IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 17-20174

GAIL MCCLENDON, 

 Plaintiff – Appellant,

v.

UNITED STATES OF AMERICA, 

 Defendant – Appellee.

Appeal from the United States District Court 

for the Southern District of Texas

Before DAVIS, JONES, and HIGGINSON, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Gail McClendon appeals the district court’s summary judgment

determining that her late husband, Dr. Robert McClendon (“McClendon”), was 

personally liable under 26 U.S.C. § 6672 for over $4.3 million in penalties for

the unpaid withholding taxes of his medical practice. She also appeals the 

district court’s subsequent denial of McClendon’s motion requesting 

reconsideration of the summary judgment. As explained more fully below, we

REVERSE the denial of the motion for reconsideration, AFFIRM IN PART and 

VACATE IN PART the summary judgment, and REMAND the case for further 

proceedings consistent with this opinion.

United States Court of Appeals

Fifth Circuit

FILED

June 14, 2018

Lyle W. Cayce

Clerk

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I.

In 1979, McClendon founded Family Practice Associates of Houston 

(“FPA”), a professional medical association. By 1995, FPA employed five 

doctors, numerous nurses, and related support staff. During that year, the 

board of directors of FPA hired Richard Stephen, a certified public accountant, 

to serve as FPA’s chief financial officer. From 1995 to 2009, Stephen informed

the board that FPA was doing well financially and that all of FPA’s tax 

obligations were being met.

On or about May 11, 2009, however, FPA learned from the Internal 

Revenue Service (“IRS”) that Stephen’s representations were false. 

Specifically, the IRS had no record of any payroll tax deposits on behalf of FPA 

for several of the previous years. FPA subsequently discovered that Stephen

failed to remit FPA’s federal withholding taxes for twenty-one consecutive 

quarters, from the third quarter of 2003 to the third quarter of 2008, and that 

he had been stealing money from FPA for many years. The consequences were 

disastrous: FPA accrued an unpaid withholding tax balance of over $11 million. 

According to McClendon’s deposition testimony and affidavit, as soon as 

the board discovered that the payroll taxes were unpaid, FPA stopped paying 

its creditors and vendors, as advised by counsel. To avoid using any of FPA’s 

existing or future funds, and to ensure that FPA’s staff employees received 

their payroll checks in May 2009, McClendon and his wife loaned FPA 

$100,000. In addition, McClendon and his two fellow board members created a 

separate company, MST Interests, L.L.C., to use their own personal funds to 

pay FPA’s non-IRS creditors. FPA remitted all existing receivables and any 

new receivables it subsequently received directly to the IRS. The amount of 

receivables FPA paid the IRS totaled over $400,000. FPA also turned over to 

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the IRS $250,000 in insurance proceeds it received on the insurance claim it 

filed for employee theft.1

McClendon and the other board members filed a criminal complaint 

against Stephen. In 2013, Stephen pleaded guilty in Texas state court to firstdegree felony theft of property over $200,000. He was sentenced to ten years

in prison.

II.

On August 27, 2012, the IRS assessed approximately $4.3 million in

penalties against McClendon personally, pursuant to 26 U.S.C. § 6672,2 for the 

twenty-one quarters FPA failed to remit its withholding taxes. McClendon paid 

a nominal portion of the penalties and then filed suit under 26 U.S.C. § 7422,3

seeking a refund of the portion paid and abatement of the penalties assessed.

McClendon alleged that the IRS wrongfully assessed the penalties because he 

“was not a responsible party and did not willfully fail to remit funds due to the 

IRS,” as required to impose liability under § 6672.

In response, the Government filed a counterclaim against McClendon, 

seeking to convert the penalties into a $4.3 million judgment. The Government 

also filed a counterclaim against Stephen, adding him as a party to the action.

The Government maintained that joining Stephen was proper because both 

 

1 FPA also issued a check for $2,000 to its 401(k) plan manager (John Hancock 

Insurance Company) and a check for $1,840.42 to Dr. James Trippett. McClendon contended 

that these funds did not belong to FPA, but related to FPA’s 401(k) plan and were erroneously 

deposited into FPA’s account.

2 Section 6672 provides that “[a]ny person required to collect, truthfully account for, 

and pay over any tax imposed by this title who willfully fails” to do so shall “be liable to a 

penalty equal to the total amount of the tax . . . not accounted for and paid over.” 26 U.S.C. 

§ 6672(a). The term “responsible person” is commonly used to refer to the statutory phrase, 

“person required to collect, truthfully account for, and pay over any tax imposed by [the 

Internal Revenue Code].” See Barnett v. I.R.S., 988 F.2d 1449, 1453 n.6 (5th Cir. 1993).

3 Section 7422 allows for a civil action against the United States for any internal 

revenue tax “erroneously or illegally assessed” after “a claim for refund or credit has been 

duly filed with the Secretary [of the Treasury].” 26 U.S.C. § 7422(a), (f)(1).

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Stephen and McClendon had been assessed § 6672 penalties for FPA’s unpaid 

withholding taxes for the same time periods. The Government further 

contended that, under the jurisprudence interpreting § 6672, Stephen and 

McClendon were jointly and severally liable for the penalties.

The Government thereafter filed a motion seeking summary judgment

against McClendon only. The Government argued that it was entitled to 

summary judgment because the evidence established the two requirements 

necessary for liability under § 6672: (1) McClendon was a “responsible person” 

for payment of FPA’s payroll taxes; and (2) McClendon “willfully failed” to pay 

the taxes to the IRS. The Government contended that McClendon’s failure was 

willful because he admitted to using FPA funds to pay creditors other than the 

IRS after he learned of the unpaid payroll taxes. In particular, McClendon 

admitted that he loaned FPA $100,000 to cover the May 2009 payroll for FPA’s 

staff employees; that he paid Dr. Trippett $1,840; and that he paid John 

Hancock Insurance Company $2000. The Government additionally asserted 

that McClendon was grossly negligent in delegating, with no oversight, the 

responsibility of paying payroll taxes to Stephen for years and that such 

conduct also constituted willfulness under § 6672. Therefore, the Government 

asserted that summary judgment should be granted in its favor for the $4.3 

million in assessed penalties, less any payments or credits to which McClendon 

was entitled. 

In his opposition to the Government’s motion, McClendon conceded that 

he was a responsible person under § 6672. He contested, however, that he 

willfully failed to pay FPA’s payroll taxes after learning of the unpaid taxes.

McClendon asserted that the $2,000 payment to John Hancock Insurance 

Company and the $1,840 payment to Dr. Trippett involved funds relating to

FPA’s 401(k) plan and did not involve any funds belonging to FPA that could 

have been used to pay the IRS. He further asserted that his $100,000 loan to 

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FPA also could not have been used to pay the IRS because those funds were 

“encumbered.” Specifically, he asserted that he loaned FPA the money with the 

restriction and agreement that the funds would only be used to cover the May 

2009 payroll for FPA’s staff employees. He also asserted that his loan

constituted “reasonable cause,” absolving him of § 6672 liability under the 

jurisprudence. Finally, McClendon contended that he was not grossly negligent 

by relying on Stephen to handle FPA’s payroll taxes.

In its reply memorandum, the Government reasserted that McClendon’s 

admission that he loaned FPA $100,000 to pay its employees instead of the IRS 

after learning of the unpaid taxes established that McClendon acted willfully

under § 6672. The Government further maintained that, contrary to 

McClendon’s contentions, his $100,000 loan to FPA was not “encumbered”

under the relevant jurisprudence and, thus, could have been used to pay the 

IRS. Finally, the Government asserted that McClendon’s actions did not 

constitute “reasonable cause.”

The district court granted the Government’s motion for summary 

judgment against McClendon. It determined that McClendon acted willfully 

under § 6672 because, after learning of the unpaid taxes, he loaned FPA 

$100,000, which FPA then used to make payroll instead of paying the IRS. The 

district court further determined that although McClendon contended that the 

loan’s use was restricted to payment of the May 2009 payroll, the funds were 

not encumbered for purposes of § 6672 liability. Relying on cases from other 

circuits,4 the district court concluded that a responsible person cannot “shield 

 

4 The district court noted that in our decision in Barnett, we adopted the Eighth 

Circuit’s definition of unencumbered funds as stated in Honey v. United States, 963 F.2d 1083 

(8th Cir. 1992). The district court further found persuasive the Sixth Circuit’s decision in Bell 

v. United States, 355 F.3d 387, 396 (6th Cir. 2004), wherein the court applied Honey and 

determined that “[c]orporate funds should not be considered encumbered [under § 6672] 

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himself from liability by entering into preferential lending arrangements, in 

which the person voluntarily assumes a contractual obligation to pay some set 

of creditors before paying the government.” The district court further 

determined that McClendon was not entitled to the reasonable-cause defense.

