CROMPTON-RICHMOND CO., Inc., Factors, Plaintiff, v. UNITED STATES of America, Defendant. UNITED STATES of America, Defendant and Third Party Plaintiff, v. Bernard MONDRY, Anne Mondry, Vincent De Sousa and Philip Pushkin, Third-Party Defendants, 311 F. Supp. 1184

Summary

The corporate taxpayer was assessed a penalty tax for a bankrupt corporation's failure to pay withholding income and employment taxes. The corporate taxpayer paid the tax and later sued for a refund. The United States asserted that several individuals were also liable for the penalty tax, and it filed a third-party complaint against them. One individual taxpayer filed a motion for summary judgment, asserting that he had been given an abatement of the tax penalty. The court denied the motion. The court held that the abatement issued by the Internal Revenue Service (IRS) was an administrative error. Upon discovering its mistake, the IRS had immediately retracted the abatement. The court ruled that the abatement could properly be retracted because it was issued under I.R.C. § 6404(c) rather than I.R.C. § 6404(a)(1). Furthermore, the court found that the abatement was not in response to any protest by the individual taxpayer and was not made after reconsideration of his liability. The ...