Court Opinion

ID: 2641178
Source: CourtListenerOpinion
Date Created: 2013-11-06 01:00:56.726119+00
Date Added: 2024-06-11T13:06:46.711666
License: Public Domain

PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 12-1739

MARY JOHNSON,

                Plaintiff - Appellant,

FORD JOHNSON,

                Counter Defendant - Appellant,

           v.

UNITED STATES OF AMERICA,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt.    Deborah K. Chasanow, Chief District
Judge. (8:09-cv-00787-DKC)

Argued:   September 17, 2013                Decided:   November 5, 2013

Before WILKINSON, DUNCAN, and AGEE, Circuit Judges.

Affirmed by published opinion. Judge Agee wrote the opinion, in
which Judge Wilkinson and Judge Duncan joined.

ARGUED: Diana M. Schobel, DMS LAW, LLC, Frederick, Maryland, for
Appellants.  Gretchen M. Wolfinger, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee.      ON BRIEF: Rod J.
Rosenstein, United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Baltimore, Maryland; Kathryn Keneally, Assistant
Attorney General, Teresa E. McLaughlin, Tax Division, UNITED
STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

                              2
AGEE, Circuit Judge:

     Mary Johnson (“Mrs. Johnson”) brought this suit against the

United      States     seeking     a   refund    of    payments      on   a   federal

withholding tax penalty assessed against her under 26 U.S.C.

§ 6672. 1        The Government counterclaimed against both Mrs. Johnson

and her husband, Ford Johnson (“Mr. Johnson”), individually, to

reduce      to    judgment   the   remaining     balance      of   the    trust   fund

recovery     penalties       assessed   against       them.    The    Johnsons     now

appeal the district court’s grant of summary judgment to the

Government against each of them.                For the reasons that follow,

we affirm the judgment of the district court.

                                          I.

     The following facts are either uncontroverted, taken in the

light most favorable to the Johnsons, or have been admitted by

the Johnsons in their pleadings. 2              In 1969, Mr. Johnson formed a

     1
       The § 6672 assessment was made against Mrs. Johnson for
the following tax quarters ending: December 31, 2001; September
30, 2002; March 31, 2003; June 30, 2003; June 30, 2004;
September 30, 2004; and December 31, 2004. (J.A. 27.)
     2
       When reviewing the district court’s grant of summary
judgment, we construe the facts in the light most favorable to
the Johnsons, the nonmoving party.    Laber v. Harvey, 438 F.3d
404, 415 (4th Cir. 2006) (en banc); see also Bright v. QSP,
Inc., 20 F.3d 1300, 1305 (4th Cir. 1994), cert. denied, 513 U.S.
(1994) (statements in a party’s pleadings are conclusively
binding on that party).

                                          3
non-profit corporation, Koba Institute, Inc. (“Koba Institute”), 3

to perform various government contracts in conjunction with Koba

Associates, Inc. (“Koba Associates”), a for-profit corporation

that he owned and managed.            When Koba Associates failed to pay

its payroll taxes in the mid-1990s, the Internal Revenue Service

(“IRS”)    assessed     trust    fund   recovery   penalties      against   Mr.

Johnson pursuant to 26 U.S.C. § 6672. 4            The outstanding payroll

taxes,    accompanied    by     the   lien   subsequently   imposed    on   Mr.

Johnson for the § 6672 trust fund recovery penalties, ultimately

led Mr. Johnson to close Koba Associates. 5           The presence of the

lien severely limited Mr. Johnson’s ability to obtain credit for

Koba Institute.

     3
        Koba Institute provides residential                 and    educational
services to special needs children in Maryland.
     4
       Section 6672 provides in pertinent part:

            Any person required to collect, truthfully
            account for, and pay over any tax imposed by
            this title [a “responsible person”] who
            willfully fails to . . . 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).
     5
        When the IRS assessed trust fund recovery penalties
against Mr. Johnson for the failure of Koba Associates to pay
its payroll taxes, the IRS considered assessing the same
penalties against Mrs. Johnson but ultimately declined to do so.

                                        4
     This    fiscal   reality   led    Mr.   Johnson   to    approach   Mrs.

Johnson about restructuring Koba Institute so as to facilitate a

continuation    of    their   business.      In   1998,     Koba   Institute

converted to a for-profit corporation under Maryland law, with

Mrs. Johnson as its sole shareholder.         Because Mrs. Johnson “was

not encumbered by a lien” like Mr. Johnson, her status as the

corporation’s owner enabled Koba Institute to enter into leases

and other contracts, as well as obtain lines of credit based on

Mrs. Johnson’s endorsement.      (J.A. 998.)

     As the sole shareholder of Koba Institute, Mrs. Johnson

elected herself as chair of the corporation’s board of directors

in 2001.    The corporation’s bylaws require that the chair of the

board “be elected President of the Institute.”                (J.A. 615.) 6

     6
         The bylaws describe the president’s role as follows:

            The President [who] shall be chairperson of
            the Board of Directors . . . shall preside
            at   all   meetings    of   the Board  and/or
            officers.    [S]he shall review, approve and
            recommend to the Board all proposed projects
            and budgets on an annual basis. [S]he shall
            be authorized to execute . . . legal papers,
            documents and instruments on behalf of the
            Institute.       [S]he    shall have  general
            authority to manage the business and affairs
            of the Institute on a day to day basis,
            subject to and in accordance with the
            directions of the Board of Directors.

