Employer Liable for Employee’s Delinquent Taxes; Failed to Obey IRS Wage Levy

A corporation that failed to obey an IRS wage levy on one of its employees was liable for the employee’s delinquent taxes and for a penalty under Code Sec. 6332(c)(2). The government complied with the notice requirements of Code Sec. 6331(a) by sending notices of levy to the corporation’s correct address and also served the final demand for payment on the corporation. The corporation failed to assert any recognizable defenses for failure to honor to the levy. Therefore, the corporation was liable for its employee’s outstanding tax liabilities noticed in the levy.

Additionally, the corporation failed to establish reasonable cause for its failure to honor the levy. The corporation’s argument that it’s Chief Financial Officer, who was responsible for responding to the notices, suffered from mental health breakdown and that it was unaware that he ignored the notices, was not reasonable cause.

Heli USA Airways, Inc., DC Nev., 2011-2 ustc ¶50,728