Tax Type
Retail Sales and Use Tax
Withholding Taxes
Description
Taxpayer is a responsible officer of the Corporation
Topic
Collection of Delinquent Tax
Constitutional Provisions
Corporate Distributions and Adjustments
Date Issued
09-17-2004
September 17, 2004
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Withholding Tax and Corporate Income Tax
Dear **************:
This will reply to your letter in which you seek correction of the assessments issued to ***** (the "Taxpayer") as the responsible officer of ***** (the "Corporation") for various periods from January 1997 through December 1997. I apologize for the delay in responding to your letter.
FACTS
The Taxpayer was the president of the Corporation during the taxable periods at issue. The Corporation failed to file withholding tax returns, sales and use tax returns and corporate income tax returns and remit the corresponding taxes due for those returns for the periods at issue. The Department issued assessments to the Corporation for the taxes, penalty and interest due, but the Corporation failed to pay the assessments. As a result, and pursuant to Va. Code § 58.1-1813, the Department assessed the Taxpayer penalties in the amount of the tax, penalty, and interest owed by the Corporation. The Taxpayer has paid a portion of the assessments and contends that two other officers of the Corporation should be held liable for the remainder of the outstanding assessments.
DETERMINATION
Virginia Code § 58.1-1813 addresses the liability of corporate officers and provides, in pertinent part, the following:
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- Any corporate, partnership or limited liability officer who willfully fails to pay, collect or truthfully account for and pay over any tax administered by the Department of Taxation, 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 of the amount of the tax evaded, or not paid, collected or accounted for and paid over, to be assessed and collected in the same manner as such taxes are assessed and collected.
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- The term ‘corporate, partnership or limited liability officer'. . . means:
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- an officer or employee of a corporation, or a member, manager or employee of a partnership or limited liability company, who as such officer, employee, member or manager is under a duty to perform on behalf of the corporation, partnership or limited liability company the act in respect of which the violation occurs and who (1) had knowledge of the failure or attempt as set forth herein and (2) had authority to prevent such failure or attempt.
The Department determined in a hearing that the Taxpayer is a responsible officer of the Corporation. The Taxpayer does not dispute this fact. Because of this determination, the Department may seek payment of the Corporation's liability from the Taxpayer until the original assessments against the Corporation are satisfied in full. There is no provision in Va. Code § 58.1-1813 that requires the Department to seek payment of a corporation's liability equally from all responsible officers of the corporation.
Based upon the foregoing, the assessments issued to the Taxpayer are correct and there is no basis for relief for the outstanding balance. This ruling does not preclude the Taxpayer from seeking contribution from other parties.
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- The Taxpayer should remit payment in the amount of ***** which includes
The Virginia Code sections cited are available on-line in the Tax Policy Library section of the Department's web site, located at www.tax.state.va.us. If you have any questions regarding this determination, please contact ***** at *****.
Sincerely,
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- Kenneth W. Thorson
Tax Commissioner
- Kenneth W. Thorson
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AR/33471S
Rulings of the Tax Commissioner