(J.A. 617–18.)   The bylaws also authorize the board members to
“approv[e] . . . proposed projects and budgets,” “establish[ ] .
. . banking relations including [the] power to borrow money,”
(Continued)
                                      5
According to the Johnsons, because they had agreed that Mrs.

Johnson would be the primary caregiver of the couple’s children,

Mrs. Johnson “delegated” and “entrusted” her authority in the

corporation to Mr. Johnson, and thereafter elected Mr. Johnson

president     of    Koba    Institute    on    February     20,   2001,

notwithstanding the contrary bylaw requirement.           (See J.A. 16,

478, 480, 1481–82, 1515.)      Mrs. Johnson, in turn, served as the

corporation’s vice president.

     The same day that Mrs. Johnson appointed herself as board

chair, February 20, 2001, Koba Institute’s board of directors—

comprised of the Johnsons and an unrelated corporate secretary—

unanimously approved the following resolution:

            The present holders of the offices of
            President,   Vice-President,      Treasurer   and
            Secretary are authorized to sign checks,
            drafts, instruments, . . . and . . . orders
            for   the   payment    of   money    from   [Koba
            Institute]   accounts,    to    endorse   checks,
            instruments, evidences of indebtedness and
            orders payable, owned or held by [Koba
            Institute],    and   to   .    .   .   sign   any
            application, deposit agreement, signature
            card or other documentation required by the
            Bank   [of   America],    with    the   following
            limitation: . . . that either Ford T.
            Johnson,      Jr.     (President       of     the
            Company/Treasurer) or Mary L. Fogg Johnson
            (Vice-President of the Company/Chairperson)
            may act alone or with any other named
            signatory    to    said     accounts     in   any

and “control and manage[ ] . . . property, including [the] power
to purchase, . . . and dispose of the same.” (J.A. 616–17.)

                                   6
              transactions with the Bank; however, any
              transactions . . . which are not signed by
              either [of them] must be signed by at least
              two of the following people . . . .

(J.A. 612 (emphasis added).)             Koba Institute’s payroll account

expressly     provided    that   Mrs.    Johnson      had    the   power    to   “sign

singularly” on that account.            (J.A. 647, 651, 670; see also J.A.

537–38, 1486–87.)

     Having     “delegated”      her    authority       to   Mr.    Johnson,      Mrs.

Johnson’s     actual     involvement     at    Koba     Institute     was    limited

during the 2001 through 2004 period.                  Nonetheless, she had an

office   at    Koba    Institute   and       received    a    significant        annual

salary ranging from approximately $100,000 to $193,000, as well

as a corporate car and cell phone.                 In addition, the rent for

Mrs. Johnson’s residence, shared with Mr. Johnson, was provided

by Koba Institute. 7

     In the 2001 to 2004 period, Mrs. Johnson only came to work

once per month.         When she did so, she would approve any board

resolutions,     such    as   ratification       of    Mr.    Johnson’s     acts    as

president, or perform tasks in the human resources department.

Thus, while Mrs. Johnson may have given an opinion regarding

     7
       During the same periods, Mr. Johnson received no direct
salary from the corporation, instead having Koba Institute pay
the rent for the couple’s home. In 2001, 2002, and 2004, these
rent payments totaled between $40,000 and $50,000.   (J.A. 468–
69, 473, 556, 594–95.) In 2003, however, Koba Institute did not
make any rent payments on Mr. Johnson’s behalf, and he received
no compensation from the corporation.

                                         7
hiring and firing employees during the relevant time frame, Mr.

Johnson made the ultimate decisions regarding employment.                     (See

J.A. 1508–09, 1608, 1661.)        Indeed, because Mr. Johnson oversaw

the corporation’s day-to-day operations, other employees viewed

him as “the one who decides everything” and went to Mr. Johnson—

rather than Mrs. Johnson—with any questions that arose in the

business, including financial matters such as the payment of

payroll taxes.    (J.A. 1605.)

     When Mr. Johnson was out of the office, he left explicit

instructions     for   Mrs.   Johnson       to   follow      on    Koba   Institute

business,   including     which   checks         to   sign    in    his   absence.

Because of her limited involvement with the corporation’s daily

operations, however, Mrs. Johnson was unaware of “the background

or the context” for these checks and did not feel comfortable

signing any checks that Mr. Johnson had not authorized.                       (J.A.

1576.)   Accordingly, from 2001 through 2004, she never attempted

to write checks that Mr. Johnson had not already approved.

     Near the end of 2004, Mrs. Johnson received a notice from

the IRS that Koba Institute had not paid its payroll taxes for

several quarters from 2001 through 2004.                  Prior to that time,

Mrs. Johnson was unaware that the payroll taxes were unpaid.

Upon receipt of the notice, she had “a serious talk” with Mr.

Johnson and “told him” that the situation was “unacceptable” and

that Koba Institute had “to take steps to make sure that it [did

                                        8
not] happen again.”             (J.A. 1501.)           Mrs. Johnson then fired the

finance director, who had been tasked with making payroll tax

payments, and “directed Mr. Johnson to personally handle all

future      tax   payments      as    of     January       2005.”    (J.A.   17.)       She

“required” Mr. Johnson to provide her with “visual proof” of all

withholding tax payments that Koba Institute subsequently made.

(J.A. 17.)        Additionally, at least with regard to the payroll

account, Mrs. Johnson no longer followed the prior procedure for

check authorization; that is, she no longer required instruction

from Mr. Johnson before writing checks herself from the payroll

account for payment of the taxes.

