F.2d 1328, 1332 (3d Cir. 1989). 

 The case before us is clearly distinguishable from the 

facts involved in Carrigan. There, we held the United States was 

not entitled to summary judgment on its claim of section 6672 

liability because there was evidence that the taxpayer was not a 

"responsible person." In Carrigan, the taxpayer was not 

responsible for handling the financial affairs of the company, 

nor did he prepare, maintain or have access to any of the 

corporate books, records or checkbooks. Furthermore, the 

taxpayer in Carrigan did not handle any creditors' bills nor 

negotiate with any creditor on behalf of the company. See

Carrigan, 31 F.3d at 133-34. 

 In contrast, Greenberg was an authorized signatory on 

all of Turning Basin's corporate checking accounts and had 

unrestricted access to them at all times. This record clearly 

shows that Greenberg used this power and signed most of the 

payroll checks issued during his tenure at Turning Basin, as well 

as checks written to a variety of other creditors, including the 

United States. Greenberg was also an officer of the Company, a 

member of its Board of Directors and a minority shareholder. 

 Greenberg was aware of the employment tax delinquency 

as soon as it arose. He wrote checks to pay other creditors 

while knowing that withholding tax liabilities to the United 
States remained unpaid.2 As controller of Turning Basin, 

Greenberg was in charge of the accounting department and 

supervised the reconciliation of checking account statements. He 

also completed various tax forms. Furthermore, Greenberg 

reviewed Turning Point's accounts payable with Tuchinsky, 

assisted Tuchinsky in determining which creditors should be paid 

and signed checks to pay creditors and meet payroll. According 

to Greenberg's own testimony, he and Tuchinsky discussed which 

creditors needed to be paid most urgently, i.e., which creditors 

were threatening to cut off crucial services or supplies, and 

then decided who to pay. Finally, Greenberg played a role in the 

hiring and firing of employees. 

 Our conclusion that Greenberg is a responsible person 

for purposes of section 6672 is supported by all of the evidence. 

The fact that Greenberg was instructed by Tuchinsky to pay 

creditors other than the United States despite the existence of 

withholding tax delinquencies and the fact Greenberg feared for 

his job were he to independently issue a check for the 

delinquency do not negate his status as a responsible person. 

 

2. The dissent argues that Greenberg's check-writing function 

was merely ministerial, and that any checks Greenberg wrote were 

"worthless unless and until Tuchinsky deposited money into the 

checking account to cover them." See infra, typescript at 3, 

lines 12-16. The record shows that Greenberg wrote checks to 

other creditors and they were successfully negotiated. Instead 

of issuing these checks, Greenberg could have chosen to write 

checks to the United States. We recognize that the record also 

contains evidence tending to show that Greenberg would have lost 

his job when Tuchinsky discovered he had paid IRS but, as the 

dissent acknowledges, the threat that a person will be fired if 

he pays withholding taxes does not excuse a responsible person 

from the obligation to pay IRS. 
"Instructions from a superior not to pay taxes do not . . . take 

a person otherwise responsible under section 6672(a) out of that 

category." Brounstein, 979 F.2d at 955 (citing Gephart v. United 

States, 818 F.2d 469, 474-75 (6th Cir. 1987); Roth v. United 

States, 779 F.2d 1567, 1571-72 (11th Cir. 1986); Howard v. United 

States, 711 F.2d 729, 734 (5th Cir. 1983)). We agree with the 

district court that this record does not leave any material 

questions of fact on Greenberg's responsibility for paying 

Turning Point's withholding taxes under section 6672. 

 B. Willfulness Under Section 6672

 The fact that Greenberg is a responsible person does 

not end our inquiry because IRS may impose section 6672 liability 

only if a responsible person "willfully" fails to collect, 

account for or pay over the withheld taxes. 26 U.S.C.A. 

§ 6672(a). We have stated, "[u]nder section 6672(a), willfulness 

is 'a voluntary, conscious and intentional decision to prefer 

other creditors over the Government.' A responsible person acts 

willfully when he pays other creditors in preference to the IRS 

knowing that taxes are due, or with reckless disregard for 

whether taxes have been paid." Brounstein, 979 F.2d at 955-56 

(citations omitted) (quoting Quattrone, 895 F.2d at 928). In 

order for the failure to turn over withholding taxes to be 

willful, a responsible person need only know that the taxes are 

due or act in reckless disregard of this fact when he fails to 

remit to IRS. "Reckless disregard includes failure to 

investigate or correct mismanagement after being notified that 
withholding taxes have not been paid." Morgan v. United States, 

937 F.2d 281, 286 (5th Cir. 1991) (per curiam); see also Vespe, 

868 F.2d at 1335. The taxpayer need not act with an evil motive 

or bad purpose for his action or inaction to be willful. 

