         In the United States Court of Federal Claims
                                       No. 14-106T
                                Filed: December 13, 2016
    * * * * * * * * * * * * * * *               *
    MARK V. NOFFKE,                             *
                                                *       Trial; Tax; 26 U.S.C. § 6672;
                        Plaintiff,              *       Responsible Person; Willfulness.
                v.                              *
                                                *
    UNITED STATES,                              *
                                                *
                        Defendant.              *
                                                *
    * * * * * * * * * * * * * * *               *

       Michael E. Shaff, Irvine Venture Law Firm, LLP, Irvine, CA.

       S. Starling Marshall, Trial Attorney, Court of Federal Claims Section, Tax
Division, United States Department of Justice, Washington, D.C. for the defendant. With
her were Brian J. Sullivan, Trial Attorney; Court of Federal Claims Section; G. Robson
Stewart, Assistant Chief, Court of Federal Claims Section, David I. Pincus, Chief, Court
of Federal Claims Section and Caroline Ciraolo, Deputy Principal Deputy Assistant
Attorney General, Tax Division, United States Department of Justice.

                                       OPINION
HORN, J.

         The plaintiff, Mark V. Noffke, brought suit in the United States Court of Federal
Claims to recover funds for all four quarters of 2009, after the Internal Revenue Service
(IRS) determined that plaintiff was a responsible person to pay employment taxes for
BOOMj.com, Inc. (BOOMj),1 and “plaintiff paid the trust fund portion of the employment
tax for one employee for the first, second, third and fourth quarters of 2009 for BOOMj.”
Mr. Noffke seeks the refund of the employment taxes paid, and the government has
counterclaimed for the unpaid portions of the assessments. A trial was held and post-
trial briefings on the legal and factual issues raised in the case were filed by both parties.
After a review of the trial testimony, the exhibits entered into the record, and the
submissions filed by the parties, the court makes the following findings of fact.


1 As the parties have stipulated, “BOOMj changed its name to ‘Beyond Commerce, Inc.’
in December of 2008, but continued to be referred to as ‘BOOMj’ and ‘Beyond
Commerce.’” As the parties typically refer to the corporation as BOOMj, the court also
does so in this opinion, unless quoting from a document or the trial transcript.
                                    FINDINGS OF FACT

         The plaintiff, Mark J. Noffke, has been a certified public accountant since 1980.2
At trial, plaintiff explained that:

       I’m an accountant, CPA. I’ve been in the accounting industry since 1977.
       I’ve run public companies. I’ve been involved with many types of
       transactions, start-ups, but the majority of the start-ups I’ve been involved
       with are companies that deal in the public arena. I’ve gone through a lot of
       various transactions in the various businesses that we've dealt with.

In addition to being a certified public accountant, plaintiff testified that he also has been
the chief financial officer of a number of corporations.3 Specifically, plaintiff testified: “I
was the chief financial officer for the forest division of Stone Container. That company
then was spun off in 1996 . . . and I was the CFO of the U.S Forest Industries. Their
revenue was around $300 million, about 600 employees throughout that region.” The
parties have stipulated that “[a]s CFO of U.S. Forest Industries from 1996 to 2002,
plaintiff’s group was responsible for ensuring that employment taxes were deposited.” In
addition, plaintiff served as Chief Financial Officer of National Storm Management, and
the parties also have stipulated that “[a]s CFO of National Storm Management from 2004
and 2005, plaintiff had responsibility for ensuring that payroll taxes were paid.”

