The U.S. Tax Court has upheld trust fund recovery penalties that were imposed against a hospital chief administrator after the hospital’s payroll taxes weren’t paid over to the IRS. The long-time hospital employee was deemed a “responsible person” who was personally liable for $25,905 in penalties. The court found she had oversight and check-signing authority for the hospital’s bank accounts and acted willfully in preferring other creditors ahead of the IRS while knowing taxes were going unpaid. She argued that the controller exercised greater financial control over hospital funds, but the court stated that didn’t negate her responsible-person status. (TC Memo 2021-123)


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