It issued a judgment in favor of the Government for the total amount of 

penalties assessed against McClendon, approximately $4.3 million, less any 

payments already made.

III.

McClendon thereafter filed a motion for reconsideration under Federal 

Rule of Civil Procedure 54(b), or in the alternative, to alter or amend the 

judgment under Rules 52(b) and 59(e). In the motion, McClendon raised a new 

argument. He asserted that under this Court’s precedent, even if he were a 

responsible person and acted willfully, his liability under § 6672 was limited 

to the amount of unencumbered funds FPA had available after he learned of 

the unpaid taxes. Pointing to his deposition testimony, his affidavit in support 

of summary judgment, and copies of checks, he asserted that the evidence 

submitted at the summary judgment level reflected that all of FPA’s available 

unencumbered funds were paid over to the IRS after his discovery of the 

unpaid taxes. He contended that the only evidence of funds not paid over to the 

IRS was the $100,000 loan he made to FPA to cover the May 2009 payroll.

McClendon asserted that, therefore, he could be liable to the Government for, 

at most, $100,000.

In its opposition to McClendon’s motion for reconsideration, the 

Government acknowledged the jurisprudence providing for a cap on § 6672 

liability. The Government asserted, however, that McClendon was not entitled 

 

simply because a contractual obligation with a lender or other creditor impacts a company’s 

ability to use its assets, receivables, or loan advances with complete freedom.”

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to this limitation on his liability because he “failed to meet his burden of 

proving what the universe of available funds were, whether they were 

unencumbered, and if so [whether] they were paid to the IRS.” Pertinent to the 

issues on appeal, the Government further contended that entitlement to the 

limitation on his liability “necessarily require[d] a full accounting of all of the 

company’s available funds after the given date that knowledge was acquired.” 

The Government pointed out that McClendon had not introduced any of FPA’s 

bank records to show how much was deposited after his discovery of the unpaid 

taxes. 

Additionally, the Government argued that even if the cap were available, 

the district court would still need to address the Government’s alternative 

argument on willfulness: that McClendon was grossly negligent with regard to 

the risk that FPA’s withholding taxes would go unpaid. The Government 

asserted that, in that case, McClendon would not be entitled to a limit on his 

§ 6672 liability equal to the amount of available unencumbered funds after 

discovery of the unpaid taxes. Furthermore, the Government argued that the 

district court’s summary judgment was a final judgment which should not be 

reconsidered.

In reply, McClendon provided a copy of an additional check which he 

asserted showed that FPA’s closing balance in July 2009 of $296,722.28 had

all been turned over to the IRS. McClendon further contended that any 

determination regarding his alleged gross negligence was “rife with genuine 

issues of material fact.” 

The district court denied McClendon’s motion for reconsideration “for 

two independent reasons.” First, applying the standard for Rule 59(e) motions, 

the district court determined that McClendon should have raised his limitation 

of liability argument in the summary judgment briefing and that he could not 

raise the argument for the first time in his motion to reconsider. Second, the 

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district court concluded that, even if the argument were properly before it, 

McClendon’s argument failed on the merits. Specifically, the district court

determined that “McClendon had the burden of proof on the issue of the 

availability of the funds” and that he failed “to submit or identify record 

evidence” satisfying his burden. The district court then certified its grant of 

summary judgment in favor of the Government and its denial of McClendon’s 

motion for reconsideration for immediate interlocutory appeal under 

Rule 54(b). McClendon timely appealed.

IV.

This court reviews a grant of summary judgment de novo, applying the 

same standard as the district court.5 “The court shall grant summary judgment 

if the movant shows that there is no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.”6 When the 

nonmovant bears the burden of proof at trial, “the movant may merely point to 

an absence of evidence, thus shifting to the non-movant the burden of 

demonstrating by competent summary judgment proof that there is an issue of 

material fact warranting trial.”7 “All reasonable inferences must be viewed in 

the light most favorable to the party opposing summary judgment, and any 

doubt must be resolved in favor of the non-moving party.”8

We typically review the denial of a motion for reconsideration, whether 

under Rule 54(b) or Rule 59(e), for abuse of discretion.9 However, when the 

district court denies a motion to reconsider a grant of summary judgment, but, 

in doing so, considers any materials attached thereto and still grants summary 

 

5 In re La. Crawfish Producers, 852 F.3d 456, 462 (5th Cir. 2017).

6 FED. R. CIV. P. 56(a).

7 In re La. Crawfish Producers, 852 F.3d at 462.

8 Id. (citations omitted).

9 Id. (citation omitted).

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judgment, our review is de novo, as those materials become part of the 

summary judgment record.10

A.

