Westerman v. United States, No. 12-1943 (8th Cir. 2013)
Annotate this CasePlaintiff, president and owner of WestCorp, sued the government for a refund of an IRS tax penalty that he paid. At issue was the treatment of admittedly incomplete payments WestCorp made from 2000-2001. To maximize its recovery, the IRS applied those payments first toward WestCorp's non-trust fund taxes rather than dividing the payments proportionally between WestCorp's trust fund and non-trust fund taxes. The court agreed with the district court that the undisputed facts show, as a matter of law, that plaintiff willfully failed to pay the trust fund taxes at issue; the court also agreed with the district court that the IRS properly allocated the undesignated payments at issue; and the court rejected plaintiff's contention that the IRS should nonetheless have applied at least part of the undesignated payments toward WestCorp's trust fund obligations. Accordingly, the court affirmed the judgment.
Court Description: Civil Case - Tax. District court's grant of summary judgment to government in action to recover tax assessment for unpaid trust fund from business officer under IRC section 6672 is affirmed. Evidence was sufficient that Westerman willfully failed to pay the ratable trust fund portion of WestCorp's five payments and used after-acquired funds to pay creditors and suppliers instead of the IRS, that he failed to designate in writing how the IRS should apply the payments received, and that IRS was well within its statutory and common-law rights to apply the payments in the treasury's best interest.
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