Tax Type
Employer Income Tax Withholding
Retail Sales and Use Tax
Description
Corporate officer; Converted assessments
Topic
Collection of Delinquent Tax
Taxpayers' Remedies
Date Issued
05-12-2000
May 12, 2000
Re: § 58.1-1821 Application: Withholding and Retail Sales and Use Tax
Dear ****
This is in reply to your letter in which you seek an abatement of the department's converted withholding and retail sales and use tax assessments issued to ****** (the "Taxpayer"), for the periods January 1998 through September 1998, and February 1998 through October 1998, respectively. I apologize for the delay in responding to your appeal.
FACTS
For the periods under review, the Taxpayer's organization, a limited liability company, failed to file and pay withholding and sales and use tax returns. As the returns remained unpaid, the assessments were converted to the responsible officers of the company pursuant to Code of Virginia § 58.1-1813.
The Taxpayer states that the department is currently receiving payments from the sole member, owner and manager of the company. The Taxpayer also states that he is not liable for the converted assessments because he had no knowledge of the failure to pay such taxes, and he did not have any authority to prevent such failure. Accordingly, the Taxpayer requests that the assessments against him be abated.
DETERMINATION
Code of Virginia § 58.1-1813 defines the term "corporate officer" as an officer of the corporation who is under a duty to perform on behalf of the corporation the act in respect of which the violation occurs and who (1) had knowledge of the failure and (2) had the authority to prevent it. Under the standard of willfulness applied by the courts, all that needs to be shown is that the act was "voluntary, conscious, and intentional." Hewitt v. U.S., 377 F.2d 921, 924 (5th Cir. 1967).
While documentation presented by the department's auditor reflects that the Taxpayer was listed on various documents on behalf of the business as a general partner, other information indicates that the Taxpayer's primary duties were connected to the business's sales activities. The Taxpayer was responsible for recruiting and training sales personnel. Based on the information before me, l find that the Taxpayer was not charged with any tax responsibilities, nor was the Taxpayer under a duty to file and pay taxes for the business. Accordingly, l find that the Taxpayer is not liable for the assessments under Code of Virginia § 58.1-1813, totaling $****. As a result, l have directed that the department's assessments against the Taxpayer be abated.
If you should have any questions regarding this matter, please contact ***** of the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/25176Q
Re: § 58.1-1821 Application: Withholding and Retail Sales and Use Tax
Dear ****
This is in reply to your letter in which you seek an abatement of the department's converted withholding and retail sales and use tax assessments issued to ****** (the "Taxpayer"), for the periods January 1998 through September 1998, and February 1998 through October 1998, respectively. I apologize for the delay in responding to your appeal.
FACTS
For the periods under review, the Taxpayer's organization, a limited liability company, failed to file and pay withholding and sales and use tax returns. As the returns remained unpaid, the assessments were converted to the responsible officers of the company pursuant to Code of Virginia § 58.1-1813.
The Taxpayer states that the department is currently receiving payments from the sole member, owner and manager of the company. The Taxpayer also states that he is not liable for the converted assessments because he had no knowledge of the failure to pay such taxes, and he did not have any authority to prevent such failure. Accordingly, the Taxpayer requests that the assessments against him be abated.
DETERMINATION
Code of Virginia § 58.1-1813 defines the term "corporate officer" as an officer of the corporation who is under a duty to perform on behalf of the corporation the act in respect of which the violation occurs and who (1) had knowledge of the failure and (2) had the authority to prevent it. Under the standard of willfulness applied by the courts, all that needs to be shown is that the act was "voluntary, conscious, and intentional." Hewitt v. U.S., 377 F.2d 921, 924 (5th Cir. 1967).
While documentation presented by the department's auditor reflects that the Taxpayer was listed on various documents on behalf of the business as a general partner, other information indicates that the Taxpayer's primary duties were connected to the business's sales activities. The Taxpayer was responsible for recruiting and training sales personnel. Based on the information before me, l find that the Taxpayer was not charged with any tax responsibilities, nor was the Taxpayer under a duty to file and pay taxes for the business. Accordingly, l find that the Taxpayer is not liable for the assessments under Code of Virginia § 58.1-1813, totaling $****. As a result, l have directed that the department's assessments against the Taxpayer be abated.
If you should have any questions regarding this matter, please contact ***** of the department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/25176Q
Rulings of the Tax Commissioner