      Due to Mrs. Johnson’s “revamped oversight of tax payments,”

Koba Institute began remitting its post-2004 payroll taxes to

the   IRS    in   full    and,       generally,       on    time.    (J.A.   17.)      The

corporation       did    not,    however,       pay    the    outstanding     delinquent

payroll      taxes      for   the     2001    through       2004    delinquent      periods

although it continued to pay its other business debts, such as

employee wages and Mrs. Johnson’s compensation.                          Subsequently,

the   IRS     assessed        trust    fund     recovery       penalties     (the    “100%

penalty”) against Mr. and Mrs. Johnson individually, pursuant to

                                               9
26 U.S.C. § 6672. 8           Mrs. Johnson later paid $351.00 toward her

assessed penalty.

        On March 30, 2009, Mrs. Johnson filed suit in the United

States District Court for the District of Maryland seeking a

refund of the penalty she had paid, asserting that the § 6672

assessment against her was erroneous. 9               The Government filed a

counterclaim against both of the Johnsons in order to reduce its

assessments     to    judgment,     seeking   to   recover     the   balance   of

assessments     due,      including    penalties,       interest,    and   costs.

Based upon transcripts of account showing the balances due as of

August 22, 2011, the Government ultimately sought to recover

$304,355.90 from Mrs. Johnson and $240,071.12 from Mr. Johnson.

     The Government filed separate motions for summary judgment

against Mr. and Mrs. Johnson, contending that each was liable

under    §   6672    as   a   “responsible    person”    who   had   “willfully”

failed to pay over the withheld payroll taxes.                  The Government

supported     the     assessments     with    Forms      4340—Certificates     of

Assessments, Payments, and Other Specified Matters, noting that

the assessments on the Forms 4340 were presumptively correct and

that the burden fell on the Johnsons to demonstrate otherwise.

     8
       The § 6672 trust fund recovery penalty is commonly termed
the “100% penalty” by tax practitioners and we use that term
here for the § 6672 penalties assessed.
     9
       Mrs. Johnson initially named the IRS as the defendant in
this action.   The parties subsequently agreed that the proper
defendant was the United States, which was substituted as such.

                                        10
The Government also moved to strike the reports and testimony of

an expert witness the Government anticipated the Johnsons would

rely upon in opposing summary judgment.

       The   Johnsons      jointly      opposed       the      Government’s       motion    to

strike,      and    separately      opposed        the    Government’s        motions      for

summary judgment.           Mr. Johnson also moved for partial summary

judgment against the Government as to him.

       The   district      court    granted         the    Government’s         motions    for

summary      judgment,      denied      Mr.        Johnson’s      motion      for      partial

summary judgment, and denied the Government’s motion to strike

as   moot.         With   respect      to   Mr.      Johnson,      the    district       court

determined that the assessment against him was valid, rejecting

his argument that the assessment was not made within the three-

year   limitations        period     established          by     I.R.C.   §     6501.      The

district court then concluded that no material issue of disputed

fact remained as to Mr. Johnson.

       With respect to Mrs. Johnson, the district court held that

she had also failed to show a genuine dispute of material fact

regarding      her    liability.            The     court      determined       that     “Mrs.

Johnson was a responsible person at Koba Institute during the

relevant      quarters      even       though        her       participation        in     the

corporation’s        affairs     was    minimal,”          and    that    she    had     acted

“willfully” in failing to see to it that the outstanding tax

liabilities were paid.           (J.A. 253, 268.)

                                              11
       The district court also concluded that the judgment entered

against Mrs. Johnson would not result in a double recovery for

the Government.          The      court     noted    the   Government’s       policy    of

retaining       only   one     full       satisfaction     of     an   underlying      tax

liability despite it being able to attempt to collect against

any responsible party, and reasoned that any potential issues

could be avoided through careful drafting of the final judgment

order.

       Finally, the district court denied as moot the Government’s

motion to strike the reports of the Johnsons’ expert and to

exclude his testimony at trial, finding that in their opposition

to the Government’s motions for summary judgment, the Johnsons

had “neither relied upon [the expert’s] reports nor produced any

evidence    to     create      an    issue     of    material      fact”   that       would

prohibit    the    entry     of     summary    judgment       against    them.        (J.A.

271.)

       The district court accordingly entered judgment in favor of

the    Government      and   against        Mrs.    Johnson     for    $304,955.90      and

against    Mr.    Johnson      for    $240,071.12,         plus    interest      in   each

instance at the rate specified in I.R.C. § 6601 from August 22,

2011    until     payment.          The    judgment    order      provided    that      the

judgment would “be reduced to the extent that the United States

. . . has collected or will collect on those debts pursuant to

the offer in compromise it approved with Koba Institute.”                             (J.A.

                                             12
274.)    The Johnsons filed a joint motion to alter, amend, or

relieve the judgment, which the district court denied.

     The     Johnsons     timely   noted      this   appeal,       and   we   have

jurisdiction pursuant to 28 U.S.C. § 1291.

                                     II.

     The Internal Revenue Code (“I.R.C.” or the “Code”) requires

employers to withhold federal social security and income taxes

from the wages of their employees.                See 26 U.S.C. §§ 3102(a),

3402(a); Erwin v. United States, 591 F.3d 313, 319 (4th Cir.

2010).     Because      the   employer    holds    these   taxes    as   “special

fund[s] in trust for the United States,” 26 U.S.C. § 7501(a)

(emphasis added), the withheld amounts are commonly referred to

as “trust fund taxes,” Slodov v. United States, 436 U.S. 238,

243 (1978) (internal quotation marks omitted).

