Sinder v. U.S.

Decision Date04 August 1981
Docket Number79-3194,Nos. 79-3193,s. 79-3193
Citation655 F.2d 729
Parties81-2 USTC P 9612 Alfred M. SINDER, Plaintiff-Appellant, Cross-Appellee, v. UNITED STATES of America, Defendant-Appellee, Cross-Appellant, and Angelo Ventrone, Third-Party Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Irvin H. Harlamert, Jr., Dayton, Ohio, for plaintiff-appellant, cross-appellee.

Vicki G. Cheikes, Robt. Bernstein Tax Division, U. S. Dept. of Justice, M. Carr Ferguson, Gilbert E. Andrews, Libero Marinelli, Jr., Washington, D. C., William R. Martin, Asst. U. S. Atty., Dayton, Ohio, for defendant-appellee, cross-appellant.

Before LIVELY and KENNEDY, Circuit Judges, and CECIL, Senior Circuit Judge.

PER CURIAM.

Plaintiff-appellant Sinder appeals the decision of the District Court that he is a responsible party liable for Republic Communications, Inc.'s unpaid employees' withholding taxes for the first quarter of 1971. The Internal Revenue Service assessed a tax deficiency against Sinder for failure to pay over taxes withheld from employees' wages during the fourth quarter of 1971 and the first quarter of 1972. Sinder made a partial payment for each quarter and sued for a refund. The government counterclaimed for the remainder of the taxes owing. Sinder sued third-party defendant Ventrone for the amount owing as unpaid taxes.

The District Court found that Sinder was a responsible party for the first quarter for 1972 and thus was liable under 26 U.S.C. § 6672 for the failure to pay over the withheld taxes on wages for the first quarter of 1972 to the government. It found by a preponderance of the evidence that at no time during the last quarter of 1971 did he exercise any control over Republic's business. Further, it held that there was no evidence to establish that when Sinder had control in 1972, Republic had funds with which to pay back taxes owing from last quarter 1971. It held that the government had the burden of proving Sinder was a responsible party and in the absence of evidence of available funds it failed to meet its burden of proof. Sinder was therefore not liable for the unpaid taxes from 1971. As there is no right of indemnity or contribution under § 6672, Sinder's claim against Ventrone was dismissed.

Sinder appeals the District Court's judgment insofar as it holds him liable for the taxes unpaid in 1972 and dismisses his third-party claim against Ventrone. The government appeals the holding that it had the burden of proving Sinder was a responsible party for 1971 and that it failed to meet its burden.

When a party pays part of the penalty existing for failure to pay withheld taxes and the government counterclaims for the remainder of the refund, the taxpayer has the burden of proving that the assessment was wrong. The assessment is presumed to be correct. Therefore, the taxpayer has the burden of showing that he was not a responsible party on both the refund claim and the counterclaim. See Fidelity Bank, N.A. v. United States, 616 F.2d 1181, 1186 (10th Cir. 1980); Bolding v. United States, 565 F.2d 663, 672 (Ct.Cl.1977); Anderson v. United States, 561 F.2d 162, 165 (8th Cir. 1977); Kiesel v. United States, 545 F.2d 1144, 1146 (8th Cir. 1976) (per curiam); Liddon v. United States, 448 F.2d 509, 513-14 (5th Cir. 1971), cert. denied, 406 U.S. 918, 92 S.Ct. 1769, 32 L.Ed.2d 117 (1972); Psaty v. United States, 442 F.2d 1154, 1159-60 (3d Cir. 1971); Lesser v. United States, 368 F.2d 306, 310 (2d Cir. 1966) (en banc).

Sinder admits in his brief that the taxpayer has the burden of proving he was responsible on a counterclaim. He cites United States v. Molitor, 337 F.2d 917 (9th Cir. 1964). That case states that the Commissioner may merely submit the assessment to make a prima facie case. But if the taxpayer shows the assessment was not correct, the burden shifts back to the government to maintain and establish the correctness of the assessment. Sinder would characterize this as a burden of producing evidence that shifts to the taxpayer. He argues he did come forward with evidence that he was not responsible and the government must then prove the assessment was correct. However, the burden on the taxpayer is not merely a burden of producing evidence; it is a burden of persuasion by the preponderance of the evidence that the assessment is not correct. Only if that is shown must the government show, on its counterclaim, what the correct assessment is. See Higginbotham v. United States, 556 F.2d 1173, 1175 (4th Cir. 1977).

In the present case, the District Court found by the preponderance of the evidence that Sinder was not a responsible party for the last quarter of 1971 with respect to exercising control over Republic during that quarter but was a responsible party for the first quarter of 1972. As this Court cannot find these findings to be clearly erroneous, they must be upheld. Rule 52(a), Fed.R.Civ.Pro. As a matter of law, then, because of the burden of persuasion, Sinder has met his burden...

To continue reading

Request your trial
84 cases
  • In re Walters
    • United States
    • U.S. Bankruptcy Court — Northern District of Indiana
    • June 27, 1994
    ...the party on whom it was originally cast. The assessment of the Internal Revenue Service is presumptively correct. Sinder v. United States, 655 F.2d 729, 731 (6th Cir.1981); Compton v. United States, 334 F.2d 212, 216 (4th The Seventh Circuit Court of Appeals in Ruth v. United States, 823 F......
  • Wetzel v. US
    • United States
    • U.S. District Court — Southern District of Mississippi
    • March 26, 1992
    ...made proves the contrary by a preponderance of the evidence. See Psaty v. United States, 442 F.2d 1154 (3rd Cir.1971); Sinder v. United States, 655 F.2d 729 (6th Cir.1981); Sherman v. United States, 490 F.Supp. 747 (E.D.Mich.1980); Liddon v. United States, 448 F.2d 509, 513-14 (5th Cir.1971......
  • US v. Cope, Civ. A. No. C86-0051P(J).
    • United States
    • U.S. District Court — Western District of Kentucky
    • October 23, 1987
    ...made against them. They therefore failed to meet their burden of proving that the assessments were incorrect. Sinder v. United States, 655 F.2d 729, 731 (6th Cir. 1981). In accordance with the foregoing, the court concludes that the assessments against Cope and Quality are valid and that Co......
  • In re Associated Bicycle Service, Inc.
    • United States
    • U.S. Bankruptcy Court — Northern District of Indiana
    • September 25, 1990
    ...Ruth v. United States, 823 F.2d 1091 (7th Cir.1987); Psaty v. United States, 442 F.2d 1154, 1158-59 (3rd Cir.1971); Sinder v. United States, 655 F.2d 729, 731 (6th Cir.1981); United States v. Garm, 114 B.R. 414 (Bankr.M.D. Pa.1990). After the introduction by the government of its assessment......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT