Mary Johnson v. United States, 734 F.3d 352

Mrs. Johnson, sole shareholder and later chair/president of Koba Institute, was named in a § 6672 trust fund penalty arising from unpaid payroll taxes of Koba Institute and its related entities.
Koba Institute converted to a for-profit in 1998; Mrs. Johnson’s position and authority allowed her to influence corporate finances, despite delegating day-to-day control to Mr. Johnson from 2001–2004.
IRS assessed 100% trust fund recovery penalties against Mr. and Mrs. Johnson for 2001–2004 delinquencies; Mrs. Johnson later paid $351 toward her penalty.
Post-2004, Mrs. Johnson restructured oversight, required proof of payments, and Koba Institute began remitting payroll taxes, but 2001–2004 delinquencies remained unpaid.
District court granted summary judgment for the Government against both Johnsons; judgments reduced by future collections via an offer in compromise with Koba Institute.
This appeal challenges the district court’s liability determinations under § 6672 and the related calculations.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Mr. Johnson’s § 6672 assessment was timely under § 6501.	Johnson contends time-bar but offers little argument on law.	Government argues assessments timely under § 6501.	Appellate court declines to address; Johnson abandoned the challenge.
Whether Mrs. Johnson was a “responsible person” under § 6672.	Mrs. Johnson had limited day-to-day involvement and argues she was not responsible.	Record shows she had effective power over finances and control, despite delegation.	Yes; undisputed evidence shows Mrs. Johnson was a responsible person.
Whether Mrs. Johnson acted willfully in failing to pay over taxes.	She learned of delinquencies in 2004 and argues lack of willfulness.	Her continued payment to other creditors and benefits after learning of delinquencies shows willfulness.	Yes; willfulness established.
Whether the reported § 6672 amounts were properly calculated or disputed facts remained.	Bruette’s reports identified errors in assessments.	Johnsons did not rely on Bruette’s reports; no genuine dispute of material fact.	District court’s calculation upheld; no genuine issue.
Whether double recovery or credit issues affect the judgments.	Potential double recovery if IRS collected via offer in compromise.	Judgment order offsets by future collections; double recovery avoided by drafting.	No error; district court properly addressed credit/double-recovery concerns.

Slodov v. United States, 436 U.S. 238 (Supreme Court, 1978) (defines ‘responsible person’ and duties under § 6672; trust fund taxes treated as in trust)
O’Connor v. United States, 956 F.2d 48 (4th Cir. 1992) (role of status and authority in determining responsibility under § 6672; fact-based but can be decided on summary judgment)
Plett v. United States, 185 F.3d 216 (4th Cir. 1999) (recognizes pragmatic, substance-over-form approach to who is responsible)
Purcell v. United States, 1 F.3d 932 (9th Cir. 1993) (delegation does not erase responsibility under § 6672; authority matters)
Barnett v. IRS, 988 F.2d 1449 (5th Cir. 1993) (importance of effective power over finances; officer/director status can establish liability)