Court Opinion

ID: 5833686
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:32:13.550082+00
Date Added: 2024-06-11T08:43:31.775814
License: Public Domain

Mikoll and Herlihy, JJ.,
dissent and vote to annul in separate memoranda as follows: Mikoll, J. (dissenting). I respectfully dissent. An examination of the record reveals that petitioner did not sign any corporate tax returns, kept no payroll records nor time sheets, owned no stock in the corporation, contributed no capital to the corporation and did not hold himself out to be an officer of the corporation. Petitioner was listed by his son on a letterhead on a 1965 corporate tax return and on an application for a corporate bank account as treasurer of the corporation. However, petitioner did not sign any of these documents, nor was it shown that he knew of the acts of his son in so listing him. The proof was that petitioner was authorized to sign checks for the purpose of seeing that the men were paid on time in the event his son, the owner of the corporation, was not available. Donald MacLean testified that petitioner never had anything to do with the fiscal operation of the business. It was a one-man operation and Donald ran it. "A 'responsible person’ has been defined as one who has the final word as to what bills should or should not be paid. Or, in more general terms, a 'responsible’ person is one who is so connected with the business as to exercise full authority over financial affairs, and therefore to be ultimately responsible for the decision as to payment of the tax.” (Koegel v United States, 437 F Supp 176, 180.) The evidence before the Tax Commission does not lead to the conclusion that petitioner is a "responsible person” as defined in Federal case law (Adams v United States, 504 F2d 73, 75; Burack *953v United States, 461 F2d 1282, 1291; Dudley v United States, 428 F2d 1196, 1201; White v United States, 372 F2d 513). While petitioner did some limited hiring and had authority to sign pay checks in the absence of his son, there was no probative evidence that petitioner had the requisite actual authority over the financial affairs of the corporation. The acts of his son in designating him treasurer without his consent and knowledge are not his acts. The hiring done by petitioner was but the exercise of his duties as a supervisory employee. That there was similarity in the amount paid each individual is equivocal, especially in view of the expertise of petitioner in the stone erection business. The fact that petitioner was an incorporator is of no significance since it gives no indication of the extent, if any, of his interest in the new corporate business. The law then in existence required three persons to incorporate even though only one had sole ownership of the business. Upon the evidence in this record, it appears that the conclusions of the Tax Commission are not based on reasonable inferences drawn from proven facts but on suspicion, surmise and conjecture. The determination of the Tax Commission, therefore, is unreasonable and irrational and should be annulled.