        After serving as Chief Financial Officer of BOOMj,4 plaintiff testified, “I’ve been the
chief financial officer of a company just recently that I resigned from, a company called
EFactor. And presently I'm the -- the chief financial officer of a company called Flying
Food Fare, Inc., which is an airline catering business based in Chicago.” In sum, plaintiff
testified that he has served as chief financial officer of seven different companies.
Regarding BOOMj, the parties have stipulated that Mr. Noffke “became CFO and
2 The court notes that, although the parties have stipulated that Mr. Noffke has been a
certified public accountant since 1980, during the trial, Mr. Noffke testified that he has
been a certified public accountant “since 1981,” and, as of 2016, that he had been in the
accounting business for “a little bit more” than thirty years,” which is inconsistent with his
testimony that he has “been in the accounting industry since 1977.” Although the fact that
Mr. Noffke is a certified public accountant is relevant to the court’s determination, as are
his years of experience, neither the precise year he was certified as a public accountant,
nor the exact number of years he has been involved in the accounting industry are
important.
3Although not discussed at trial, the parties also have stipulated that “Plaintiff has an
accounting bachelors’ degree and has taken post-graduate management courses at
Northwestern University [sic] and Emory University’s business schools.”
4 As discussed further below, after BOOMj ceased operations in 2009, a subsidiary of
BOOMj, Kaching Kaching, Inc., purchased certain assets of BOOMj for 20.8% of the
shares of common stock of Kaching Kaching, Inc., and plaintiff became the Chief
Financial Officer of Kaching Kaching, Inc.

                                              2
executive vice-president of BOOMj.com, Inc., an online services company aimed at baby-
boomers in 2007.” (internal reference omitted). Regarding the beginning of his
employment, Mr. Noffke testified at trial on cross-examination:

       Q. Now, you -- when BoomJ began, came into existence, you were one of
       the original members of the executive team; is that right?

       A. That’s correct.

       Q. And Mr. McNulty was as well.

       A. That's correct.

       Q. But was Mr. -- you were -- you were issued stock; is that right?

       A. At a point in time, correct.

       Q. Okay. At the beginning of the company’s existence.

       A. That's correct.

In response to the question on cross-examination, “when you took on this -- this role as
CFO of -- of BoomJ, did you understand that that was a potential -- that -- that a role such
as that could carry a potential personal liability should there be nonemployment --
nonpayment of employment taxes?” Mr. Noffke answered: “Yes, I did.”

       Regarding the formation of BOOMj, plaintiff testified:

       BoomJ was formed in 2006 as an offshoot of a company called Financial
       Media Group. The company was a private company until 2007 when it did
       what was called a reverse merger[5] with -- with what's called a shell
       company. A shell company is a company that is set up for public reporting.
       It's gone through the SEC. It has received the various blessings that it can
       be a publicly reporting company which requires three years of audited
       financial statements and various disclosure documents on a business plan.
       Well, this company had basically come into what was called a shell status,
       did not have any liabilities on it. And what we did is we exchanged stock
       within BoomJ for the stock of this public entity. This entity, then we changed
       its name then to BoomJ, and then further changed it to a company called
       Beyond Commerce.

Mr. Noffke testified that “[i]nitially I owned a million shares of BoomJ as the private
company. That was then converted into -- it was a reverse merger of 2.02, so converted
into 2,200,000 shares. . . .”
5 Mr. Noffke subsequently testified that “[t]he reverse merger took place sometime during
the period of -- of 2007.”

                                             3
         Explaining the relationship between the various entities, Mr. Noffke testified that:

         Beyond Commerce is the public vehicle that was the trading vehicle where
         the stock was. BoomJ.com is a subsidiary 100 percent owned by Beyond
         Commerce. Beyond Commerce actually owned 100 percent of Local Ad
         Link, the I Supply company,[6] and two other facilities or entities. But the
         ultimate parent was Beyond Commerce that owned all these other various
         companies.

Mr. Noffke served as Chief Financial Officer of BOOMj, Beyond Commerce, and Local Ad
Link. Mr. Noffke testified that he was “secretary-treasurer at a point in time” of BOOMj
and the various entities. In response to the question: “Were you executive vice president
and chief financial officer of each of those entities?” Mr. Noffke replied:

         I was most likely the treasurer-secretary of each one of those entities not
         necessarily the CFO, but that legal capacity.

