The opinion of the court was delivered by: Wayne R. Andersen District Judge
MEMORANDUM OPINION AND ORDER
This case comes before the court on the United States of America's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the following reasons, the motion for summary judgment is granted.
Defendant, Sven O. Johnson, is an Illinois resident and the owner of Sven O. Johnson Associates, Inc. ("SJA, Inc."). The government contends that defendant failed to collect, truthfully account for, and pay over to the Internal Revenue Service ("IRS") federal income taxes and Federal Insurance Contribution Act ("FICA") contributions due from the employees of SJA, Inc. for the ten quarterly corporate tax periods ending on: September 30, 1988; December 31, 1988; March 31, 1990; June 30, 1990; September 30, 1990; December 31, 1990; March 31, 1991; June 30, 1991; September 30, 1991; and December 31, 1991. The government further contends, and defendant admits, that defendant was a person responsible for collecting, truthfully accounting for, and paying over these withheld taxes and FICA contributions. The government contends, and defendant does not deny, that these allegedly withheld taxes and contributions amounted to a sum total of $21,619.68 on February 11, 1994, the date of the assessment.
On December 17, 1992, defendant stated in a Report of Interview that he was aware of the delinquent taxes and "filed returns however did not pay" because he was "unable to pay." On February 11, 1994, a delegate of the Secretary of the Treasury of the United States of America made an assessment against defendant in the amount of $21,619.68 pursuant to 26 U.S.C. §6672. The government contends that interest and other amounts have accrued according to law since that date.
On January 9, 2002, defendant requested a "Collection Due Process". That request was denied, and defendant appealed the decision of the Collection Due Process hearing officer. On September 30, 2004, defendant's appeal was denied. The government filed this lawsuit on March 15, 2005 to recover defendant's alleged debt.
On April 29, 2007, while this lawsuit was pending, defendant received certificates of release of federal tax liens, which stated that he "has satisfied the taxes.and all statutory additions." Cynthia Brown, a Technical Services Advisor employed by the IRS, has stated in a declaration that these certificates of release were issued in error and that the releases have either been revoked or are presently being revoked.
Defendant raises two defenses to this lawsuit. First, he contends that because the government inadvertently released the liens on his property, any amount he owes to the government has been erased. Second, the defendant contends that he is entitled to a set-off for engineering services work that his company, SJA, Inc., performed on a sewer and sewage treatment facility in Elwood, Illinois. Specifically, defendant contends that he is entitled to $29,775.38 in service charges, which the Village of Elwood has allegedly failed to pay and that this alleged debt should offset any judgment against him for withheld taxes to the federal government.
Based on these facts, the United States has moved for summary judgment pursuant to Federal Rule of Civil Procedure 56.
In assessing a Rule 56 motion for summary judgment, the court must determine whether there are genuine issues of disputed material facts and whether the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 319 (1986). The court views all facts and inferences in the light most favorable to the non-moving party. Id.
Even viewed in this light, there remains no issue of material fact that could suggest that defendant is not indebted to the United States for the claimed amount of withheld taxes, which is $21,619.68 plus interest. The undisputed evidence shows that defendant, as President and sole owner of SJA, Inc., failed to pay federal income and FICA taxes to the government that he withheld from the employees of SJA, Inc. for the last two quarters of 1988, all four quarters of 1990, and all four quarters of 1991. Defendant admits, both in his Answer and in his deposition, that he was responsible for collecting, truthfully accounting for, and paying over SJA, Inc.'s trust fund taxes for the ten corporate tax periods at issue in this case.
Moreover, there is no dispute that defendant's failure to pay over the withheld federal taxes was willful. In the context of § 6672, a "willful" failure to pay over trust fund taxes is simply a voluntary, conscious, or intentional decision not to remit those taxes. Monday v. United States, 421 F.2d 1210, 1216 (7th Cir. 1970). The failure must be more than accidental, but even a reckless disregard of an obvious risk that the trust fund taxes may not be paid suffices. Id. at 1215-16.
Thus, proof of bad motive or an intent to defraud the United States is not required. Id. at 1216. Moreover, if a responsible party pays other creditors after he has learned that the trust fund taxes have not been remitted to the IRS, the "willful" requirement is met. ...