IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

TONYA G. WHIGHAM, )

Plaintiff, )

)

v. ) CIVIL ACTION NO. 15-00251-KD-C

)

UNITED STATES OF AMERICA, )

Defendant/Third-Party Plaintiff )

)

v. )

)

LYNN E. FOWLER, )

Third-Party Defendant )

ORDER

This matter is before the Court on Defendant’s Rule 55(b) Motion for Entry of Default 

Judgment against Third-Party Defendant Lynn E. Fowler (Doc. 19). Plaintiff seeks default 

judgment against Fowler as she has failed to plead, answer or otherwise defend in this case. 

I. Background

This litigation concerns a dispute over the liability of Plaintiff Tonya G. Whigham 

(Whigham) and Third-Party Defendant Lynn E. Fowler (Fowler), for Trust Fund Recovery 

Penalties assessed against them pursuant to 26 U.S.C. § 6672. Specifically, on May 13, 2015, 

Whigham initiated this litigation against Defendant the United States of America (Defendant) for 

the recovery of $13,483.14 in tax penalties plus interest. Whigham alleges that tax penalties 

were erroneously and illegally assessed and collected from her as part of Defendant’s claim that 

she failed to pay employment taxes withheld from the wages employees of Creative 

Management Solutions, Inc. (Creative Management) – a company owned by Fowler and where 

she was employed. (Doc. 1). On July 16, 2015, Defendant answered Whigham’s complaint, 

denied her entitlement to a refund, and asserted a 26 U.S.C. § 6672 counterclaim against her for 

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the unpaid balance on the trust fund recovery penalties assessed (she had already paid a portion 

of the penalties). (Doc. 8). 

On July 23, 2015, Defendant filed a third-party complaint against Fowler pursuant to 26 

U.S.C. § 6672 for trust fund recovery penalties (Count I) and indemnification (Count II), related 

to her alleged failure to collect and pay employment and income taxes that were withheld from 

Creative Management employees during certain tax years (2007-2008). (Doc. 10). Defendant 

alleges that Fowler was “the responsible person/officer” as she was President of Creative 

Management, held signatory authority over the bank accounts, authority to guarantee or co-sign 

loans, determined financial policies of the company, and directed/authorized payments to 

creditors and employees. (Id.; Doc. 19-1 (Decltn. Salter)1). Defendant contends that on 

March 15, 2010, a letter was sent to Fowler at her last known address proposing to assess Trust 

Fund Recovery Penalties against her equal to the amounts of taxes not paid for the tax periods at 

issue. (Id.) Fowler did not respond to this letter within the allotted time. (Id.) On July 5, 

2010, Trust Fund Recovery Penalties were assessed against Fowler for the following tax periods:

TAX PERIOD ENDING

AMOUNT OF § 6672

ASSESSMENT

June 30, 2007 $29,531.54

December 31, 2007 $16,572.99

March 31, 2008 $13,151.10

June 30, 2008 $14,754.59

September 30, 2008 $11,337.01

December 31, 2008 $11,248.90

(Id.; Doc. 19-2). Defendant asserts that Fowler received notice of the assessment and a demand 

for payment. (Doc. 10; Doc. 19-1 (Decltn. Salter)). Fowler did not pay the balance due. 

(Id.) To date, Fowler has not paid the balance due and interest has accumulated on the penalties

 1 IRS Advisor.

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since the assessment date. (Id.) Defendant asserts that as of November 20, 2015, Fowler owes 

$96,928.80 plus interest which is continuing to accrue. (Id.)

Defendant further alleges that Fowler is jointly and severally liable with Plaintiff 

Whigham, for the income and employment taxes withheld from the wages of Creative 

Management employees but not paid to the United States during the relevant tax periods. From 

this, Defendant asserts that if it is found liable to Plaintiff in the amount of $13,483.14, then 

Fowler shall indemnify and be liable to the United States for that amount.

On August 6, 2015, Fowler was personally served with a copy of the summons and the 

Third-Party Complaint. (Doc. 14). On September 1, 2015, the Government moved for entry 

of a Clerk’s Rule 55(a) Default against Fowler for her failure to plead or otherwise defend, as 

Fowler had failed to answer, appear, or otherwise respond.

2

 (Doc. 15). On October 6, 2015, 

the Clerk entered a Rule 55(a) Default against Fowler. (Doc. 17). Defendant now moves for 

entry of a Rule 55(b) default judgment against Fowler for failure to appear or defend in this case.

