MEMORANDUM
Before the court is the government’s motion for summary judgment. Briefs have been filed and the motion is ripe for disposition.
Background
Plaintiff filed the instant action seeking to recover certain funds paid to the Internal Revenue Service (“IRS”). The funds were paid in partial satisfaction of certain assessments made against Plaintiff for allegedly failing to pay employment withholding taxes owing to the government.
Plaintiff is a certified public accountant and a former employee, officer and director of Turning Basin, Inc., a holding company which acquired other operating corporations through leveraged buyouts. In November 1979, after having worked for Turning Basin as an outside consultant, Plaintiff joined the company as Controller. In 1980, Plaintiff became an officer of Turning Basin when he was elected Treasurer and also became a member of the company’s Board of Directors. Sometime in 1981, Plaintiff received 40,000 shares of Turning Basin stock.
Plaintiffs responsibilities throughout this period included supervising the other accountants and bookkeepers at the company, preparing financial statements and reports on corporate subsidiaries, consolidating reports and balance sheets for semi-annual reports, assisting outside accounting firms with annual audits, preparing and filing cоrporate tax returns, and participating in the hiring and firing of employees in his department. Plaintiff was an authorized signatory on all corporate accounts. With Arthur Tuehinsky, Chairman of the company’s Board of Directors, Plaintiff had primary responsibility for payroll. Plaintiff wrote most of the payroll checks and checks to other creditors himself.
During 1981 and thereafter, Turning Basin experienced cash-flow problems. During the secоnd quarter of 1981, Turning Basin failed to turn over to the IRS all of the funds due the IRS for employee withholding taxes. Subsequently, the IRS filed a notice of assessment against and demanded payment from Turning Basin and certain of its officers, including Plaintiff.
The assessment against Plaintiff was made pursuant to the 100 percent penalty provision *914 of the Internal Revenue Code, 26 U.S.C. § 6672. Section 6672 provides for the assessment of a 100 percent penalty against individuals determined to be “responsible for the failure to turn employee withholding taxes over to the government.” 26 U.S.C. § 6672.
Plaintiff paid $4024.26 toward the assessment and filed the instant action to obtain a refund. Shortly thereafter, the government filed a counterclaim against Plaintiff for $14,-456.52 plus interest which it claims Plaintiff also owes to the government under the penalty provision. The government has moved for summary judgment with respect to Plaintiffs claim and its counterclaim.
Discussion 1
I. Summary Judgment Standards
The Third Circuit Court of Appeals has capsulized the standards for the award of summary judgment under Federal Rule of Civil Procedure 56:
Summary judgment may be entered if “the pleadings, deposition[s], answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). An issue is “genuine” only if the evidence is suсh that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc.,477 U.S. 242 [247-49]106 S.Ct. 2505 , 2510,91 L.Ed.2d 202 (1986); Equimark Comm. Finance Co. v. C.I.T. Financial Serv. Corp.,812 F.2d 141 , 144 (3d Cir.1987). If evidence is “merely colorable” or “not significantly probative” summary judgment may be granted. Anderson, [477 U.S. at 249-51 ]106 S.Ct. at 2511 ; Equimark,812 F.2d at 144 . Where the record, taken as a whole, could not “lead a rational trier of fact to find for the non-moving party, summary judgment is proper.” Matsushita Elec. Indus. Co. v. Zenith Radio,475 U.S. 574 , [586-88]106 S.Ct. 1348 , 1356,89 L.Ed.2d 538 (1986).