In our decision in Austin v. Kroger Texas, L.P.,11 issued just weeks after 

the district court’s decision in this matter, we clarified the relationship 

between Rules 54(b) and 59(e). Whereas Rule 59(e) applies only to final 

judgments and does not permit consideration of arguments that could have 

been raised previously, Rule 54(b) applies to interlocutory judgments and 

permits the district court “to reconsider and reverse its decision for any reason 

it deems sufficient.”12 We held that when a district court applies the more 

stringent Rule 59(e) standard in denying a motion to reconsider an 

interlocutory order, we must vacate and remand “for the district court to 

reconsider [the] motion for reconsideration under the more flexible 

Rule 54(b).”13

In this case, the district court’s summary judgment against McClendon 

was interlocutory because it did not end the action, as the Government’s 

counterclaim against Stephen remained pending.14 Rule 54(b), therefore,

provided the correct standard for deciding McClendon’s motion for 

reconsideration. If the district court had relied only on its first basis for 

denying the motion— that McClendon could not raise his limitation of liability 

argument for the first time in a motion to reconsider under Rule 59(e), we 

 

10 Id. at 463 (citation omitted).

11 864 F.3d 326 (5th Cir. 2017). 12 Id. at 336 (citation omitted).

13 Id. (citation omitted).

14 See FED. R. CIV. P. 54(b) (“[A]ny order or other decision, however designated, that 

adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties 

does not end the action as to any of the claims or parties and may be revised at any time 

before the entry of a judgment adjudicating all the claims and all the parties’ rights and 

liabilities.”).

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would be required under Austin to vacate the district court’s denial of the 

motion to reconsider and remand for application of the correct standard.15

However, the district court provided an additional basis for denying the 

motion. It determined that McClendon’s motion to reconsider also failed on the 

merits because McClendon, at the summary judgment stage and in his motion 

for reconsideration, “did not disprove the presumption that he was liable for 

the penalty by accounting for [FPA’s] funds and demonstrating that they could 

not cover the tax obligation.” 

When the district court denies a motion to reconsider a grant of summary 

judgment, but considers the evidence attached to the motion in doing so and 

still grants summary judgment, our review is de novo.16 As explained more 

fully below, we respectfully disagree that McClendon failed to demonstrate a 

genuine issue of material fact as to whether the amount of available,

unencumbered funds was insufficient to pay the $4.3 million in assessed 

penalties.

B.

The Internal Revenue Code requires businesses to withhold from their 

employees’ paychecks their employees’ federal income taxes and social security 

contributions.17 Businesses must then hold the funds “in trust” for the United 

States.18 Because there is no general requirement that the funds be segregated 

from the employer’s general funds, “the funds accumulated during the quarter 

 

15 See Austin, 864 F.3d at 337.

16 In re La. Crawfish Producers, 852 F.3d at 462.

17 See 26 U.S.C. §§ 3102(a) (relating to deduction of FICA taxes), 3402(a) (relating to

withholding tax on wages applicable to individual income taxes). 18 26 U.S.C. § 7501(a). 

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can be a tempting source of ready cash.”19 Failing to withhold or remit the 

funds can result in civil and criminal penalties.20 

As stated above, this case concerns the penalty provision set forth in 26 

U.S.C. § 6672, which provides in relevant part: 

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.21

Importantly, § 6672 does not penalize the business entity itself; it penalizes 

the business’s “officers or employees” who were (1) “responsible for effectuating 

the collection and payment of trust-fund taxes” but who (2) “willfully fail[ed] 

to do so.”22 Those individuals are “made personally liable to a ‘penalty’ equal 

to the amount of the delinquent taxes,”23 which the IRS then assesses and 

collects from them “in the same manner as taxes.”24

In cases under § 6672, “once the Government offers an assessment into 

evidence, the burden of proof is on the taxpayer to disprove his responsibleperson status or willfulness.”25 This rule applies when the Government 

initiates the action by filing suit to convert the assessment into a judgment and 

when the taxpayer initiates the action by filing suit for a refund and the 

Government counterclaims, as in this case.26

 

19 Slodov v. United States, 436 U.S. 238, 243 (1978).

20 See 26 U.S.C. §§ 6672, 7202.

21 26 U.S.C. § 6672(a).

