United States v. Hartman, No. 17-2273 (6th Cir. 2018)Annotate this Case
Hartman and Ott co-founded Spectrum Tool & Design and divided management responsibilities. Ott was supposed to handle the company’s payroll taxes, which required him to withhold federal taxes from employees’ wages and send the money to the IRS. When Spectrum encountered financial difficulties, however, Ott failed to pay the taxes several times in 2004 and 2005. Hartman continued to rely on Ott to pay the taxes even after discovering the delinquency. After Spectrum went bankrupt, the government sued Hartman to recover the unpaid taxes. The district court granted the government summary judgment. The Sixth Circuit affirmed, noting that Hartman “willfully” failed to pay Spectrum’s taxes. The government imposes personal liability for outstanding payroll taxes on anyone who was “required to” pay these taxes and “willfully” failed to pay the funds to the IRS, 26 U.S.C. 6672(a). Hartman acted willfully by repeatedly claiming to believe that Ott paid the taxes when he no longer had any plausible basis for thinking that was so. He knew of Ott’s past failures and had ample means to identify and remedy Ott’s misconduct.