- 2 -
Scharringhausen offered to compromise his tax bill for $750, but
the IRS returned his offer because he hadn’t paid his 2004 tax
bill either. His main argument is that this was an abuse of
discretion.
Background
Scharringhausen’s history of not paying his taxes reaches
back at least to the early ’90s--there is an outstanding judgment
against him for nearly $500,000 for unpaid income taxes for 1991
and 1992, and for trust-fund-recovery-penalty taxes for 1990 and
1991.1 He and some of the firms he controlled also had other
problems, and later in the decade he served a short sentence for
bankruptcy fraud. After being released, he went back into
business, but failed to file returns in 1999 and 2000. See
Scharringhausen v. United States, 91 AFTR 2d 651, 2003-1 USTC
par. 50,224 (S.D. Cal. 2003) (enforcing summons for records of
offshore credit card use).
1 Taxes that employers withhold from their employees’ wages
are known as “trust fund taxes” because they are deemed a special
fund in trust for the United States under section 7501(a).
Slodov v. United States, 436 U.S. 238, 243 (1978). The
Commissioner may collect unpaid employment taxes from a
“responsible person” within the company; i.e., someone who was
required to pay over the tax. The money that’s collected is
called a trust-fund-recovery-penalty tax. Sec. 6672. (Unless
otherwise indicated, all section references are to the Internal
Revenue Code and Regulations for the years at issue, and the one
Rule reference is to Rule 122 of the Tax Court Rules of Practice
and Procedure.)
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: March 27, 2008