Hankins v. Temple Univ.,
II. Liability under the 100 Percent Penalty Provision
Under the Internal Revenue Code, employers are required to withhold from the wages of their employees income and social security tаxes and to hold such taxes in trust for the United States. 26 U.S.C. §§ 3102, 3402, 7501. Employers who fail to collect or turn over such funds to the United States are hable for a penalty (the “100 percent penalty”) in the amount of the funds that should have been withheld and paid to the United States. 26 U.S.C. § 6672. The Third Circuit recently outlined certain principles applicable to a challenge to the assessment of such a penalty:
Section 6672(a) provides that a person responsible for withholding and paying over taxes who willfully fails to do so is hable for a penalty equal to the total amount of the unpaid taxes. A section 6672 assessment against a responsible person is equivalent to the assessment of a tax. 26 U.S.C. § 6671(a) (West 1989); see In re Ribs-R-Us, Inc.,828 F.2d 199 , 200 (3d Cir.1987). Once the IRS assesses a tax, a rebuttable presumption arises that the assessment is correct. Psaty v. United States,442 F.2d 1154 , 1160 (3d Cir.1971). Thus, the IRS’s introduction of certified copies of the assessment before the district court shift[s] to [the taxpayer] the burden of going forward with evidence to show *915 that the assessment against him under section 6672 was incorrect by establishing either (1) that he was not a responsible person within the meaning of the statute, or (2) that he did not willfully fail to pay the amount due to the IRS. Id.; Quattrone Accountants, Inc. v. IRS,895 F.2d 921 , 927 (3d Cir.1990).
Brounstein v. United States,
In this case, there is no dispute that the IRS has made the above assessments and that Turning Basin owed the taxes. 2 (Counterclaim at ¶3; Reply at ¶3.) The оnly material dispute relates to whether (1) Plaintiff was a “responsible person” within the meaning of § 6672 and (2) whether Plaintiff “willfully” failed to turn over the taxes due. The government contends that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law; Plaintiff, on the other hand, asserts that issues of material fact exist which preclude the entry of judgment in favor of the government.
A. “Responsible Persons” Under § 6672
Under § 6672, responsibility is “a matter of status, duty, or authority, not knowledge,” and requires that a party have significant, though not necessarily exclusive, control over corporate finances before liability can be imposed.
Brounstein,
(1) contents of corporate bylaws, (2) ability to sign checks on the company’s bank account, (3) signature on the employer’s federal quarterly and other tax returns, (4) payment of other creditors in lieu of the United States, (5) identity of officers, directors, and principal stockholders in the firm, (6) identity of individuals in charge of hiring and discharging employees, and (7) identity of individuals in charge of the firm’s financial affairs.
Brounstein,
In support of its motion for summary judgment, the government has presented a certified copy of the notice of assessment and evidence of a demand for payment, as well as substantial evidence with respect to the above factors.
Certain evidence is uncontroverted. First, Plaintiff was an authorized signatory and had the legal power to sign checks on all of Turning Basin’s corporate checking accounts. (Greenberg Dep.Tr. аt 29, 31.) In fact, Plaintiff signed most of the payroll cheeks issued during his tenure at Turning Basin and signed checks to other creditors, including the United States. (Greenberg Dep.Tr. at 31, 40.) Second, Plaintiff prepared and signed Turning Basin’s federal employment tax statements and returns. (Plaintiff’s Counter-Statement of Facts at ¶ 24.) Third, during the relevant time period, Plaintiff was an officer and member of Turning Basin’s Board of Directors. (Id. at ¶¶ 8, 10.) During that same time period, Plaintiff also held 40,000 shares of Turning Basin stock. (Id. at ¶ 9.)
Fourth, Plaintiff was aware of the employment tax delinquency as soon as it arose. (Id. at ¶ 25.) Subsequently, he wrote cheeks to pay other creditors, knowing that the tax liabilities to the United States were still owing. (Greenberg Dep.Tr. at 44-45, 48-49.) Fifth, Plaintiff was in charge of Turning Basin’s accounting department which included a bookkeeper and another accountant. (Plaintiffs Counter-Statement of Facts at ¶7.) Accordingly, he supervised thе employee who received and reconciled the checking account *916 statements. (Id. at ¶ 16.) Sixth, Plaintiffs duties included those of an office manager. (Greenberg Dep Tr. at 14-15.) As such, he played a role in the hiring and firing of employees, conducting screening interviews and providing input regarding appropriate salary levels. (Id.) The above admissions provide substantial evidence of Plaintiffs control and responsibility for Turning Basin’s financial and other affairs.
