Opinion ID: 221252
Heading Depth: 2
Heading Rank: 2

Heading: Conway was a Responsible Person[4]

Text: Conway first claims that he was not a responsible person under § 6672. The Supreme Court has clarified that a responsible person is not limited to persons in a position to perform all three of the enumerated duties with respect to the tax dollars in question. Slodov, 436 U.S. at 250, 98 S.Ct. 1778. Moreover, [t]his circuit takes a broad view of who is a responsible person under § 6672. Logal v. United States, 195 F.3d 229, 232 (5th Cir.1999). We have enumerated six factors to consider in determining whether someone is a responsible person under the statute: whether such a person: (i) is an officer or member of the board of directors; (ii) owns a substantial amount of stock in the company; (iii) manages the day-to-day operations of the business; (iv) has the authority to hire or fire employees; (v) makes decisions as to the disbursement of funds and payment of creditors; and (vi) possesses the authority to sign company checks. Barnett v. IRS, 988 F.2d 1449, 1455 (5th Cir.1993). Each of these factors weighs in favor of finding that Conway was a responsible person for the taxes at issue. The undisputed record shows that Conway was the founder, CEO, president, and chairman of the board of National during the periods in question; he was one of the largest individual stockholders; and he had the most individual authority, including the authority to hire and fire employees and to determine which creditors would get paid. Conway was also authorized to sign checks on each of National's company accounts. No reasonable jury could find that Conway was not a responsible person before National's bankruptcy, so Conway was a responsible person with regard to the pre-petition taxes. Thus, he had an obligation to make sure were collected, paid over and accounted for by November 30, 2000, which was prior to National's December 6 bankruptcy. See Mazo, 591 F.2d at 1154 ([T]he liability of responsible persons generally is not limited to restoring actual cash diverted from the trust; it encompasses the duty to have initially or to collect funds to pay withholding taxes.); Newsome v. United States, 431 F.2d 742, 745 (5th Cir.1970) ([L]iability under section 6672 can also be premised upon use of withheld funds for other corporate purposes before the date for the corporation to pay over the funds.(emphasis added)).
Furthermore, bankruptcy did not change Conway's status as a responsible person with regard to the post-petition taxes. Notably, Conway acknowledges that during the bankruptcy, National continued to pay over the majority of its excise taxes without needing approval of the bankruptcy court and concedes that those excise taxes were paid in the normal course of business. [5] We conclude that the district court did not err in finding that Conway was a responsible person under § 6672 for all periods at issue.