     The Code “assure[s] compliance by the employer with its

obligation . . . to pay” trust fund taxes by imposing personal

liability on officers or agents of the employer responsible for

“the employer’s decisions regarding withholding and payment” of

the taxes.     Id. at 247 (interpreting 26 U.S.C. § 6672).                To that

end, § 6672(a) of the Code provides that “[a]ny person required

to collect, truthfully account for, and pay over any tax . . .

who willfully fails” to do so shall be personally liable for “a

penalty equal to the amount of the tax evaded, or not . . . paid

                                         13
over,” the 100% penalty.                  26 U.S.C. § 6672(a).                Although labeled

as a “penalty,” § 6672 is not primarily a punitive provision as

it “brings to the government only the same amount to which it

was entitled by way of the tax.”                      Turnbull v. United States, 929
F.2d 173,    178       n.6    (5th    Cir.     1991)      (internal        quotation       marks

omitted).

        Personal liability for a corporation’s unpaid trust fund

taxes    extends          to    any     person    who     (1)      is     “responsible”            for

collection          and    payment       of    those     taxes;         and    (2)    “willfully

fail[s]”       to    see       that   the     taxes    are    paid.           Plett    v.    United

States, 185 F.3d 216, 218 (4th Cir. 1999); O’Connor v. United

States, 956 F.2d 48, 50 (4th Cir. 1992).                           Once the IRS assesses

a taxpayer for this liability, the taxpayer has the burden of

proof    at    trial       on    both     elements      of    §    6672       liability.           See

O’Connor, 956 F.2d at 50.

        We    review       de    novo    a    district       court’s      grant       of    summary

judgment       to    the       Government,       resolving        all    disputed          facts    in

favor of the taxpayer.                  See O’Connor, 956 F.2d at 50.                  To defeat

summary judgment, however, the taxpayer—like any other litigant—

must identify an error of law or a genuine issue of disputed

material fact.             See Fed. R. Civ. P. 56(a); Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt.

Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

“[I]n the absence of disputed material facts, summary judgment

                                                 14
represents a favored mechanism to secure the ‘just, speedy, and

inexpensive determination’” of taxpayer liability under § 6672.

Plett, 185 F.3d at 223 (emphasis in original) (quoting Fed. R.

Civ. P. 1).

                                               III.

      With    the     foregoing          principles         in   mind,    we     turn     to   the

claims of error raised on appeal.                      Mr. Johnson contends that the

grant of summary judgment was erroneous because the assessment

of the 100% penalty as to him was time-barred under § 6501 of

the   Code.         Mrs.     Johnson         argues     that     the     grant       of   summary

judgment against her was erroneous because she was neither a

“person      responsible”          for       the     payment       of    Koba     Institute’s

withholding taxes nor “willfully” failed to do so.                                Lastly, the

Johnsons      posit        that    the        amounts       of   their     respective          tax

liabilities     under       §     6672       were    incorrectly        calculated        because

disputed issues of material fact remained to be determined.                                     We

consider each argument in turn.

                                                A.

      Mr.     Johnson       contends          that    the    assessment         of    the      100%

penalty against him was not “made within the limitations period

set   forth    in     26    U.S.C.       §    6672.”        (Br.    29.)         However,      Mr.

Johnson’s one-page “argument” on brief as to this issue gives no

                                                15
description as to the basis at law for his contention.                                   Even

after questioning at oral argument, we are left with no firm

guide as to why Mr. Johnson contends the assessments are time-

barred.

      Mr. Johnson has not challenged the basis for the district

court’s decision in any meaningful way.                        See Fed. R. App. P.

28(a)(9)(A)         (requiring     argument      section        of     an     appellant’s

opening     brief     to     contain      “appellant’s        contentions          and       the

reasons for them, with citations to the authorities and parts of

the record on which the appellant relies”).                          Here, Mr. Johnson

has   failed    to     comply     with    the   dictates       of     Federal         Rule   of

Appellate      Procedure      28(a)(9)(A),         as    he    offers       no     argument

explaining     how     the    district     court    erred;          rather,      he    simply

states the issue he wishes to raise and cites several sections

of the Code, but without analysis of how these statutes would

apply to him.          As a result, we consider Mr. Johnson to have

abandoned      or    waived      his    challenge       to    the    district         court’s

determination that the assessment of the 100% penalty against

him   under    § 6672      was    not    timely.        See    Edwards        v.      City   of

Goldsboro, 178 F.3d 234, 241 n.6 (4th Cir. 1999) (“Failure to

comply with the specific dictates of [Federal Rule of Appellate

Procedure      28(a)(9)(A)]        with    respect       to    a     particular          claim

triggers abandonment of that claim on appeal.”); see also Oken

v. Corcoran, 220 F.3d 259, 274 n.2 (4th Cir. 2000) (Michael, J.,

                                           16
concurring) (“In order to preserve an issue on appeal, however,

it   is   not    enough    to     simply    assert   the        claim;      a   party     must

provide supporting argument.”).

      Accordingly,         we    affirm     the    district           court’s     grant     of

summary judgment against Mr. Johnson individually.

                                            B.

      We next address the argument that the district court erred

in    granting        summary           judgment     against            Mrs.       Johnson.

Specifically,       Mrs.    Johnson       contends       that    she    was     not   (1)    a

“person       responsible”        for     the    payment        of     Koba     Institute’s

withholding taxes; and (2) did not “willfully” fail to pay over

those taxes.        We must disagree with Mrs. Johnson because the

undisputed record shows that she was properly liable for the

100% penalty.