II. Standard of Review

The Federal Rules of Civil Procedure establish a two-part process for obtaining a default 

judgment. Fed.R.Civ.P. 55. If “a party against whom a judgment for affirmative relief is 

sought has failed to plead or otherwise defend, and that failure is shown by affidavit or

otherwise, the clerk must enter the party’s default.” Fed.R.Civ.P. 55(a). After default has 

been entered, if the “claim is for a sum certain or a sum that can be made certain by 

computation” the clerk must enter default judgment. Fed.R.Civ.P. 55(b)(1). In all other 

circumstances, such as here, “the party must apply to the court for a default judgment.” 

Fed.R.Civ.P. 55(b)(2). 

 2 Indicating on the certificate of service that a copy of the application for default was sent to Fowler. 

(Doc. 15 at 3). 

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Rule 55(b)(2) of the Federal Rules of Civil Procedure provides, in relevant part, as 

follows with regard to entering a default judgment:

(b) Entering a Default Judgment.

* * *

(2) By the Court. In all other cases, the party must apply to the court for a default 

judgment. A default judgment may be entered against a minor or incompetent 

person only if represented by a general guardian, conservator, or other like 

fiduciary who has appeared. If the party against whom a default judgment is 

sought has appeared personally or by a representative, that party or its 

representative must be served with written notice of the application at least 7 days 

before the hearing. The court may conduct hearings or make referrals--preserving 

any federal statutory right to a jury trial--when, to enter or effectuate judgment, it 

needs to:

(A) conduct an accounting;

(B) determine the amount of damages;

(C) establish the truth of any allegation by evidence; or

(D) investigate any other matter.

FED.R.CIV.P. 55(b)(2).

The Eleventh Circuit has held that although “a default is not treated as an absolute 

confession by the defendant of his liability and of the plaintiff's right to recover, a defaulted 

defendant is deemed to admit the plaintiff's well-pleaded allegations of fact. The defendant, 

however, is not held to admit facts that are not well-pleaded or to admit conclusions of law.”

Tyco Fire & Sec., LLC v. Alcocer, 218 Fed. Appx. 860, 863 (11th Cir. 2007) (per curiam) 

(citations and internal quotations omitted). Moreover, “before entering a default judgment for 

damages, the district court must ensure that the well-pleaded allegations of the complaint ... 

actually state a cause of action and that there is a substantive, sufficient basis in the pleadings for 

the particular relief sought.” Id. (emphasis omitted). Therefore, Plaintiff must establish a 

“prima facie liability case” against the defendants. Pitts ex rel. Pitts v. Seneca Sports, Inc., 321 

F. Supp. 2d 1353, 1357 (S.D. Ga. 2004) (citations omitted). Further, when assessing damages, 

the Court has “an obligation to assure that there is a legitimate basis for any damage award it 

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enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003). Overall, “there 

is a strong policy of determining cases on their merits” and therefore defaults are viewed “with 

disfavor.” In re Worldwide Web Sys., Inc., 328 F.3d 1291, 1295 (11th Cir. 2003). “Since this 

case involves a default judgment there must be strict compliance with the legal prerequisites 

establishing the court's power to render the judgment.” Varnes v. Local 91, Glass Bottle 

Blowers Ass'n of U.S. and Canada, 674 F.2d 1365, 1369 (11th Cir. 1982). Finally, “allegations 

relating to the amount of damages are not admitted by virtue of default. Rather, the Court 

determines the amount and character of damages to be awarded.” Miller v. Paradise of Port 

Richey, Inc., 75 F.Supp.2d 1342, 1346 (M.D. Fla. 1999).

III. Discussion

A. Liability

At the outset, the Court is satisfied that Fowler has received notice of the default 

proceedings against it. Additionally, a Clerk’s entry of default was issued against Fowler in 

accordance with Rule 55(a) for failure to plead, answer or otherwise defend this case. 

Moreover, a hearing is not necessary because Defendant seeks a sum certain which can be made 

ascertainable from the pleadings, submitted documents, and allegations of the third-party 

complaint. Securities and Exchange Commission v. Smyth, 420 F.3d 1225, 1231-1232 (11th

Cir. 2005) (“Judgment of default awarding cash damages could not properly be entered without a 

hearing unless the amount claimed is a liquidated sum or one capable of mathematical 

calculation) (internal quotes and citations omitted); Id. at n.13 (noting that an “evidentiary 

hearing is not a per se requirement; indeed, Rule 55(b)(2) speaks of evidentiary hearings in a 

permissive tone....We have held that no such hearing is required where all essential evidence is 

already of record[]”).