22 Slodov, 436 U.S. at 244–45.

23 Id. at 245.

24 26 U.S.C. § 6671(a). Responsible persons are jointly and severally liable, Brown v. 

United States, 591 F.2d 1136, 1142 (5th Cir. 1979), and they may seek contribution from each 

other, 26 U.S.C. § 6672(d).

25 Barnett, 988 F.2d at 1453 (citations omitted).

26 See Morgan v. United States, 937 F.2d 281, 285 (5th Cir. 1991).

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This Court “generally takes a broad view of who is a responsible person” 

in a § 6672 case.27 The crucial inquiry when determining whether someone is 

a “responsible person” is “whether the person had the ‘effective power’ to pay 

the taxes.”28 In the district court, McClendon conceded that he was a 

responsible person under § 6672.

“Willfulness under § 6672 requires only a voluntary, conscious, and 

intentional act, not a bad motive or evil intent.”29 It may be proved in two ways. 

First, willfulness may be proved by evidence that the responsible person 

(1) had actual knowledge that the business was delinquent on its withholding 

taxes but (2) used the business’s unencumbered funds to pay the business’s 

non-IRS creditors anyway.30 Funds are considered “encumbered” if they are 

“subject to restrictions imposed by a creditor holding a security interest in the 

funds which is superior to any interest claimed by the IRS,” and “those 

restrictions preclude a taxpayer from using the funds to pay the trust fund 

taxes.”31 When willfulness is founded upon this method, the responsible 

person’s liability under § 6672 is limited to the amount of “available, 

unencumbered funds deposited into [the business’s] bank accounts after [the 

responsible person] became aware that the accrued withholding taxes were 

due.”32

 

27 Barnett, 988 F.2d at 1454 (internal quotation marks and citations omitted).

28 Id. (citations omitted).

29 Id. at 1457 (citations omitted). 30 Id.

31 Id. at 1458 (quoting Honey v. United States, 963 F.2d 1083, 1090 (8th Cir. 1992)).

32 Id. at 1459; see Mazo, 591 F.2d at 1155 (noting that “responsible persons are subject 

to a duty to apply any available unencumbered funds to reduction of accrued withholding tax 

liability”) (citations omitted); see also United States v. Kim, 111 F.3d 1351, 1357 (7th Cir. 

1997) (stating that “[t]he one limitation . . . is that the person is only liable to the extent that 

‘unencumbered funds’ are available or acquired after the time in which that person becomes 

aware”) (citation omitted).

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Willfulness may also be proved by evidence that “the responsible person 

act[ed] with a reckless disregard of a known or obvious risk that trust funds 

[would] not be remitted to the Government.”33 A responsible person, for 

example, acts with reckless disregard “by failing to investigate or to correct 

mismanagement after being notified that withholding taxes have not been duly 

remitted.”34

C.

On appeal, McClendon reasserts the argument he raised in his motion 

for reconsideration. He argues that the district court, at most, could have 

granted summary judgment in the amount of $100,000 because that was the 

amount of available, unencumbered funds paid to non-IRS creditors after he 

became aware of the unpaid taxes. Although McClendon also reasserts his 

contention that his $100,000 loan to FPA was encumbered because its use was 

restricted to the May 2009 payroll, McClendon fails to challenge the district 

court’s reasons, which we find persuasive, for concluding that the funds were 

not encumbered under the jurisprudence interpreting § 6672. Because 

McClendon fails to identify any error in the district court’s legal analysis on 

this issue, it “is the same as if he had not appealed that [part of the] 

judgment.”35 Accordingly, we affirm the district court’s determination that 

McClendon’s $100,000 loan was unencumbered for purposes of § 6672 liability.

However, we vacate the remainder of the summary judgment because there is

a genuine issue of material fact as to whether FPA had $4.3 million in 

available, unencumbered funds after McClendon learned of the unpaid taxes.