In spite of these undisputed facts, Plaintiff claims that he did not have sufficient control over Turning Basin’s affairs to be a “responsible person” under § 6672. Plaintiff bases this claim on the following assertions: (1) Arthur Tuchinsky had the final say over which bills were paid and that Plaintiff would be fired if he did not pay the bills as directed by Tuchinsky; and (2) Tuchinsky promised to pay the federal tax liabilities and Plaintiff believed that they would be paid. Assuming for purposes of the instant motion the facts as stated by Plaintiff, these defenses are unavailing.
First, § 6672 “does not confine liability for the unpaid taxes only to the single officer with the greatest or the closest control or authority over corporate affairs.”
Denbo v. United States,
In a recent case, the Third Circuit addressed claims very similar to those made by Plaintiff in this case.
Brounstein,
Plaintiff attempts to distinguish Brounstein, arguing that Brounstein was president of the company and “had complete discretion in signing checks for the corporation.” (Opposition Brief at 23-24.) This statement is inaccurate. Nowhere in Brounstein does the court indicate that the taxpayer had complete discretion to sign checks for the corporation. Rather, the court found only that Brounstein had authority to pay for C.O.D. deliveries without consulting with Heyer, the managing principal. However, this does not appear to be a momentous power. First, there is no evidence that Brounstein had the authority to order the goods that were delivered C.O.D. Second, there is no indication that the goods shipped C.O.D. were of substantial value in absolute terms or relative to overall corporate expenditures.
To the extent that Plaintiff’s claim regarding Brounstein’s power has some validity, it does not help him. Brounstein did have the legal authority to write checks on his company’s accounts. Yet, Plaintiff in the instant case had the same legal authority, as he was *917 an authorized signatory on all corporate accounts and had and exercised the power to issue cheeks under his signature alone.
At bottom, Plaintiffs defense to this motion is akin to a “Nuremberg Defense.”
See Brounstein,
Nor is it a defense that Plaintiff thought or hoped that Tuehinsky would eventually come up with the money to pay the taxes owed.
Denbo v. United States,
The cases cited by Plaintiff do not persuade the court otherwise. In fact, one case cited by Plaintiff directly contradicts Plaintiffs position and the proposition for which it is cited.
In re Terrell,
United States v. Berg,
78-2 U.S.Tax Cas. (CCH) ¶ 9601,
Cross v. United States,
87-2 U.S.Tax Cas. (CCH) ¶ 9634,
However, the Cross court rejected the attempts of Cross and Arcenaux “to hide in the shadow of Armel,” the other incorporator who apparently had the final say in most corporate matters. “Both abdicated their responsibilities by claiming reliance on Armel, even though Armel demonstrated a propensity to ignore legal liabilities.” Id. at *6. Arcenaux was found liable in spite of his protestations that Armel and, to a lesser extent, Cross, held all the real power in the corporation and the fact that Arcenaux did not have authority to issue checks from many of the corporate accounts. Accordingly, this case provides little support for Plaintiffs position.
In sum, the court concludes that, as a matter of lаw, Plaintiff was a “responsible” person within the meaning of § 6672.
B. “Willful” Under § 6672
In its brief in support of its summary judgment motion, the government has accurately summarized the case law relevant to willfulness under § 6672:
The United States Court of Appeals for the Third Circuit has stated that “willfulness,” under section 6672, means a “voluntary, conscious, and intentional decision to prefer other creditors over the Government.” Quattrone,895 F.2d at 928 . “A responsible person acts willfully when he pays other creditors in preference to the IRS knowing that taxes are due.” Brounstein,979 F.2d at 956 ; Quattrone,895 F.2d at 928 ; United States v. Vespe,868 F.2d 1328 , 1334 (3d Cir.1989). “The individual’s bad purpose or evil motive in failing to collect and pay the taxes ‘properly play no part in the civil definition of willfulness.’ ” Hochstein v. United States,900 F.2d 543 , 548 (2d Cir.1990) [ ]. “A responsible person also can act willfully if he pays other creditors with reckless disregard for whether taxes have been paid.” Quattrone,895 F.2d at 928 . In this context, “[rjeckless disregard includes the failure to investigate or correct mismanagement after being notified that withholding taxes have not been paid.” Morgan v. United States,937 F.2d 281 , 286 (5th Cir.1991) [ ].
