A U.S. Court of Appeals ruled against a hospital administrator and held her liable for trust fund recovery penalties (TFRPs) assessed by the IRS. The administrator was responsible for payroll, as well as signing and reviewing checks. She also knew that the financially troubled hospital wasn’t paying withholding taxes to the IRS. Instead of prioritizing paying taxes, as required by law, she paid vendors and employees’ wages. The court ruled that the reasonable cause defense didn’t apply to her. She forfeited arguments that the IRS “abused its discretion and violated her due process rights” because she didn’t raise them before the U.S. Tax Court in the original case. (Cashaw, CA-5, 5/31/23)
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