         Q. Were you -- were you CFO of any of these entities? I thought --

         A. I don’t believe there was a CFO for those positions, and we were just --
         again, these were legal entities, and so whatever legal entity it required,
         that's what position I was for that. Again, being Beyond Commerce and CFO
         of the holding company and owning 100 percent of the stock of each one of
         these.

         Q. So you were CFO of Beyond Commerce, and were you CFO of BoomJ
         as well?

         A. That’s correct.

         Q. Okay. And then for Local Ad Link and I Supply, you’re just saying you
         don't know what was legally required for them --

         A. Whatever was legally required, whether it was a treasurer or just -- I was
         either treasurer or secretary of that -- of those entities.

         Q. What about executive vice president? Were you executive vice president
         of any of those entities?

         A. Not to my knowledge.

      Robert McNulty started BOOMj, and testified that, initially, he served as “the
chairman of the company, nonexecutive chairman.” Mr. McNulty explained that in his role
as nonexecutive chairman, “[p]rincipally I worked on the side of the business which was
the business strategy, business model, and, you know, the direction of the company from
6   The name of the entity is iSupply.

                                               4
that standpoint, and then raising capital for the company.” Mr. McNulty testified that
“George Pursglove was the CEO, and Mark Noffke was the CFO” of BOOMj. Mr.
Pursglove testified that he was the Chief Executive Officer and President of BOOMj. Mr.
Pursglove also testified that he formed BOOMj with Mr. McNulty and “the first file I set up
on BoomJ was October 1st, 2006.” Ultimately, Mr. McNulty became Chief Executive
Officer of BOOMj after Mr. Pursglove left BOOMj in October 2007.7 Mr. McNulty described
his management style by stating:

       I’m very direct, you know. Some people think I'm a tough guy to work for.
       Some people think I'm not so tough to work for. If you do your job, guess
       what, I'm the easiest guy in the world to work for. If you don't do your job,
       you probably won't be here very long.

The parties have stipulated that “Mr. McNulty had been subject to a sanction by the
Securities and Exchange Commission (SEC) as a result of not disclosing an inter-
company transfer to the SEC and that, as a result, Mr. McNulty could not serve as the
chairman of the board of a public reporting company.”8

The parties also have stipulated that Mr. Noffke had check signing authority on all of
BOOMj’s bank accounts, as well as on all BOOMj’s subsidiaries’ bank accounts, and Mr.
Noffke testified to the same at the trial.9 Mr. Noffke also testified that, in addition to hand
signing checks, BOOMj had a check signing machine with Mr. Noffke’s signature, and
that was with “what the majority of the checks were written.” The parties have stipulated


7 Despite parting from BOOMj nine years before the trial, Mr. Pursglove and Mr. McNulty
continue to have a strained relationship. In response to a question about Mr. McNulty’s
honesty, Mr. Pursglove stated that “He [Mr. McNulty] wouldn't know how to spell it, No. 1,
and he wouldn't know honesty if it was staring him in the face, and he wouldn't know it
was honesty if St. Peter himself was delivering it to him.” Mr. McNulty, for his part, testified
regarding Mr. Pursglove:

       He resigned from the company. I mean, I saw a significant difference in his
       attitude over a period of maybe a quarter or so. You know, in raising capital,
       things don't work. But at the end of the day, you know, you either believe in
       the business, get committed and go forward, or don't. At some point, he [Mr.
       Pursglove] decided that to leave the company, wasn't in his best interest to
       stay there. However, shortly after he left, I found that he was actually
       working on a plan to compete with our business model and -- and had
       reached out to people to raise capital and things like that.
8The parties also stipulated that “[a]t BOOMj, the lawyers the company hired researched
Mr. McNulty’s restrictions and determined that he could serve as chairman of the board.”
9 Mr. Noffke indicated that for a time, he may have been the only individual with check
signing authority at BOOMj. He testified: “I don’t recall who else may have been added. I
might have just been the sole one at a point in time. So I really don’t recall. . . .”