As detailed above, in moving for summary judgment, the Government

submitted certified copies of the IRS’s § 6672 assessments against McClendon 

 

33 Mazo, 591 F.2d at 1155 (citations omitted). 34 Id. (citations omitted).

35 Brinkmann v. Dallas County Deputy Abner, 813 F.2d 744, 748 (5th Cir. 1987).

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for all twenty-one quarters at issue, which amounted to approximately $4.3 

million. The burden of proof then shifted to McClendon to come forward with 

competent summary judgment evidence establishing an issue of material fact 

warranting trial36 regarding whether he was a responsible person or acted 

willfully under § 6672.37 A responsible person’s liability under § 6672 is limited 

to the amount of “available, unencumbered funds deposited into [the 

business’s] bank accounts after [the responsible person] became aware that the 

accrued withholding taxes were due.”38 Although the jurisprudence is unclear 

whether this liability limitation constitutes an affirmative defense, it comes 

into play under the willfulness inquiry and, thus, is part of the taxpayer’s 

burden of proof.

McClendon testified in his deposition and in his affidavit that, as soon as 

the board of directors of FPA discovered that the payroll taxes were unpaid, 

FPA stopped paying its creditors and vendors. He testified that, to avoid using 

any of FPA’s existing or future funds, and to ensure that FPA’s staff employees 

received their payroll checks in May 2009, he and his wife loaned FPA 

$100,000.39 He further testified that FPA remitted all existing receivables and 

any new receivables it subsequently received directly to the IRS. McClendon

additionally testified that the amount of receivables FPA paid the IRS totaled 

over $400,000, and that FPA also turned over to the IRS $250,000 in insurance 

proceeds it received on the insurance claim it filed for employee theft.40 In 

 

36 In re La. Crawfish Producers, 852 F.3d at 462.

37 Barnett, 988 F.2d at 1453.

38 Id. at 1459.

39 In addition, McClendon and his two fellow board members created a separate 

company, MST Interests, L.L.C., to use their own personal funds to pay FPA’s non-IRS 

creditors. Whether such funds should be considered as part of FPA’s available, unencumbered

funds was not addressed by the district court.

40 FPA also issued a check for $2,000 to its 401(k) plan manager (John Hancock 

Insurance Company) and a check for $1,840.42 to Dr. James Trippett. McClendon contended 

that these funds did not belong to FPA, but related to FPA’s 401(k) plan and were erroneously 

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addition to his affidavit and his deposition testimony, McClendon submitted 

copies of checks made out to the IRS for $161,634.77 dated July 31, 2009, and

for $134,880.1141 dated February 8, 2010, totaling $296,514.88, which was just 

under the closing balance of $296,772.28 available in FPA’s account at the end 

of July 2009. McClendon also submitted a copy of a check payable to the IRS

for $274,749.31 dated August 10, 2010.

The district court’s decision indicates that it believed that McClendon 

was required to provide an “accounting for Family Practice’s funds” in order to 

satisfy his burden on summary judgment. A recent decision from the Eleventh 

Circuit, United States v. Stein,42 is on point. In that case, the court held that, 

even in a tax case where the Government’s tax assessments are presumptively 

correct, the standard summary judgment rules set forth in Rule 56 apply.43

Specifically, the court held that a taxpayer’s self-serving and uncorroborated, 

but not conclusory, statements in an affidavit or deposition can create an issue 

of material fact with respect to the correctness of the Government’s 

assessments.44 The court further held that if there is any corroboration 

requirement for a taxpayer’s self-serving testimony, it must come from a source 

other than Rule 56.45

We can find no such corroboration requirement under § 6672. Although, 

as the Government acknowledged during oral argument, § 6672 provides for a 

harsh remedy against taxpayers such as McClendon, who was just as much a 

victim of Stephen’s criminality as the Government, the statute does not 

 

deposited into FPA’s account. Whether these funds should be considered as part of FPA’s 

available, unencumbered funds was also not addressed by the district court.

41 The amount of this check was just under the closing balance of $137,314.88 

available in FPA’s account at the end of August 2009.

42 881 F.3d 853 (11th Cir. 2018).

43 Id. at 856-57.

44 Id.

45 Id. at 858.

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supplant the evidentiary burdens applicable in a summary judgment 

proceeding. We conclude that McClendon came forward with competent 

summary judgment evidence establishing an issue of material fact warranting 

trial regarding whether the amount of available, unencumbered funds was 

sufficient to cover FPA’s tax obligation. Therefore, the district court’s summary 

judgment imposing over $4.3 million in penalties must be vacated.