                                            1.

      The Code defines a “responsible person” as one “required to

collect,      truthfully        account    for,    and    pay        over   any    tax,”    26

U.S.C.    §     6672(a)    (emphasis       added).         The       Supreme      Court    has

interpreted this statutory language to apply to all “persons

responsible for collection of third-party taxes and not . . .

[only] to those persons in a position to perform all three of

the enumerated duties.”                 Slodov, 436 U.S. at 250.                  Thus, the

                                            17
Code   deems     anyone    required       to   “collect”          or    “account       for”     or

“remit” taxes a “responsible person” for purposes of §                                      6672.

See Plett, 185 F.3d at 219.

       In    determining        whether    a   person        is    “responsible”            under

§ 6672, we undertake a “pragmatic, substance-over-form inquiry”

focused on the person’s status, duty, and authority within the

corporation.       Id.      The “crucial inquiry is whether the person

had the ‘effective power’ to pay the taxes—that is, whether he

[or she] had the actual authority or ability, in view of his

status within the corporation, to pay the taxes owed.”                                        Id.

(quoting Barnett v. IRS, 988 F.2d 1449, 1454 (5th Cir. 1993)).

       Because    this     analysis       focuses      “on    substance         rather       than

form,”      holding    a   corporate       title       alone      does        not     render    a

taxpayer     a   “responsible       person.”          O’Connor, 956 F.2d     at     51.

While a determination of that status is necessarily fact-based,

summary      judgment      is    nonetheless          appropriate            where,    in      the

absence of genuine disputes of material fact, it is clear “as a

matter of law” that the taxpayer satisfies this test and is a

“responsible      person.”          Barnett, 988 F.2d       at     1454    &     n.10

(acknowledging that “countless courts have found responsibility

[for purposes of § 6672] as a matter of law” because “extensive

caselaw . . . narrowly constrains a factfinder’s province in

§ 6672      cases”).       Our    analysis       is   guided       by    a    list     of    non-

exclusive factors common in the § 6672 case law, such as whether

                                            18
the taxpayer served as an officer of the corporation or a member

of its board of directors, controlled the corporation’s payroll,

determined     which   creditors    to      pay    and     when   to    pay       them,

participated in the corporation’s day-to-day management, had the

ability to hire and fire employees, and possessed check-writing

authority.     Erwin, 591 F.3d at 321; Plett, 185 F.3d at 219.

       Although “a party cannot be presumed to be a responsible

person merely from titular authority,” O’Connor, 956 F.2d at 51,

status as an officer or director is “nevertheless material” to

this determination, Teets v. United States, 29 Fed. Cl. 697, 706

(Fed. Cl. 1993).       Mrs. Johnson had been the corporation’s sole

shareholder since 1998 and consequently had the effective power

to change the officers and directors as she chose and thereby

direct the business of the corporation.              Separately as both vice

president and chair of the board of directors since early 2001,

Mrs.    Johnson   enjoyed    considerable         actual    authority        at   Koba

Institute.

       The   corporation’s   bylaws,     board     resolutions,        and    banking

documents     demonstrate    that   Mrs.     Johnson       was    a    “responsible

person,” as it is clear that she had effective control of the

corporation, including its finances.              See Taylor v. IRS, 69 F.3d
411, 416–17 (10th Cir. 1995) (holding corporate director and

officer a “responsible person” as a matter of law because he

“possessed     sufficient    control     over      corporate      finances,        had

                                       19
authority to borrow funds and write checks and thereby had the

‘effective power’ to pay those taxes” (quoting Barnett, 988 F.2d

at 1454)).     The foregoing corporate documents indicate that Mrs.

Johnson, while serving as chair of the board, would also serve

as president of the corporation, a role that included authority

to manage Koba Institute’s daily affairs and to execute checks

and other legal documents on its behalf.              Although Mrs. Johnson

“delegated” and “entrusted” this authority to Mr. Johnson prior

to 2005, (See J.A. 16, 478, 480, 482, 1481–82, 1515), remaining

only minimally involved in the corporation’s affairs as board

chair and vice president, delegation of such authority does not

relieve a taxpayer of responsibility under § 6672, Purcell v.

United     States,   1 F.3d 932,    937   (9th    Cir.   1993)   (That    a

taxpayer’s     function    in   an     enterprise     “is    unconnected     to

financial decision making or tax matters is irrelevant where

that individual has the authority to pay or to order the payment

of delinquent taxes.”); Erwin, 591 F.3d at 322.               A taxpayer may

be a “responsible person” if she “had the authority required to

exercise    significant    control     over   the   corporation’s    financial

affairs, regardless of whether [s]he exercised such control in

fact.”     Purcell, 1 F.3d at 937 (concluding that a president and

sole shareholder, who was also an authorized signatory on the

corporation’s checking account, was a “responsible person” even

though he had fully delegated all financial duties to another

                                       20
employee).           Thus,       despite        delegating      her       authority     to    Mr.

Johnson       and    permitting           him    to    run    the    corporation’s          daily

affairs, Mrs. Johnson remained a “responsible person” because

she had effective control of the corporation and the effective

power to direct the corporation’s business choices, including

the withholding and payment of trust fund taxes.

