Opinion ID: 530302
Heading Depth: 1
Heading Rank: 4

Heading: R.S. v. Blais, 612 F.Supp. 700, 710 (Mass.Dist.Ct.1985).

Text: 35 Under these principles, the district court was correct in ruling as a matter of law that Thomsen willfully failed to pay over the withheld taxes. As already noted, neither the original delegation to Shortell, while C & K was still operating, of the responsibility to pay the taxes, nor the later delegation to Shortell after the company had ceased operations, to collect the receivables and pay the taxes from out of the monies collected, relieved Thomsen of his status as a responsible person. The only question, then, is whether these same delegations could allow a jury to find properly that Thomsen's failure to pay over the taxes was non-willful. We do not think so. Once a responsible person has had clear notice that the person to whom he has delegated responsibility for paying the taxes has wrongfully failed to pay them in the past, he continues to delegate that responsibility only at his peril. Should the responsible person continue to delegate, without taking appropriate measures to assure that the delegated person will not repeat the dereliction in the future, the subsequent willfulness of the delegatee in once more failing to pay the taxes will be imputed to the responsible person. As one court has stated, 36 [O]nce [the responsible person was] aware of the liability to the government, [he was] under a duty to ensure that the taxes were paid [emphasis added] before any payments were made to other creditors. If, after receiving actual notice, corporate officials could once again delegate their responsibility to subordinates, then repeated escape from liability would be possible and the government would be required to monitor corporate affairs daily. The statutory concept of willfulness conveys no such meaning. 37 Mazo v. United States, 591 F.2d 1151, 1157 (5th Cir.), cert. denied, 444 U.S. 842, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979). 38 In the present case, Thomsen delegated to Shortell a second time, with full knowledge of the latter's previous irresponsible failure to pay the taxes when due. Shortell responded by disbursing virtually all remaining company funds to other creditors. That Thomsen had, in his own eyes, terminated his relationship with the business, is not determinative. He could not absolve himself of all responsibility for seeing that the taxes were paid to the government under section 6672. It is immaterial, moreover, that Thomsen lacked subjective bad intent. Once on notice that Shortell had failed to pay the taxes, not to mention that Shortell had been mismanaging the company and lying by misrepresenting the well-being of the company, Thomsen was grossly negligent in continuing to leave to Shortell, without appropriate supervision, the liquidation of assets and the payment of taxes therefrom. In such circumstances, Shortell's willfulness was properly imputed to Thomsen. 1 39 A jury question would, of course, arise if there were a genuinely disputed issue of fact as to whether Thomsen was actually on notice that the person to whom he delegated responsibility for collecting, accounting for, and paying over the taxes had failed to fulfill that responsibility in the past. In the present case, however, it is uncontested that Thomsen learned on January 5, 1985 that Shortell had failed to pay the withholding taxes for the past three quarters. He learned at the same time, of course, of Shortell's mismanagement of the business and of the fact that Shortell had been misrepresenting to him the true state of affairs of the business. Uncontested likewise is the fact that he thereafter delegated to Shortell the responsibility for collecting the accounts receivable and paying the taxes from monies collected. Consequently, there is no question of fact for the jury, and the district court acted properly in directing a verdict for the government on the two issues of responsibility and willfulness. 40 The judgment of the district court is therefore affirmed.