Tax Type
Employer Income Tax Withholding
Description
Liability of corporate officer; Estimated withholding tax and penalty assessments
Topic
Withholding of Tax
Date Issued
09-22-1992
September 22, 1992
Re: §58.1-1821 Application; Withholding Tax
Dear*************
This will reply to your letters of June 19, 1990 and June 25, 1990, in which you seek correction of an assessment of withholding tax and penalties on behalf of **************(the "Taxpayer").
FACTS
Estimated withholding tax and penalty assessments were made against ***************(the "corporation") for the tax years 1986-1988. The corporation went out of business, and the assessments were converted to the Taxpayer, an officer of the corporation.
The Taxpayer contends that the assessments are excessive. Furthermore, he believes he is not liable for the tax. The Taxpayer states that he had no knowledge of the failure to pay such taxes, nor did he have authority to prevent the failure. The department has held the Taxpayer liable for tax, penalty and interest due from the corporation under Va. Code §58.1-1813.
DETERMINATION
Under Va. Code §58.1-1813, corporate officers may be held personally liable for state taxes, provided the officer "willfully fails to pay, collect or truthfully account for and pay over any state tax administered by the Department of Taxation, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof."
The term "corporate or partnership officer" as used in Va. Code § 58.1-1813 means an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee
or a member is under a duty to perform on behalf of the corporation or partnership the act in respect of which the violation occurs and who (1) had knowledge of the failure or attempt, and (2) had authority to prevent such failure or attempt.
You have provided no evidence to indicate that the Taxpayer is not a responsible corporate officer. Based on the information presented, it appears that the Taxpayer exercised significant control over the operation of the corporation and may be held liable for the tax, penalty and interest due from the corporation.
You contend that the amount of the assessments are excessive and have presented Form VA-6 for 1987 and 1988, showing a tax liability significantly less than the department's assessments. The amounts on the forms VA-6 correspond with amounts reported on federal W-2 forms issued by the corporation. The department will accept the amounts reported on Form VA-6 for 1987 and 1988 as the withholding tax liability for those tax years.
Accordingly, the assessments will be adjusted to reflect the information reported on Form VA-6 for 1987 and 1988. You will shortly receive an updated bill with interest accrued to date. The bill should be paid within 30 days to avoid the accrual of additional interest.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/4286F
Rulings of the Tax Commissioner