Resolving Uncoordinated Cross Border Directorship Liabilities and Statutory Payroll Default Risk
Cross-border directorship liabilities require ring-fenced local statutory payroll escrows and Side-A DIC insurance to protect directors from default.
Internal Revenue Code 6672
Meaning
Federal tax enforcement statutes in the United States grant the Internal Revenue Service authority to assess personal liability against corporate managers who fail to collect and remit trust fund taxes. Internal Revenue Code 6672 creates a direct personal penalty equal to one hundred percent of unpaid employee federal income and social security withholdings. Personal assessment under this statutory section targets withheld payroll funds but excludes direct corporate income tax debts.
Enforcement Protocol
Revenue agents conduct administrative interviews and examine corporate bank signature cards and payroll authorizations to identify responsible officers. Assessing liability under Internal Revenue Code 6672 requires the tax agency to demonstrate that the targeted individual acted willfully in neglecting tax obligations. Notice of proposed assessment forms give corporate officers administrative appeal rights before formal tax assessments are entered.
Paying a portion of the tax allows the individual to file a refund suit in federal district court to contest liability.
Responsibility Standard
Individual liability requires both status as a responsible party with financial decision-making authority and willful payment of other creditors over the government. Applying Internal Revenue Code 6672 does not require malicious intent, as deliberate preference of commercial suppliers over tax debts satisfies the legal test. Authority to sign checks creates a presumption of responsibility.
Collection Remedy
Federal tax liens attach to personal real estate and bank accounts belonging to target individuals. Penalties under Internal Revenue Code 6672 are non-dischargeable in personal bankruptcy proceedings. Tax authorities enforce collection through direct asset seizure.