The Government asserts that this Court may affirm the district court’s 

summary judgment on an alternative basis. It contends that it is entitled to 

summary judgment on its claim that McClendon evidenced willfulness through 

“reckless disregard of a known or obvious risk that trust funds may not be 

remitted to the Government.” However, the district court did not reach the 

merits of this argument in granting summary judgment. The district court 

should have an opportunity to consider the merits of the Government’s reckless 

disregard argument in the first instance, and it will have that opportunity 

upon remand.

For the foregoing reasons, we REVERSE the denial of the motion for 

reconsideration, AFFIRM IN PART and VACATE IN PART the summary 

judgment, and REMAND the case for further proceedings consistent with this 

opinion.

 Case: 17-20174 Document: 00514513428 Page: 16 Date Filed: 06/14/2018
No. 17-20174

17

EDITH H. JONES, Circuit Judge, concurring:

I am pleased to concur in Judge Davis’s opinion. I add two observations. 

First, I don’t see how, under the circumstances before us, the district court

could rule on now-deceased Dr. McClendon’s “reckless” disregard of his tax 

duties as a matter of law. Given that he and his partners employed Stephen 

for a decade before the CPA started embezzling, their reliance on his handling

of their business affairs seems at least plausible. Second, it takes some 

chutzpah for the IRS, which submitted 285 pages of exhibits including FPA 

business records in support of summary judgment, now to assert McClendon 

did not bear “his” burden to articulate precisely how those records 

demonstrated whether there were insufficient funds to cover the unpaid 

withholding taxes and whether all available receipts were in fact paid to the 

IRS. Is it too much to assume the tax collectors can read bank and financial 

records adeptly, and that ethically, they wouldn’t make claims without factual 

foundations of which they ought to be aware? To challenge the legal 

consequences of McClendon’s $100,000 cash infusion is one thing; to claim, in 

the face of his sworn affidavit and documents, and their own access to 

corroborative financial records, that this isn’t enough to raise a fact issue is 

irresponsible at best.

 Case: 17-20174 Document: 00514513428 Page: 17 Date Filed: 06/14/2018
No. 17-20174

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STEPHEN A. HIGGINSON, Circuit Judge, dissenting:

I fail to see how the majority opinion’s analysis justifies its chosen 

disposition of the appeal. The majority opinion affirms the primary legal 

ground the district court gave for granting summary judgment in the 

Government’s favor, and takes no issue with the district court’s (correct) 

alternative holding. Compare McClendon v. United States, No. 4:15-cv-2664, 

2016 WL 6804864, at *3–4 (S.D. Tex. Nov. 17, 2016), with ante at 13. But the 

majority nonetheless “vacates” the grant of summary judgment because of an 

argument the majority agrees McClendon never raised in the original 

summary judgment briefing. See ante at 4–5, 13–15. “Although on summary 

judgment the record is reviewed de novo, this court, for obvious reasons, will 

not consider evidence or arguments that were not presented to the district 

court for its consideration in ruling on the motion.” Skotak v. Tenneco Resins, 

Inc., 953 F.2d 909, 915 (5th Cir. 1992). Because I would not require the district 

court to anticipate and construct arguments on the nonmovant’s behalf, I 

would affirm the district court’s grant of summary judgment on the legally 

correct grounds stated in that order.

The majority opinion also “reverses” the district court’s order denying 

reconsideration, apparently because that order applied the wrong legal 

standard. Ante at 9–10, 16. I agree that under Austin v. Kroger Texas, L.P., 864 

F.3d 326, 336–38 (5th Cir. 2017), the district court erred in relying on Rule 

59(e). But I would administer the remedy dictated by Austin—that is, 

“vacate . . . and remand for the district court to reconsider [the] motion for 

reconsideration under the more flexible Rule 54(b),” giving the district court 

“discretion” to consider late-raised arguments (or not) based on the equities of 

the situation. Id. at 337. To the extent that the majority opinion is requiring

the district court to consider the late-raised argument, the majority opinion 

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No. 17-20174

19

vitiates the district court’s inherent discretion under Rule 54(b) “to reconsider 

and reverse its decision for any reason it deems sufficient,” id. at 336 (emphasis 

added), and prevents the district court from enforcing its own deadlines for 

filing and opposing motions. 

I would affirm the district court’s grant of summary judgment, vacate 

the district court’s denial of reconsideration, and remand for the district court 

to apply the correct Rule 54(b) standard. Because the majority takes a different 

path, I respectfully dissent.

 Case: 17-20174 Document: 00514513428 Page: 19 Date Filed: 06/14/2018