       Although Mrs. Johnson maintains that any authority she held

was    merely        technical         in       nature,      the     undisputed        evidence

establishes that she possessed both legal and actual authority

over Koba Institute.                 See United States v. Landau, 155 F.3d 93,

103 (2d Cir. 1998) (if taxpayer fails to show a genuine dispute

of    material        fact      on    nature      of    authority,         the      court     “may

reasonably conclude that the documentary evidence of authority

reflects       the     reality”).               Mrs.   Johnson’s          voluntary     minimal

involvement in daily corporate affairs before 2005, however, and

assertions          that     Mr.     Johnson       exercised        all     daily     operating

authority      fail        to   create      a   genuine      dispute      of   material       fact

regarding limitations on her effective power as to the trust

fund taxes.          Any deferral by Mrs. Johnson in the exercise of her

authority never altered the fact that she possessed “effective

power” over Koba Institute at all times.                            See Barnett, 988 F.2d

at    1454.         Indeed,        Mrs.     Johnson’s        actions      immediately        after

learning of the tax delinquencies in December 2004—a period that

“cast[s] light” on her responsibility from 2001 through 2004—

                                                 21
demonstrate that her actual authority was co-extensive with the

legal authority she possessed.         Erwin, 591 F.3d at 321.

       Mrs. Johnson admits in her pleadings that she “fired the

finance director,” the employee tasked with making payroll tax

payments, as soon as she discovered that Koba Institute had not

remitted these taxes as required by law.            (J.A. 17.)     She also

“directed    Mr.   Johnson     to   personally   handle    all   future    tax

payments as of January 2005” and “required” him to provide her

with “visual proof” of all tax payments the corporation made.

(J.A. 17.)    These admissions indicate that Mrs. Johnson’s status

in the corporation during the quarters at issue enabled her to

have    “substantial   input    into   [its   financial]   decisions      [from

2001 through 2005], had [s]he wished to exert [her] authority.” 10

Barnett, 988 F.2d at 1455 (quotation marks omitted).

       10
         Although not singly determinative, Mrs. Johnson’s
execution of corporate leases and lines of credit as a guarantor
for Koba Institute offers additional support for the conclusion
that she was a “responsible person” for § 6672 purposes.     See
Erwin, 591 F.3d at 322 (discussing a taxpayer’s personal
guarantees of corporate loans in determining his responsibility,
but noting that this fact “[did] not alone establish” his status
as a “responsible person”). Without these acts by Mrs. Johnson,
the corporation’s financial capacity would have been adversely
affected. Because Mrs. Johnson actively intervened to keep the
corporation financially viable, Koba Institute was able to pay
its creditors.   The record further reflects that Mrs. Johnson
made more than a dozen loans to Koba Institute between 2001 and
2003, after Mr. Johnson had informed her that the corporation
needed additional funds to cover its operating expenses.

                                       22
     Moreover,       the       fact   that,       from      2001     through     2004,       Mrs.

Johnson followed the corporation’s internal policy and did not

write checks without knowing that Mr. Johnson had previously

approved    them     does       not     negate     §     6672       “responsible        person”

status.      (See    J.A.       1484–91,        1576.)          Although       she     followed

corporate procedure without exception during that time, it is

undisputed that Mrs. Johnson ceased following this policy almost

immediately       upon      learning         of    the        2001-2004        payroll        tax

deficiencies       and     could      have      done     so    at     any     earlier     time.

Following her “revamped oversight of tax payments,” Mrs. Johnson

would     write    checks        from     the     payroll           account     without      any

instruction from Mr. Johnson.                (J.A. 17, 1484–85.)                Accordingly,

the fact that Mrs. Johnson previously chose not to write checks

without    Mr.    Johnson’s          approval      does       not    show     that     she   was

prevented earlier from doing so other than by her own choice.

See, e.g., Thosteson v. United States, 331 F.3d 1294, 1299–1300

(11th Cir. 2003) (holding corporate officer and stockholder a

“responsible      person”       as    a   matter       of     law    even     though    he    had

“limited check writing authority, up to only $750, without a

countersignature”); Lyon v. United States, 68 F. App’x 461, 469

(4th Cir. 2003) (unpublished) (per curiam) (“The fact that [the

taxpayer]    chose       not    to    exercise      his       legal    authority        is    not

enough to show that he had no actual authority. . . . [He] has

not demonstrated that his father actually prevented him, or that

                                             23
he could have prevented him, from paying the taxes if [he] had

attempted to do so.”).                The record also indicates that Koba

Institute      opened    several      operating    accounts     between       2001    and

2005, and that on each of those accounts, Mrs. Johnson was fully

authorized to write checks and execute other bank documents.

       While     she    may     not   have     been   running     the     day-to-day

operations       of    the    corporation      between   2001    and     2004,       Mrs.

Johnson    had     a    non-delegable        responsibility     to     monitor       Koba

Institute’s financial affairs.                 See Barnett, 988 F.2d at 1457

(“[W]e believe that not only is it a bad business practice for a

high-level company official such as [Mrs. Johnson] to fail to

monitor [the corporation’s] finances, it also subjects [her] to

being held a responsible party under § 6672.”).                        Mrs. Johnson

had the effective power to exercise authority when she chose to

do so, even though she chose at times to voluntarily limit her

involvement in corporate affairs.                  Although Mrs. Johnson often

chose not to exercise the authority which she possessed, such a

decision is insufficient to permit a taxpayer to avoid § 6672

responsibility.         See Kinnie v. United States, 994 F.2d 279, 284

(6th   Cir.     1993)    (stating      that    a   taxpayer     need    not    “always

exercise    his       powers”   to    remain    responsible      for    seeing       that

withholding taxes are paid, and “may not escape liability by

delegating the task of paying over the taxes to someone else”).