Hochstein v. United States, 900 F.2d 543, 548 (2d Cir. 1990). 

Any payment to other creditors, including the payment of net 

wages to the corporation's employees, with knowledge that the 

employment taxes are due and owing to the Government, constitutes 

a willful failure to pay taxes. See Datlof v. United States, 252 

F. Supp. 11, 32-33 (E.D. Pa.), aff'd, 370 F.2d 655 (3d Cir. 

1966), cert. denied, 387 U.S. 906 (1967). 

 Thus, Greenberg's failure to pay the withholding taxes 

Turning Basin owed IRS is willful if he paid other creditors, 

including employees, knowing that the withholding taxes were due. 

It is no defense that the corporation was in financial distress 

and that funds were spent to keep the corporation in business 

with an expectation that sufficient revenue would later become 

available to pay the United States. See Emshwiller v. United 

States, 565 F.2d 1042, 1045-46 (8th Cir. 1977); Hochstein, 900 

F.2d at 548-49. It is also not a defense that a taxpayer would 

lose his job if he signed a check to the IRS without the express 

authority of a superior. Brounstein, 979 F.2d at 956; accord

Howard v. United States, 711 F.2d 729, 733-34 (5th Cir. 1983) 

(responsible persons' failure to ensure payment of withholding 

taxes where chief executive officer ordered him not to pay taxes 

still willful for purposes of section 6672). Finally, the 

assurance by another that the taxes will be taken care of is not 
a defense to liability under section 6672. See Denbo v. United 

States, 988 F.2d 1029, 1033-34 (10th Cir. 1993). 

 Like the taxpayers in Brounstein and Vespe, this record 

clearly demonstrates Greenberg's knowledge that Turning Basin had 

not paid withholding taxes due IRS when he was signing checks to 

Turning Basin's employees and other creditors. See Brounstein, 

979 F.2d at 956; Vespe, 868 F.2d at 1335. Greenberg does not 

contend that he was unaware of the outstanding tax liability, nor 

does he dispute that he wrote checks to other creditors despite 

his knowledge of the outstanding tax liability. The record 

clearly demonstrates that Greenberg acted willfully in failing to 

ensure payment of the withholding taxes to the IRS. As a 

responsible person, he therefore exposed himself to liability 

under section 6672. Thus, the district court did not err when it 

granted summary judgment in favor of the United States and 

against Greenberg on both Greenberg's complaint and the United 

States' counterclaim. 

 IV. Conclusion

 For these reasons, we will affirm the order of the 

district court. 

 

Greenberg v. U.S., et al, No. 94-7075 
NYGAARD, Circuit Judge, dissenting. 

 26 U.S.C. § 6672 provides that a person responsible for 

withholding and paying over taxes who willfully fails to do so is 

liable for a penalty equal to the total amount of the unpaid 

taxes. Because I think the facts of this case do not establish 

Greenberg's responsibility as a matter of law, I would reverse 

the summary judgment of the district court. Hence, I dissent. 

 Responsibility under section 6672 "is a matter of 

status, duty or authority, not knowledge." Quattrone 

Accountants, Inc. v. IRS, 895 F.2d 921, 927 (3d Cir. 1990). A 

person is responsible within the meaning of section 6672 "if the 

person has significant, though not necessarily exclusive, control 

over the employer's finances." Quattrone Accountants, 895 F.2d 

at 927. "Significant control" means "the final or significant 

word over which bills or creditors get paid." Id.; see Gephart 

v. United States, 818 F.2d 469, 473 (6th Cir. 1987) (stating that 

the test for responsibility focuses on "the degree of influence 

and control which the person exercised over the financial affairs 

of the corporation and, specifically, disbursements of funds and 

the priority of payments to creditors."); Godfrey v. United 

States, 748 F.2d 1568, 1576 (Fed. Cir. 1984) (defining 

responsibility in terms of a person's "power to compel or 

prohibit the allocation of corporate funds."). Thus, in 

Quattrone Accountants, we found an accounting firm to be a 

responsible person because it 
 paid UDF's [the employer's] monthly bills 

without prior approval. Consistent with this 

authority, [it] had possession of signature 

stamps of the treasurer and president of UDF. 

