Mack Sperling recently published a thorough review of the law relating to a corporate officer or other "responsible person's" personal liability for payroll tax debt. Mr. Sperling discusses the law in the 4th Judicial Circuit, but the principles set out in the 4th Circuit generally apply nationwide. The applicable questions to be considered by a judge (in the 4th Circuit) to determine whether an individual bears responsibility for trust fund taxes include:
- did the employee serve as an officer or director of the company?
- did the employee control the company's payroll?
- did the employee determine which of the company's creditors to pay and when to pay them?
- did the employee participate in the corporations day to day management?
- did the employee have the ability to hire and fire employees?
- did the employee possess the power to write checks?