Opinion ID: 581460
Heading Depth: 3
Heading Rank: 1

Heading: Definition of Willfulness

Text: 20 Willfulness, within the meaning of section 6672, has been defined as a  'voluntary, conscious and intentional act to prefer other creditors over the United States.'  Klotz v. United States, 602 F.2d 920, 923 (9th Cir.1979) (quoting Sorenson v. United States, 521 F.2d 325, 328 (9th Cir.1975)); see also Maggy, 560 F.2d at 1375; Teel v. United States, 529 F.2d 903, 905 (9th Cir.1976). An intent to defraud the government or other bad motive need not be proven. Klotz, 602 F.2d at 923. In fact, conduct motivated by a reasonable cause may nonetheless be willful. Barnett v. United States, 594 F.2d 219, 221 (9th Cir.1979). 21 Davis's deliberate decision to use corporate revenues received after July 1982 (when Davis first became aware of the delinquency) to pay commercial creditors rather than to diminish ITAC's tax debt falls within the literal terms of this Circuit's definition of willfulness. The payments were a voluntary, conscious and intentional act to prefer other creditors over the United States. Klotz, 602 F.2d at 923 (quotation omitted). Indeed, Davis admits that ITAC received sufficient income to satisfy in full its tax delinquency had those funds not been diverted to satisfy other corporate debts.