The only limitation on this authority was 

that each month [it] had to present to the 

Board of UDF the bills it had paid for the 

previous month. . . . 

Quattrone Accountants, 895 F.2d at 927. Factors we have looked 

to in determining whether a person has significant control over 

an employer's finances include: 

 (1) that person's duties under the employer's 

corporate bylaws; (2) his or her ability to 

sign checks on the employer's bank account; 

(3) the signature on the employer's federal 

quarterly and other tax returns; (4) the 

payment of other creditors in lieu of the 

United States; (5) the identity of the 

officers, directors and principal 

stockholders of the employer; (6) the 

identity of the individuals in charge of 

hiring and firing employees; and (7) the 

identity of the individuals in charge of the 

employer's financial affairs. 

Brounstein, 979 F.2d at 955. 

 The district court held that Greenberg was a 

responsible person as a matter of law. It correctly noted that 

the definition of "responsible person" is not limited to the 

person with the final say on which bills get paid, but includes 

others as well. See Quattrone, 895 F.2d at 927; see also Vespe, 

868 F.2d at 1332 ("More than one individual may be a responsible 

[pe]rson for a given employer."). The district court concluded, 

primarily from Greenberg's authority to sign checks, that he had 

such "significant say." Dist. Ct. Op. at 10. 
 I disagree that Greenberg's responsibility was 

established here as a matter of law. I think that the district 

court placed too much reliance on Greenberg's check-writing role. 

That is one factor, relevant to the question of responsibility, 

but not the only one. See Godfrey, 748 F.2d at 1575 ("The 

mechanical duties of signing checks and preparing tax returns are 

. . . not determinative of liability under § 6672."). The reason 

that check-writing ability is often significant is "because it 

generally comes with the ability to choose which creditors will 

be paid." Burack v. United States, 461 F.2d 1282, (Ct. Cl. 

1972). Here, however, it may not have. Greenberg has offered 

evidence that his check-writing functions were merely 

ministerial, done at Tuchinsky's behest and requiring his prior 

approval, and that, although Greenberg could write the checks, 

they were worthless unless and until Tuchinsky deposited money 

into the checking account to cover them. 

 The government does not dispute this evidence; it 

simply points to the other indicia of Greenberg's status. I 

think that this makes Greenberg's responsibility a question for 

the jury. The issue is "for the trier of fact to determine, upon 

all the evidence, taking into account questions of credibility 

and those reasonable inferences flowing from the evidence which 

may establish, or fail to establish, that [Greenberg] possessed a 

sufficient degree of authority over corporate decisionmaking so 

as to make him a responsible person within section 6672. . . ." 

Jay v. United States, 865 F.2d 1175, 1179 (10th Cir. 1989). 
 The district court reasoned that a finding of 

responsibility was dictated by Brounstein. I disagree. 

Brounstein was not only the treasurer of the company (like 

Greenberg), but also was president and under the corporate bylaws 

had the authority to exercise managerial control. Brounstein, 

979 F.2d at 955. Additionally, although most of the checks 

Brounstein wrote for the company were at the direction of its 

principal, he also (unlike Greenberg) issued checks without the 

principal's approval. Id.

 We did say in Brounstein that "[i]instructions from a 

superior not to pay taxes do not, however, take a person 

otherwise responsible under section 6672(a) out of that 

category[]," id. at 955 (emphasis added). That, however, does 

not foreclose the possibility that Greenberg might not be 

responsible in the first place. The government's reliance on 

Howard v. United States, 711 F.2d 729 (5th Cir. 1983) and other 

courts of appeals cases following Howard3 is, for the same 

reason, misplaced. In Howard, the Fifth Circuit stated: 

 The fact that Jennings [Howard's superior] 

might well have fired Howard had he disobeyed 

Jennings' instructions and paid the taxes 

does not make Howard any less responsible for 

their payment. Howard had the status, duty 

and authority to pay the taxes owed, and 

would only have lost that authority after he 

had paid them. Authority to pay in this 

context means effective power to pay. That 

Howard had that authority is demonstrated by 

the fact that he did issue small checks 

 

3. Gephart v. United States, 818 F.2d 469 (6th Cir. 1987); Roth 

v. United States, 779 F.2d 1567 (11th Cir. 1986). 
without Jennings' approval on a number of 

occasions. . . . 

Id. at 734 (citations omitted). These cases simply say that, if 

a person is responsible, a superior's instructions not to pay the