Moreover, after 2004, while the prior periods’ payroll taxes

                                          24
remained unpaid, Mrs. Johnson actively exercised her authority

over the affairs of Koba Institute while continuing to receive

substantial compensation and benefits from the corporation. 11

     We   therefore   conclude   that   the   Government   presented

undisputed evidence that established as a matter of law that

Mrs. Johnson was a “responsible person” under § 6672 during the

relevant tax periods because she had the effective power to pay

the trust fund taxes of Koba Institute. 12

     11
         While also relevant to the “willfulness” finding
discussed in the next section, the same evidence of Mrs.
Johnson’s knowing receipt of substantial assets from the
corporation while the payroll taxes remained unpaid also
bolsters the proof of her “responsible person” status.        The
record shows that Mrs. Johnson received an annual salary ranging
from approximately $100,000 to $193,000 from 2001 through 2004,
as well as a corporate car and cell phone. Koba Institute also
paid the rent for the Johnsons’ home, totaling between $40,000
and $50,000 in 2001, 2002, and 2004.
     12
        We note that other courts have reached precisely the same
conclusion in considering similar facts.    See, e.g., Jefferson
v. United States, 546 F.3d 477, 481 (7th Cir. 2008) (holding
board president “responsible person” as a matter of law because
he secured loans and directed past payment of taxes for the
corporation, reviewed financial reports, and had check-signing
authority); Thosteson, 331 F.3d at 1299–1300 (holding corporate
officer and stockholder a “responsible person” as a matter of
law even though he had “limited check writing authority, up to
only $750, without a countersignature”); Taylor, 69 F.3d at 417
(holding corporate director and officer a “responsible person”
as a matter of law because he “possessed sufficient control over
corporate finances, had authority to borrow funds and write
checks and thereby had the ‘effective power’ to pay those taxes”
(quoting Barnett, 988 F.2d at 1454)); Greenberg v. United
States, 46 F.3d 239, 243–44 (3d Cir. 1994) (holding in-house
controller a “responsible person” as a matter of law even though
he took instructions from the controlling stockholder and
“feared for his job were he to independently issue a check for
(Continued)
                                 25
                                          2.

     Having found Mrs. Johnson a “responsible person,” we turn

to the other necessary element of § 6672 liability, whether she

“willfully” failed to collect, account for, or remit payroll

taxes to the United States.               26 U.S.C. § 6672(a); Plett, 185
F.3d at 219.         This inquiry focuses on whether Mrs. Johnson had

“knowledge of nonpayment or reckless disregard of whether the

payments were being made.”                Plett, 185 F.3d at 219 (quoting

Turpin v. United States, 970 F.2d 1344, 1346 (4th Cir. 1992)).

     Mrs. Johnson contends that she did not act “willfully” in

failing    to     remit    Koba    Institute’s        delinquent     payroll       taxes

because    she      did   not   learn    of    the    deficiency    until     the    IRS

notified      her    in    December      2004.        This      argument,     however,

overlooks that a taxpayer may act “willfully” for purposes of §

6672 even though she does not learn about unpaid taxes until

after   the      corporation      has   failed       to   pay   them.       “[W]hen    a

responsible       person    learns      that    withholding       taxes     have    gone

unpaid in past quarters for which he [or she] was responsible,

the [tax] delinquency”); Kinnie, 994 F.2d at 284 (holding
corporate   vice  president   and  fifty-percent  shareholder  a
“responsible person” as a   matter of law because he had check-
signing authority, hired an accountant to review the books, and
eventually took control of the business); Mazo v. United States,
591 F.2d 1151, 1156 (5th Cir. 1979) (holding corporate
stockholders, officers, and directors “responsible persons” as a
matter of law even though others handled all day-to-day
operations and prepared all corporate checks).

                                          26
he     [or    she]    has     a    duty       to       use     all     current       and      future

unencumbered         funds    available        to      the      corporation         to   pay    back

those    taxes.”         Erwin, 591 F.3d        at    326.         If    the     taxpayer

thereafter knowingly permits payments of corporate funds to be

made     to     other        creditors,        a       finding         of     willfulness        is

appropriate.         See id. (“Even assuming . . . that [the taxpayer]

did not act willfully prior to learning of the full extent of

the    tax     deficiencies        .    .    .,     his      conduct        after    that      point

unquestionably         evidences         willfulness            as     a    matter       of    law.”

(emphasis in original)).

       The record demonstrates that Koba Institute continued to

make    payments        to    other         creditors          using       unencumbered        funds

following Mrs. Johnson’s receipt of the IRS notice in December

2004.        The Government has produced numerous salary checks that

the    corporation       issued        to    Mrs.      Johnson       in     2005,    which      Mrs.

Johnson readily cashed.                Yet it is undisputed that Mrs. Johnson,

a “responsible person,” knew that payroll taxes for numerous

quarters from 2001 through 2004 remained unpaid.                                  Mrs. Johnson’s

failure to remedy the payroll tax deficiencies upon learning of

their    existence       in    December        2004,         while     directing         corporate

payments elsewhere, including to herself, constitutes “willful”

conduct under § 6672.                  This is particularly so given that, at

Mrs. Johnson’s direction, Koba Institute paid other creditors

during this period.               And, as noted earlier, during the 2001 to

                                                  27
2004   delinquent          tax   periods,      Mrs.    Johnson      received      well    in

excess       of    $500,000      in   compensation       and     benefits      from      the

corporation while the payroll taxes went unpaid.                            Cf. Turpin,
970 F.2d at 1347 (“The intentional preference of other creditors

over the United States is sufficient to establish the element of

willfulness        under    section     6672(a).”      (internal      quotation       marks

omitted)).          Even      viewing    the     evidence      in    the    light      most

favorable to Mrs. Johnson, we conclude that the record allows no

conclusion other than that the failure to pay the payroll taxes

was willful on Mrs. Johnson’s part.