                                               5
that Mr. McNulty did not have check signing authority on BOOMj’s bank accounts. 10 On
cross-examination, defendant’s counsel asked Mr. Noffke why he did not simply write a
check to the IRS to the cover the requisite taxes, to which he responded:

         First of all, I didn't have the authority to do that. I mean--and, frankly, why
         am I doing that? It's a personal obligation I'm taking care of. That's almost-
         -you know, that's determinative embezzlement almost, because it was
         outside of my authority. And most likely would have only taken care of--it
         would have bounced. It was--the funds were very, very tight. There was not
         a million dollars sitting in the account at any point in time. There was only
         amounts--the amounts that were in the checking account, there were
         checks that were already issued for that.

Mr. McNulty testified, in response to the question, did Mr. Noffke have the authority to
write a check to the IRS, “I mean, the question really shouldn’t be does he have authority.
Of course he has authority to write a check. It’s, you know, who's telling him to pay them
or not telling them to pay.”11 Regarding his ability to make payments to the IRS that Mr.
McNulty did not approve, Mr. Noffke testified:

         Well, first of all, I didn't have the authority to do that. And could have -- you
         can say that I was embezzling money to take care of my personal liability
         with the IRS. It would not cover the full debt that we were owed, and it would
         handle a certain portion of that. And the -- the liability would still be -- there
         would still be a -- a liability out there, maybe reduced by whatever money I
         was able to hypothetically write to.

       Joanne Stiff12 testified that, as “an officer of the company,” Mr. Noffke had the
authority to open and close bank accounts. The parties also have stipulated that “Plaintiff
opened and closed bank accounts, merchant credit card holding accounts, credit cards
and other financial accounts on behalf of BOOMj” and that “Plaintiff had the ability with
respect to its banks to direct electronic transfers from BOOMj and its subsidiaries’ bank
accounts.” The parties further stipulated that “Plaintiff negotiated settlements with

10 At trial, Mr. McNulty was asked is “there a reason that you were not a signer on the
BoomJ checking account?” and Mr. McNulty replied: “No, not particularly.” Mr. McNulty
further explained: “I mean, I didn't control it from writing the check, but I controlled it from
discussing issues with Mark [Noffke] and directing them who should get paid and who
shouldn't get paid.”
11   The parties have stipulated that “Plaintiff and Mr. McNulty authorized payroll at BOOMj.”
12 Regarding Ms. Stiff, Mr. Noffke testified that “she actually did the payroll, was
responsible for the filing of the payroll taxes, the reporting of the payroll taxes, the actual
entry of some of the accounts payable, and the supervision of some of the accounts
payable functions, the actual generation of the check, printing or preparing a check.”
Moreover, the parties have stipulated that “plaintiff hired Joanne Stiff to manage BOOMj’s
accounts payable, payroll, bank reconciliations and other functions.”

                                                 6
creditors and former employees on behalf of BOOMj.” Mr. Noffke testified that “[t]he
accounting department reported up through me” and that he had hired, and subsequently
fired, at least one individual. Mr. Noffke hired Patricia Hill to be corporate controller of
BOOMj in 2007, and she remained in that role until he fired her 2009. Moreover, Mr.
Noffke also had extensive responsibilities regarding BOOMj’s public reporting with the
Securities and Exchange Commission. Plaintiff testified, “I would estimate basically 80
percent of my duties were in the public reporting framework.”

       The parties stipulated that “[f]rom its inception, BOOMj experienced peaks and
valleys of funding and cash flow was an issue,” and that “[i]n 2008, plaintiff was aware
that BOOMj had not made complete and timely employment tax deposits with the United
States government.” Mr. Noffke sent the IRS a letter on March 9, 2009, “requesting an
abatement of the penalties charged for the reasons of hardship and former disgruntle [sic]
employees.” In his letter to the IRS, Mr. Noffke stated that the former employees

       did not file the required documents or pay the payroll taxes, as it was
       assured to me by the Accounting Manager. Boomj has subsequently filed
       all 941 tax forms for the third and fourth quarter [of 2008]; however, our
       business was suffering at this point in time. Our business structure is based
       on e-commerce and with the slowness of the economy, our revenues have
       lowered.

