Kinnie V. United States

MILBURN, Circuit Judge. Plaintiff William A. Kinnie appeals the district court's grant of summary judgment in favor of defendant United States of America in Kinnie's action seeking recovery of penalties assessed and collected by the Internal Revenue Service ("IRS") under 26 U.S.C. § 6672. On appeal, the issues are (1) whether Kinnie was a responsible person who willfully failed to pay to the United States income and social security taxes withheld from the wages of the employees of the business in which Kinnie owned fifty percent and was the vice-president, (2) whether the district court erred when it entered judgment against Kinnie for an amount that exceeded the cash on hand of the corporation on the date that Kinnie acquired notice that the corporation had not been paying or remitting withholding and social security taxes to the IRS, and (3) whether the district court correctly held that the IRS was authorized to allocate his business employment tax payment between the trust fund portion and non-trust fund portion of the corporation's employment tax liability in the manner in which the government deemed to be in the best interests of the United States, in the absence of a written designation by the corporation as to how its payments should be applied. For the reasons that follow, we affirm.