“Willfulness,” for purposes of section 6672, merely means a voluntary, conscious and intentional act, and any payment to other creditors, including the payment of net wages to the corporation’s employees, with knowledge that the employment taxes are due and owing to the Government, constitutes a willful failure to pay taxes. Datloff v. United States, [252 F.Supp. at 32-33 , aff'd,370 F.2d 655 ] (3d Cir.); Hochstein v. United States,900 F.2d at 548 (2d Cir.); Morgan v. United States,937 F.2d at 285-86 (5th Cir.); Gephart v. United States,818 F.2d at 475 (6th Cir.); Emshwiller v. United States,565 F.2d 1042 , 1045 (8th Cir.1977); Davis v. United States,961 F.2d 867 , 869 (9th Cir.1992) [, cert. denied, [— U.S.-],113 S.Ct. 969 ,122 L.Ed.2d 124 (1993) ]. Knowledge of the unpaid liability, and the failure to pay the liability when the corporation had the funds to do so, is all that is necessary to establish willfulness as a matter of law. Gephart, [818 F.2d] at 475[ ]. It is irrelevant that the funds were disbursed in order to keep the corporation in business. [ ]It is no defense that the corporation was in financial distress and that the funds were spent to keep the corporation in busi *919 ness with the expectation that sufficient revenue wоuld later become available to pay the United States.[] Emshwiller v. United States,565 F.2d at 1042 (8th Cir.1977). Accord, Hochstein,900 F.2d at 548-49 . Nor is it a defense that he would lose his job if he signed a cheek to the IRS without the express authority of a superior (no Nuremberg Defense). Brounstein,979 F.2d at 956 . In addition, the assurance of others that the taxes will be taken care of is also no defense. Denbo v. United States,988 F.2d 1029 , 1033-34 (10th Cir.1993).
(United States Brief in Support at 18-20.) 3
In this ease, Plaintiff admittedly paid other creditors at a time that he knew taxes were due to the United States. (Greenberg Dep. Tr. at 44-45.) Well after he knew that taxes were due the United States, Plaintiff continued to sign payroll checks and checks to other creditors to keep the business afloat.
(Id.
at 4445, 47-49.) The fact that Tuchinsky told Plaintiff what bills to pay or insisted that the tax bills would be paid is no defense.
Brounstein,
Plaintiffs claims that even if he had defied Tuehinsky and written checks to the United States, there would not have been sufficient funds to cover the checks because Tuehinsky put funds into Turning Basin accounts only on an “as-needed” basis. However, there is no question that Plaintiff wrote payroll cheeks and checks to other creditors during the period in which taxes were overdue. Funds were deposited to cover these payments. Because Plaintiff knew that taxes were due to the United States and paid these other bills instead of the United States, Plaintiffs failure to pay taxes due was “willful” within the meaning of § 6672.
Accordingly, the United States is entitled to summary judgment both with respect to Plaintiffs claim and to its counter-claim. 4 An appropriate order will be entered.
ORDER AND JUDGMENT
In accordance with the accompanying memorandum, IT IS HEREBY ORDERED THAT:
(1) The government’s motion fоr summary judgment is GRANTED:
1. Judgment with respect to Plaintiffs claim for a refund of taxes paid is entered in favor of the government.
2. Judgment with respect to the United States’ counterclaim is entered in favor of the United States and against Plaintiff in the amount of $14,456.52 plus interest.
(2) The clerk of court is directed to close the file.
. Plaintiff's argument that Defendant's motion should be dismissed as untimely has no merit. While Defendant’s motion was filed one day after the deadline specified in this court’s February 10, 1993 scheduling order, the date sрecified in that order, May 31, 1993, was a federal holiday. Accordingly, Defendant's motion is timely under Federal Rule of Civil Procedure 6.
Notes
. Though Plaintiff disputes the actual date of the assessment, that does not appear to be material to the issues raised in the instant motions.
. Throughout the quoted section, the court has altered citations forms, omitted citations to other cases, and corrected the quotation where noted by brackets. The court has also omitted the word "supra” where used in the original to refer to previously cited cases.
. Plaintiff has not disputed the amount of the assessments.