The parties also stipulated that “[t]he 2008 employment tax liabilities were eventually
paid.” Mr. Noffke testified that after the 2008 employment tax liabilities were paid, changes
were made to the accounting department, specifically, “[t]he changes were that we started
putting that up in front as an item to be paid versus prior to that, it was understood when
you made payroll, you made -- you -- that was including payroll taxes.” On cross-
examination Mr. Noffke testified that:

       Q. And then from that point on, there was a discussion of that [employment
       tax liabilities].

       A. That's correct.

       Q. And -- but from that point on, you understand that in '09, none of the
       quarters were -- the obligation was fully met.

       A. That's correct. But they were presented again to -- to Bob McNulty to
       make that call whether to make those payments or not. So that was -- if you
       want to say a change, there was a change. It was a change that identified
       that these are certain obligations that need to be paid now.

       In 2009, BOOMj faced similar issues regarding timely employment tax deposits
with the United States government. On cross-examination, defendant’s counsel had the
following exchange with Mr. McNulty:



                                             7
      Q. [D]uring 2009 when there were these issues with capital infusions and
      there were payroll taxes that -- liabilities that were going unpaid, you -- you
      did continue to make payroll to your employees.

      A. Yes.

      Q. And Mr. Noffke was aware of that.

      A. Yes.[13]

Mr. McNulty testified, in response to the question, “[s]o were there more than -- there was
more than one conversation with Mr. Noffke about the fact that IRS was going to go
unpaid,” that:

      Yeah. And we always thought we were going to get money and going to pay
      it. But never came in. We were always short and, you know, you have to
      have kind of a -- and I know there's no excuse in the law, but you have to
      have an optimistic view to build these companies or you wouldn't be doing
      them. So you promise that you're going to have funding done. It doesn't
      happen.

      In explaining the process for not making the required payments to the IRS, Mr.
McNulty explained:

      Mark [Noffke] informed me on all payables, whether it’s, you know, payroll
      taxes or whatever it might be. In this specific case, the sequence of events
      was pretty straightforward. Joanne [Stiff] came to me and said, hey, we
      have -- you know, we have an obligation to pay, you know, taxes, and we
      have an obligation for payroll, but we’re going to be short. What should we
      do? And I said, you know, go ahead and, you know, pay the payroll, hold
      the taxes, and I’ll call Mark. And I called Mark and told him here’s where we
      are. OmniReliant’s[14] committed to put money in, we're about a week away
      from putting cash in, and, you know, if -- if you miss a payroll 1099, and --
      you know, sales reps, you start to destroy your business, so -- and we were
      ramping the business up so we had significant payroll to make. So I had a
      choice to make. And, you know, they were reluctant to -- to go along with it
      obviously because of the liability issue. But I just said, Look, we -- you know,
      it’s a decision I have to make. And, you know, we need to pay payroll. It's
      that simple. And they were not happy with it, particularly Mark. I remember
      talking to him on the phone.


13
  The joint exhibits include an IRS Form 433-B, which reflects that Mr. Noffke was
“Responsible for Depositing Payroll Taxes.”
14OmniReliant was an investor in BOOMj. After BOOMj experienced financial difficulties,
Local Ad Link was sold to a subsidiary of OmniReliant.

                                             8
Thereafter, plaintiff’s counsel asked Mr. McNulty:

      Q. And he [Mr. Noffke] expressed his views that the -- the federal
      employment taxes should be paid[.]

      A. Yes, he did.

      Q. Yet they were not.

      A. Correct. It's my responsibility. It's just that simple.

After acknowledging that Mr. Noffke was upset that the employment tax liabilities were
not being paid, Mr. McNulty had the following exchange with defendant’s counsel:

      Q. Did he [Mr. Noffke] ever threaten to just issue a payment to the IRS for
      the unpaid obligations?

      A. No.

      Q. Did he ever threaten to quit and resign his position?

      A. He didn’t threaten to quit, but he made it pretty clear that he was very
      unhappy about it.

      Q. And did –

      A. Mark’s not the kind of guy that just relinquishes and rolls over. You know,
      he felt there was a real responsibility to the company. If he left, who's going
      to run it from that standpoint? I can't run the accounting department.

