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responsible person liability11 but do not find that situation
analogous or controlling with respect to the assessment of a
shareholder’s income tax on constructive dividend income.
The section 6672 penalty is used as a collection device by
assessment of unpaid employment tax against an individual as a
“responsible person”. The particular employment taxes are those
that had been collected from employees and, as such, are trust
fund taxes in the employer’s hands. Stallard v. United States,
12 F.3d 489, 493 n.6 (5th Cir. 1994). Accordingly, while the
assessment of responsible person penalties is separate for
purposes of collection, the underlying tax liability for a
section 6672 assessment is the same liability as the employer’s.
Since the assessment is “based on” the underlying liability of
the employer, the filing of the employer’s employment tax return
triggers the period of limitation applicable to the penalty.
In contrast, a C corporation’s income tax liability on its
net income (i.e., income less deductions) is separate and
distinct from the shareholder’s income tax liability on dividend
income received from it. Secs. 1, 11, 301; see also InverWorld,
Ltd. v. Commissioner, 98 T.C. 70, 82 (1992); S-K Liquidating Co.
v. Commissioner, 64 T.C. 713, 716-718 (1975). It follows that
11 See Jones v. United States, 60 F.3d 584, 589 (9th Cir.
1995); Stallard v. United States, 12 F.3d 489, 493 (5th Cir.
1994); Howard v. United States, 868 F. Supp. 1197, 1200 (N.D.
Cal. 1994).
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