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As to the merits of Defendant’s third-party complaint, a court may enter a default 

judgment only if the factual allegations of the complaint, which are assumed to be true, provide a 

sufficient legal basis for such entry. Nishimatsu Const. Co. v. Houston Nat'l Bank, 515 F.2d 

1200, 1206 (5th Cir. 1975)3 (“The defendant is not held to admit facts that are not well-pleaded

or to admit conclusions of law[]”). In considering such a motion, a court must “examine the 

sufficiency of plaintiff's allegations to determine whether the plaintiff is entitled to” a default 

judgment. Fidelity & Deposit Co. v. Williams, 699 F. Supp. 897, 899 (N.D. Ga. 1988). 

In its third-party complaint, Defendant alleges claims for trust fund recovery penalties 

and indemnification against Fowler based on her status as a responsible officer/person4 of 

Creative Management. The Court is satisfied that the well-pleaded allegations of the third-party 

complaint state a basis for relief as to the 26 U.S.C. § 6672 trust fund recovery penalty claim

asserted and that there is a substantive, sufficient basis for the relief Defendant seeks as to that

claim -- but not as to the indemnification claim. 

1. Trust Fund Recovery Penalties

Responsible officers of a business are thus required to withhold federal taxes from 

employees’ wages and remit the amounts withheld to the United States. 26 U.S.C. §§ 3102(a), 

3402(a). These withheld taxes constitute a special fund held in trust for the benefit of the 

United States -- a trust fund. 26 U.S.C. § 7501(a); Slodov v. United States, 436 U.S. 238,

 3 In Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1207 (11th Cir.1981) (en banc), the Eleventh Circuit 

adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.

4 A responsible person is anyone “required to collect, truthfully account for, and pay over” trust fund taxes 

to the United States, including the officers or employees of a corporation who are under a duty to do so. 26 U.S.C. 

§§ 6672(a), 6671(b). “[C]ourts have generally taken a broad view of who constitutes a responsible person.” Smith v. 

United States, 894 F.2d 1549, 1553 (11th Cir. 1990). Indicia of responsibility include: status as an officer, director, 

or controlling shareholder of the corporation; authority to draw or sign checks on the corporation’s bank account, 

even if shared with another; and the ability to direct the corporation’s financial affairs, including the day-to-day 

management decisions and the ability to hire and fire employees. Id.; Thibodeau v. United States, 828 F.2d 1499, 

1503-1505 (11th Cir. 1987). It is well established that more than one person may be a “responsible person,” and the 

existence of another responsible person will not relieve the first from liability for the penalty. Roth v. United States, 

779 F.2d 1567, 1571-72 (11th Cir. 1986); Hornsby v. IRS, 588 F.2d 952, 954 (5th Cir. 1979).

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242-245 (1978). If an employer fails to pay such trust fund taxes to the United States, the 

Government cannot seek to collect that money from the employees, Id. at 243, but must pursue 

the persons responsible and recover the amounts lost by assessing a penalty against them 

pursuant to Section 6672(a) of the Internal Revenue Code – the Trust Fund Recovery Penalty. 

The purpose of this penalty “is simply to provide a remedy to prevent the unnecessary loss of tax 

funds.” Liddon v. United States, 448 F.2d 509, 512 (5th Cir. 1971). 

Section 6672 of the Internal Revenue Code provides, in relevant part, that:

 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...

26 U.S.C. § 6672(a). “Person” is defined to include “an officer or employee of a corporation, 

or a member or employee of a partnership, who as such officer, employee, or member is under a 

duty to perform the act in respect of which the violation occurs.” 26 U.S.C. § 6671(b). 

As specified in Brown v. US, 439 Fed. 772, 776 (11th Cir. 2011) (footnotes omitted):

Under 26 U.S.C. § 6672, “the officers or employees of the employer responsible for 

effectuating the collection and payment of trust-fund taxes who willfully fail to do so are 

made personally liable [for] a ‘penalty’ equal to the amount of the delinquent taxes.” 