Mr. McNulty expressed surprise that Mr. Noffke, and not himself, was the individual the
IRS assessed the trust fund recovery penalties against, testifying, “[f]rankly, I assumed
that the government was coming after me,” and “I never thought they were going after
Mark. And they didn't. They didn't come after me, which surprised me.”

      Mr. Noffke also discussed the conversations he had with Mr. McNulty about not
paying the employment tax liabilities with defendant’s counsel:

      Q. we’ve talked a lot today about Mr. McNulty and what he would say to you
      when you would have these conversations about wanting to pay the
      employment tax liabilities, and I think you said he was always saying that
      money was just around -- around the corner; is that right?

      A. That’s correct.




                                              9
      Q. And this is referring -- you heard how many times in your work with Mr.
      McNulty?

      A. Many -- many times.

      Q. Over the course -- I guess beginning in 2008 when you first --

      A. Beginning in 2008 when we first incurred missing the payroll liability the
      first time. And actually that happened in 2008, the promise was fulfilled. We
      were able to pay those payroll taxes in 2008 in 2009.

      Q. Right. But the same was not true of the employment tax liabilities
      incurred in 2009.

      A. That's correct.

Mr. Noffke discussed the non-payment of federal taxes further with plaintiff’s counsel:

      Q. Would you say that you urged Mr. McNulty to pay the federal
      employment taxes?

      A. Yes, I would.

      Q. How often would you urge him to pay the federal employment taxes?

      A. It was front and center every time he received one of our sheets.

      Q. And how often was that?

      A. Traditionally weekly. We tried to make payments on Fridays.
                                           ...

      Did the tenor of your discussions with Mr. McNulty change from the
      beginning of 2009 to the end of 2009 regarding employment taxes?

      A. Yes, it did.

      Q. Would you tell the Court.

      A. It got a little bit more intense because of -- the dollar amount was getting
      extremely high. And Bob [McNulty] -- again, it's always the next deal. We
      heard him talk about, I would do this again. I -- you know, he -- he's still
      believe -- I mean, I'm looking at more realistic. I'm looking at what are our
      liabilities and how do you take care of the various vendors, suppliers,
      payroll, you know, trust fund obligations to -- basically to the point of, you
      know -- you know, is this money ever going to come in? When does it stop?


                                            10
      On November 2, 2009, the IRS sent BOOMj a notice regarding the first quarter of
2009, which stated in part:

       Our records indicate that you haven’t paid the amount you owe. The law
       requires that you pay your tax at the time you file your return. This is your
       notice, as required by Internal Revenue Code Section 6331(d), of our intent
       to levy (take) any state tax refunds that you may be entitled to if we don’t
       receive your payment in full. In addition, we will begin to search for other
       assets we may levy. We can also file a Notice of Federal Tax Lien, if we
       haven’t already done so.

      At the end of 2009, BOOMj “ceased operations and no longer had employees.”
The parties have stipulated that “[a]t the end of 2009, Mr. McNulty set up an arrangement
whereby a subsidiary of BOOMj, called Kaching Kaching, Inc. (‘KCKC’) purchased certain
assets of BOOMj for 20.8% of the shares of common stock of KCKC.” Mr. Noffke became
the Chief Financial Officer of Kaching Kaching, Inc. and Mr. McNulty became the Chief
Executive Officer.15

       In February 2010, Mr. Noffke sent a letter to President Obama requesting the
president “waive any back taxes due and allow the officers clemency on any personal
obligations.” Mr. Noffke explained that:

       Beyond Commerce, Inc. during 2009 embarked on an incredibly complex
       and significant transformation as we fundamentally shifted our business
       model from a social-shopping portal to a local advertising and e-commerce
       company. During the first quarter of 2009 at our peak we had over one
       hundred salary individuals and over 35,000 independent sales
       representatives selling local advertising on the internet through our Local
       Ad Link, Inc. LocalAdLink was an online business directory selling ads to
       small and medium size business [sic] along with user generated customer
       reviews and placing the ads on Internet search engines Google, Yahoo, and
       Bing.com.

