Jenson v. U.S., 93-3498

• Decision Date: 05 May 1994
• Docket Number: No. 93-3498,93-3498
• Citation: 23 F.3d 1393
• Parties: -1976, 94-1 USTC P 50,212, Unempl.Ins.Rep. (CCH) P 17787A Clark JENSON, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1393

23 F.3d 1393

73 A.F.T.R.2d 94-1976, 94-1 USTC P 50,212,

Unempl.Ins.Rep. (CCH) P 17787A

Clark JENSON, Appellant, v. UNITED STATES of America, Appellee.

No. 93-3498.

United States Court of Appeals Eighth Circuit.

Submitted April 11, 1994.

Decided May 5, 1994.

Counsel who presented argument on behalf of the appellant was Dana C. Bradford, III of Omaha, NE.

Counsel who presented argument on behalf of the appellee was Alice L. Ronk of the Tax Div., Dept. of Justice, Washington, DC.

Before RICHARD S. ARNOLD, Chief Judge, HENLEY, Senior Circuit Judge, and BEAM, Circuit Judge.

HENLEY, Senior Circuit Judge.

In this tax refund case, Clark Jenson appeals the district court's ¹ grant of summary judgment in favor of the United States. We affirm.

Jenson was the founder and president of Clark Jenson Nursery, Inc. (the Nursery). In 1984, he hired Deanna Tuttle to help with the company's bookkeeping. According to Jenson, he eventually turned all office matters over to Tuttle. In 1988, Tuttle began embezzling corporate funds, and as a result the Nursery failed to pay withheld employment taxes to the federal government. Jenson did not learn of Tuttle's actions until March 1989, at which time he arranged to fire her. The Nursery subsequently began making payments of approximately $10,000.00 per month to make up its tax deficit. However, the business was not financially successful, and the Nursery ceased operations in early 1990. A substantial portion of the 1988 tax deficiency remained unpaid.

On October 21, 1991, the Internal Revenue Service (IRS) assessed a penalty against Jenson under Sec. 6672 of the Internal Revenue Code (26 U.S.C.) for the unpaid amount plus interest. The assessment was based on a determination that Jenson was a responsible person who willfully failed to pay over the withheld taxes. Jenson paid a nominal amount and filed a claim for a refund. After the IRS denied the claim, Jenson sued in federal court. The government filed counterclaims against both Jenson and Tuttle, seeking payment of the remainder of the assessment. Jenson filed a cross-claim against Tuttle.

The government obtained a default judgment against Tuttle and then filed a motion for summary judgment against Jenson. The district court granted the motion and Jenson subsequently appealed to this court. ²

Appeals from summary judgment are reviewed de novo. Kolb v. Scherer Bros. Fin. Servs. Co., 6 F.3d 542, 544 (8th Cir.1993). Consequently, we must view the facts in the light most favorable to Jenson. Id. We will affirm the judgment of the district court only if we determine that there is no genuine issue of material fact and that the government is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

The ultimate issue in this case is whether Jenson is personally liable under 26 U.S.C. Sec. 6672 (1989), which provides in pertinent part as follows:

Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, ... be liable to a penalty equal to the amount of the tax evaded, or not collected, or not accounted for and paid over....

This court has held that an individual is liable under Sec. 6672 if he (1) is a "responsible person" who (2) "willfully" fails to pay over the taxes in question. Honey v. United States, 963 F.2d 1083, 1086 (8th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 676, 121 L.Ed.2d 598 (1992); Kizzier v. United States, 598 F.2d 1128, 1132 (8th Cir.1979). A corporate officer is responsible "if he has significant, albeit not necessarily exclusive, authority in the field of corporate decisionmaking and action where taxes due the federal government are concerned." Hartman v. United States, 538 F.2d 1336, 1340 (8th Cir.1976). Moreover, "he need not be an actual disbursing officer." Id.; see also Kenagy v. United States, 942 F.2d 459, 464 (8th Cir.1991) ("Responsible persons are those who have the status, duty and authority to avoid the corporation's default in collection or payment of the taxes."). A person acts willfully in this context if he " 'acts or fails to act consciously and voluntarily and with knowledge or intent that as a result of his action or inaction trust funds belonging to the government will not be paid over but will be used for other purposes.' " Olsen v. United States, 952 F.2d 236, 240 (8th Cir.1991) (quoting Hartman, 538 F.2d at 1341).

Jenson argues that if all inferences are drawn in his favor, as they must be, a jury could reasonably find that he was neither responsible nor willful. We disagree.

First, Jenson claims that he was not responsible for the payment of taxes during Tuttle's employment because she handled all of the Nursery's financial matters. However, his own deposition suggests otherwise. As we have stated, Jenson was the founder and president of the corporation. His family owned all of the company's stock, and he served on the board of directors throughout the corporation's existence. He retained the exclusive right to borrow on behalf of the corporation, and he had authority to fire all employees. Though Tuttle was given some discretion in hiring office personnel, Jenson remained involved in all such decisions. Both Jenson and Tuttle had authority to sign corporate checks, and Jenson himself generally signed payroll checks. Tuttle regularly consulted with Jenson regarding all major financial issues, such as accounts payable, accounts receivable and health...