Slodov, 436 U.S. at 244–45...The test for liability under § 6672(a) has two elements: “(1) 

a responsible person (2) who has willfully failed to perform a duty to collect, account for, 

or pay over federal employment taxes.” Thosteson v. United States, 331 F.3d 1294, 1298 

(11th Cir.2003).

A “responsible person” is “an officer or employee of a corporation who is under a duty to 

collect, account for, or pay over the withheld tax.” Thibodeau v. United States, 828 F.2d 

1499, 1503 (11th Cir.1987)....

The willfulness requirement is satisfied “if the responsible person has knowledge of 

payments to other creditors after [s]he becomes aware of the failure to remit the withheld 

taxes.” Thosteson, 331 F.3d at 1300. There is no requirement that willfulness of the 

responsible person include a fraudulent or other bad motive. Id.

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Id. See 26 U.S.C. § 6672(a); Smith v. United States, 894 F.2d 1549, 1553 (11th Cir. 1990).

The well-pleaded allegations of the third-party complaint support entry of default 

judgment against Fowler on the trust recovery penalties claim. To establish a prima facie case 

for trust recovery penalties Defendant must: 1) prove the existence of a valid assessment against 

Fowler and 2) establish that she possessed the indicia of a responsible person for purposes of the 

Trust Fund Recovery Penalty. The burden then shifts to Fowler to prove a lack of willfulness in 

failing to pay the trust fund taxes. Mazo v. United States, 591 F.2d 1151, 1155 (5th Cir. 1979).

First, as to the validity of the Defendant’s tax assessments, “[o]rdinarily, the 

Commissioner’s determination of tax liability is presumed correct.” Feldman v. C.I.R., 20 F.3d 

1128, 1132 (11th Cir. 1994) (citing Welch v. Helvering, 290 U.S. 111, 115 (1933)). See also

J.&O. Altschul Tobacco Co. v. C.I.R., 42 F.2d 609, 610 (5th Cir. 1930). “There is a 

presumption that a federal tax assessment issued by the IRS is valid. United States v. Chila, 871 

F.2d 1015,1017–18 (11th Cir.1989) (finding that certified documents presented by the United 

States in support of the assessment provided the necessary statutory and regulatory 

information—“identification of the taxpayer, the character of the liability assesses, the taxable 

period, and the date and amount of the assessment.” United States v. Hall, 2013 WL 6844099, 

*8 (S.D. Ala. Dec. 30, 2013). Thus, the taxpayer bears the burden of proving the determination 

erroneous or arbitrary. Welch, 290 U.S. at 115. 

The Government has submitted a certified record of the assessments and the balance 

owed to support the validity of the assessments. The Court may rely on the Certificate of 

Assessments, Payments and Other Specified Matters Certificate of Assessments, Payments and 

Other Specified Matters (Doc. 19-2), to conclude that valid assessments were made against 

Fowler. Chila, 871 F.2d at 1017-1018. See also Olster v. Commissioner of Internal Revenue 

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Service, 751 F.2d 1168, 1174 (11th Cir. 1985) (“Absent a finding that the computational methods 

used, and therefore the assessment, was arbitrary and without foundation, the tax deficiency is 

presumptively correct.”) (citations omitted). The Court may also rely on the sworn declaration 

of V. Salter (Doc. 19-1 (Decltn. Salter)), to conclude that a balance remains due. Hall, 2013 WL 

6844099, *8; (Doc. 19-1 (Decltn. Salter); Doc. 19-3). Fowler has not appeared in this case and 

has not submitted any contradictory evidence. Upon consideration, the Court finds that 

Defendant has proven the existence of a valid assessment against Fowler.

As to the second element – whether Fowler possessed the indicia of a responsible person 

-- the IRS investigated and determined that she was a person responsible to pay trust fund taxes 

to the United States. (Doc. 19-1 (Decltn. Salter)). The Court finds that Fowler possesses 

certain indicia of responsibility. “A person is responsible within the meaning of § 6672 if she 

has a duty to collect, account for, or pay over taxes withheld from the wages of a company's 

employees[]” and “indicia of responsibility includes ‘the holding of corporate office, control 

over financial affairs, the authority to disburse corporate funds, stock ownership, and the ability 

to hire and fire employees.’” Brown, 769 F. Supp.2d at 1360-1361 (internal citations omitted). 