Mr. Noffke also explained in his letter that:

       However, the Company began going through some very difficult times over
       the next several months. The downturn can be pinpointed to when the
       Company was put into a negative position as the Company’s credit card
       merchant cut off its processing just as we were ramping up. The processor
       withheld much needed cash that forced the Company off line. As a result,
       this put the Company in a position where it was unable to pay on a timely
15 Although not an issue currently before this court, Kaching Kaching, Inc. also failed to
pay the employment tax liabilities for the tax period ending on December 31, 2010, and
the IRS assessed Mr. Noffke with a trust fund recovery penalty for that failure. As
indicated below, prior to trial, the parties resolved their dispute regarding the 2010 fourth
quarter tax liabilities for Kaching Kaching, Inc.

                                                11
      basis its independent representatives. This subsequently pushed the
      Company into a slow downward spiral.

Mr. Noffke continued:

      Needless to say payroll taxes were neglected as we were always trying to
      take care of the field sales representatives and our own employees with the
      anticipation that the next round of funding or increase in sales could take
      care of the taxes. The Company Officers did not divert funds or any malice,
      just invested it back into the business’s human assets. I have not received
      a paycheck for close to four months, have lost all my stock in the company
      as it was foreclosed on in repayment of a loan, all this as we try to
      reinvigorate our business.

Mr. Noffke sent the IRS another letter in March 2010, referencing a conversation between
the IRS and Ms. Stiff, which indicated

      in the conversation, you were informed that Boomj has not paid payroll for
      December 2009 and for first quarter 2010. We are in financial hardship and
      are trying to raise capital for operational needs. We have had to lay off
      approximately 80% of our staff. At the beginning of 2009, we had a little
      over 100 employees; we are now operating with about 12-15. Boomj is
      currently in re-organizing and rebuilding our business model to start bringing
      in additional revenues as well as capital fund raising. At the moment,
      Boomjcom's revenues are approximately $3,000.00 gross monthly.

        The IRS continued to seek information about the unpaid payroll taxes and Mr.
Noffke testified that he brought in an accounting firm to help BOOMj work with the IRS,
and in an April 20, 2010 email, a tax manager with the accounting firm requested Mr.
Noffke provide a list of monthly income, personal expenses, and a complete Form 4180.
The parties have stipulated that “Plaintiff signed a Form 4180 interview form regarding
his role at BOOMj and his knowledge of the unpaid liabilities on May 18, 2010.” The Form
4180 which is titled: “Report of Interview with Individual Relative to Trust Fund Recovery
Penalty or Personal Liability for Excise Taxes,” asked a series of questions under the
heading “Responsibility” and stated: “Please state whether you performed any of the
duties / functions listed below for the business and the time periods during which you
performed these duties.” The questions included: “Determine financial policy for the
business?” “Direct or authorize payments of bills/creditors?” “Open or close bank
accounts for the business?” “Sign or counter-sign checks?” “Authorize payroll?”
“Authorize or make Federal Tax Deposits?” and “Hire/Fire?” All of the above questions
were answered in the affirmative, as well as the question: “During the time the delinquent
taxes were increasing, or at any time thereafter, were any financial obligations of the
business paid,” with the explanation: “Standard operational expenses to keep company
in business.” In response to the question: “Who authorized them to be paid?” the Form
4180 stated: “Mark Noffke.”