                                            3.

       In    sum,    we    conclude     that     the   Government      has     presented

undisputed evidence sufficient to establish as a matter of law

that Mrs. Johnson was a “responsible person” under § 6672 during

the relevant tax periods, and that she “willfully” failed to see

that the withholding taxes were paid.                   No genuine dispute as to

any material fact remains to be decided which would alter this

conclusion.         Accordingly, we hold that the district court did

not    err    in    granting      summary      judgment     against        Mrs.   Johnson

individually.

                                            28
                                             C.

      Finally,      we    briefly        address     the     claims        raised       by     the

Johnsons with respect to the district court’s determination of

the     amounts    of     their     respective        100%      penalty          liabilities.

Relying     on    the    reports    of    their     expert      witness,         Leo    Bruette

(“Bruette”), the Johnsons assert that there is a genuine issue

of material fact as to the amounts of that liability.                                          They

allege    that     Bruette    identified          “numerous     errors,          omissions[,]

and inconsistencies” in the tax assessments made against them,

which therefore undermined the Government’s proof of the amounts

owed.    (Br. 26.)

      The    district       court,       however,     found       that          the     Johnsons

“neither relied upon Bruette’s reports nor produced any evidence

to create an issue of material fact” that would preclude summary

judgment.        (J.A. 271.)       Indeed, the Johnsons did not discuss or

cite Bruette’s reports in either of their opposition briefs to

the   Government’s        summary     judgment       motions,         in    Mr.       Johnson’s

motion    for     partial    summary      judgment,        or   even       as    exhibits       in

opposing summary judgment.               Further, the Johnsons do not contest

the   district      court’s        factual    conclusion         in    this           regard    on

appeal.     The reports, therefore, could not—and did not—create a

genuine issue of material fact.

                                             29
       We also find that Mrs. Johnson’s concerns regarding double

recovery are without merit. 13         Mrs. Johnson asserts that entering

judgment against her could result in double recovery for the

Government because it may collect a significant portion of the

unpaid trust fund taxes through an offer in compromise that Koba

Institute negotiated with the IRS.               We note that Mr. Johnson

raised a similar argument when the Government previously sought

judgment against him for trust fund recovery penalties at Koba

Associates, which was clearly rejected by the district court.

See Johnson v. United States, 203 F. Supp. 2d 416, 425 (D. Md.

2002), aff’d, 50 F. App’x 113 (4th Cir. 2002) (unpublished) (per

curiam),      cert.   denied,   540   U.S.    (2003).     In    that    case,      Mr.

Johnson argued that the Government “might attempt to obtain some

sort of double recovery from both Koba [Associates] and [him] in

excess of the established amount of withholding taxes due.”                        Id.

After explaining that the Government may attempt to satisfy a

debt    for    unpaid   payroll   taxes      against    the    business       or   the

taxpayer, the district court clarified that the IRS follows an

“established administrative policy” of only collecting such tax

delinquencies once.         Id.; see also id. at 425–26 (“[T]he mere

fact   that    the    [Government]    is   attempting    to    secure     a   second

       13
        This issue was raised, although obliquely, by Mrs.
Johnson in her opposition to the Government’s motion for summary
judgment, and therefore can only affect her liability.       Mr.
Johnson did not raise a double recovery argument.

                                       30
source for the payment of taxes owed does not necessarily mean

that it will attempt to exhaust both sources in excess of the

debt.”).      The court reasoned that “any lingering concerns of

double   recovery”        could      be     allayed        “by       a    carefully         drafted

judgment order of the district court.”                           Id. at 425.               We agree

with the district court’s reasoning in the prior case, and note

that similar precautions were taken in this case.                                  The district

court’s judgment order specifically provides that the judgments

against the Johnsons will “be reduced to the extent that the

United States . . . has collected or will collect on those debts

pursuant    to    the    offer       in    compromise           it       approved     with     Koba

Institute.”      (J.A. 274.)

     Mrs.    Johnson      further         asserts       that     the       Government         might

succeed in obtaining a double recovery because certain voluntary

payments made by Koba Institute were not properly credited.                                     She

does not, however, develop this argument or cite any evidence to

corroborate      it.      See    Fed.      R.    App.      P.    28(a)(9)(A)          (requiring

argument    section      of     an   appellant’s           opening         brief      to    contain

“appellant’s      contentions             and    the       reasons         for      them,      with

citations to the authorities and parts of the record on which

the appellant relies”).              As a result, we consider her to have

abandoned    this       claim.        See       Edwards, 178 F.3d   at    241     n.6.

Moreover,    while      Koba     Institute           did   designate         some      payments,

those applied to the second quarter of 2001 (ending June 30,

                                                31
2001), which is not a quarter for which Mrs. Johnson was found

liable.

     Accordingly, we conclude that the district court correctly

determined   the   amounts   of    the   Johnsons’   respective   tax

liabilities under § 6672.

                                  IV.

     For all of the foregoing reasons, we affirm the judgment of

the district court.

                                                            AFFIRMED

                                  32