Based on the evidence submitted, during the tax periods at issue, Fowler was the President of 

Creative Management Solutions, she held signatory authority over the corporation’s bank 

accounts, and she had the ability to direct the corporation’s financial affairs, including by 

guaranteeing or co-signing loans. Additionally, the Court may rely on the well-pleaded facts of

the third-party complaint, deemed admitted, and the sworn declaration of Salter (Doc. 19-1 

(Decltn. Salter)), to conclude that Fowler possessed sufficient indicia of responsibility to be 

considered a responsible person under Section 6672. Further, Fowler has not appeared in this 

case and thus has not submitted any contradictory evidence. 

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Having satisfied these two elements, the question is whether Fowler acted willfully. As 

explained in Brown, 769 F.Supp.2d at 1361 (internal citations omitted): “‘willfully’ does not 

require proof of criminal intent; it simply means ‘a voluntary, conscious, and intentional act, 

such as the payment of other creditors in preference to the United States.’...The responsible 

person acts willfully if she does not use her authority to make sure the funds are deposited and 

paid to the IRS rather than permitting the tax money to be paid to other creditors....Smith v. 

United States, 894 F.2d 1549, 1553 (11th Cir.1990) (‘The willfulness requirement of section 

6672 is satisfied if there is evidence that the responsible officer had knowledge of payments to 

other creditors after he was aware of the failure to remit withholding taxes.’).” 5 After

determining that Fowler was a person responsible to pay trust fund taxes to the Government, the 

IRS concluded that her repeated failures to do so were willful. (Doc. 19-1 (Decltn. Salter)). 

As a result, a delegate of the Secretary of the Treasury then assessed Trust Fund Recovery 

Penalties against her on July 5, 2010 for the tax periods at issue. (Id.) Fowler has not 

appeared in this case and has not submitted any contradictory evidence or rebutted the IRS’ 

determination. As such, upon consideration of the well-pleaded allegations of the third-party 

complaint and the evidence submitted, the record supports a finding that Fowler acted willfully.

Based on the foregoing, Defendant’s motion is due to be GRANTED as to this claim.

2. Indemnification

Defendant has wholly failed to brief its indemnification claim or provide any support for 

same. Instead, Defendant simply states in its prayer for relief that it moves for entry of default 

 

5 A willful act is a voluntary, conscious, and intentional act, including one taken “with a reckless disregard 

of a known or obvious risk that trust funds may not be remitted to the Government.” Mazo v. United States, 591 

F.2d 1151, 1155 (5th Cir. 1979). For instance, it will suffice if the responsible officer intentionally preferred other 

creditors over the United States by making payments to them while knowing trust fund taxes were owed. Smith,

894 F.2d at 1553. It is no defense to show that a responsible officer merely “rubber-stamped” another’s decision.

Thosteson v. United States, 331 F.3d 1294, 1300 (11th Cir. 2003). The law requires personal fault, but not 

fraudulent intent, by the responsible person. Hewitt v. United States, 377 F.2d 921, 924 (5th Cir. 1967).

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judgment against Fowler “in the amount of any judgment against the United States and in favor 

of the Plaintiff...Whigham, on her claim for refund in this case.” (Doc. 19 at 9). Defendant 

has failed to provide any support for its indemnification claim such that the Court is unable to 

sufficiently assess Defendant’s motion for a default judgment against Fowler on that claim. 

B. Damages

Plaintiff requests entry of a default judgment against Fowler in the amount of $96,928.80 

plus interest which continues to accrue. Upon review of the exhibits submitted in support of the 

motion, the Court is satisfied that the amount requested are due and owing to Defendant by 

Fowler. As such, that portion of Defendant’s motion for entry of default judgment damages, 

relative to Defendant’s trust recovery penalties claim, is GRANTED.

IV. Conclusion

Accordingly, it is ORDERED that Defendant’s motion for default judgment against 

Fowler (Doc. 19) is GRANTED in part and DENIED in part as follows: GRANTED as to 

Defendant’s third party claim for trust recovery penalties against Fowler such that Fowler shall 

pay $96,928.80 plus accruing interest to the Defendant United States of America; but DENIED

as to Defendant’s third party claim for indemnification.6

DONE and ORDERED this the 8th day of December 2015.

/s/Kristi K. DuBose 

KRISTI K. DuBOSE

UNITED STATES DISTRICT JUDGE

 6 Defendant has not sought entry of a Rule 54(b) judgment as to Fowler only, and thus, no judgment shall 

issue at this time.

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