Tax Type
Employer Income Tax Withholding
Individual Income Tax
Description
Liability of corporate officer
Topic
Collection of Delinquent Tax
Date Issued
08-30-1990
August 30, 1990
Re: §58.1-1821 Application: Sales, Withholding, and Litter Taxes
Dear******************
This will reply to your letter of July 31, 1989, on behalf of ************* (Taxpayer), seeking correction of sales, withholding, and litter tax assessments for the period January 1986 through April 1988.
FACTS
During the years in question, ********** (The Corporation) accrued sales, withholding, and litter taxes which are delinquent and owing to the department. ************** (The Taxpayer) was President of the Corporation during the years in question. Both the Taxpayer and the Corporation were assessed with the appropriate tax, interest and penalties. The Taxpayer contests the assessment contending that there are sufficient assets held by the Corporation or shareholders pursuant to transfers by the Corporation, to meet the amounts assessed, and efforts to collect from these sources must be exhausted by the department before the Taxpayer can be assessed.
DETERMINATION
Va. Code §53.1-1813 states that "[a]ny corporate officer who willfully fails to pay, collect, or truthfully account for and pay over any state tax...or willfully attempts in any manner to evade or defeat any such tax or the payment thereof...shall be liable for a penalty of the amount of the tax evaded, or not paid, collected or accounted for and paid over...".
The statute further states that the term "corporate officer" is defined as "... an officer or a corporation ...who as such officer... is under a duty to perform on behalf of the corporation the act in respect of which the violation occurs and had knowledge of failure...and had the authority to prevent such failure..."
There is no provision in the statute that requires the department to seek payment of the assessed amounts from a responsible officer only after efforts to obtain payment from the corporation has been exhausted. Rather, the statute provides the department with an additional tool for the collection of delinquent taxes owed by corporations. As such, the department may proceed not only against a responsible officer, but also against the corporation itself and other responsible officers until the original assessment against the corporation is satisfied in full.
Therefore, based upon all the foregoing, I find no basis for a correction of the assessment, which remains due and payable in full.
Sincerely,
W. H. Forst
Tax Commissioner.
Rulings of the Tax Commissioner