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Even if it were assumed that Carolina Acoustical was
petitioner's employer and as such is liable for taxes it failed
to withhold from his paycheck, see sec. 3403, petitioner is also
liable for the taxes, sec. 61(a). Respondent may collect payment
from either the employee or the employer, but the employee
remains ultimately liable for his own taxes even though his
employer was obligated to withhold. In Edwards v. Commissioner,
supra at 84, this Court held as follows:
had the respondent chosen to do so, he could have
attempted to collect from the company the amount which
it was required to withhold from the settlement
payment. Respondent, however, need not do so, but may
assess the tax against the employee upon whom, in the
final analysis, the tax burden must fall. The employee
of an employer failing to properly withhold amounts for
tax is not entitled to a credit for amounts which were
never withheld from him.
Petitioner's paychecks are unambiguous as to the amounts and
purpose of each "withholding". When workmen's compensation
insurance or loan payments were deducted from his weekly wages, a
notation was made on the left side of the check that money was
being subtracted as "2.10% Wo. Comp. Ins." or deducted as a "Loan
Payment". Petitioner was notified of each deduction in this
manner, and out of the 29 paychecks received by petitioner in
1989, not one indicated a deduction for Federal income tax.
Because the evidence reflects that no income tax was
actually withheld by Carolina Acoustical, petitioner remains
ultimately liable for his own taxes, and may not be credited with
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Last modified: May 25, 2011