                                           12
       The parties have stipulated that “[o]n September 20, 2010, the IRS assessed
penalties against plaintiff Noffke of $91,252.54 for the first quarter, $208,618.99 for the
second quarter, $179,570.87 for the third quarter, and $102,642.10 for the fourth quarter.”
On January 12, 2011, plaintiff paid the trust fund portion of the employment tax for one
employee for the first, second, third and fourth quarters of 2009 for BOOMj, and on the
same day, January 12, 2011, plaintiff filed claims for refund for all four quarters of 2009.
The parties have stipulated that “[t]he IRS had not taken any action on these claims as of
the date of filing the complaint in this action.”

        Defendant’s counterclaim, discussed below, indicated that “plaintiff was assessed
a trust fund recovery penalty, pursuant to Internal Revenue Code § 6672, in the amount
of $15,402.37. The assessed amount corresponds to a portion of unpaid employment tax
obligations of Kaching Kaching Inc. for the tax period ending on December 31, 2010.”
Subsequently, plaintiff paid the trust fund portion of the employment tax for one employee
for the fourth quarter of 2010 for Kaching Kaching Inc., and filed a claim for refund on
October 7, 2013. The defendant also indicated that the IRS has not issued a denial of the
claim for refund.

        On February 6, 2014, plaintiff filed the above captioned case in the United States
Court of Federal Claims and sought a “refund of the claimed overpaid federal taxes in the
amount of $1,541.69 plus interest,”16 as well as a determination by the court “that Plaintiff
is not a responsible person within the meaning of 26 USC §6672(a).” On June 6, 2014,
defendant filed an answer and a counterclaim seeking “judgment against plaintiff in the
amount $102,642, plus assessed interest, minus amounts credited by the IRS against
plaintiff’s § 6672 assessment for the tax periods ending on March 31, 2009, June 30,
2009, September 30, 2009, and December 31, 2009, plus interest and costs allowed by
law.” On August 7, 2014, plaintiff filed an amended complaint, and in addition to seeking
a “refund of the claimed overpaid federal taxes in the amount of $1,541.69 plus interest
with respect to the four quarters of trust fund recovery penalty with respect to Boomj.com,”
plaintiff sought a “refund of the claimed overpaid federal taxes in the amount of $303.40
plus interest with respect to the trust fund recovery penalty with respect to KaChing
KaChing for the fourth quarter of 2010.” Prior to trial, the parties resolved their dispute
regarding the 2010 fourth quarter tax liabilities for Kaching Kaching, Inc.




16 Although plaintiff sought a refund in the amount of “$1,541.69 plus interest,” in plaintiff’s
“Statement for Refund Claim,” included as an exhibit to the complaint, plaintiff claimed
“[t]he Taxpayer has paid $1,533, representing the withholding for one employee for each
Quarter.”

                                              13
                                       DISCUSSION

       The parties agree that the issue to be resolved is “whether or not plaintiff is liable
for the trust fund recovery penalties assessed by the IRS against plaintiff pursuant to
Section 6672 for the four quarters of 2009, relating to the unpaid employment taxes of
Beyond Commerce, Inc.” As recently explained by the United States Court of Appeals for
the Federal Circuit:

       Although the United States, as a sovereign, is generally immune from suit,
       28 U.S.C. § 1346(a) provides the limited waiver of sovereign immunity for
       refund suits:

       (a) The district courts shall have original jurisdiction, concurrent with the
       United States Court of Federal Claims, of:

       (1) Any civil action against the United States for the recovery of any internal-
       revenue tax alleged to have been erroneously or illegally assessed or
       collected, or any penalty claimed to have been collected without authority
       or any sum alleged to have been excessive or in any manner wrongfully
       collected under the internal-revenue laws. . . .

       The Tucker Act, which gives the Claims Court jurisdiction over suits for
       which the United States has waived its sovereign immunity, provides the
       Claims Court with jurisdiction for refund suits. 28 U.S.C. § 1491; Shore v.
       United States, 9 F.3d 1524, 1525 (Fed. Cir. 1993); Rocovich v. United
       States, 933 F.2d 991, 993 (Fed. Cir. 1991).

Diversified Grp. Inc. v. United States, 841 F.3d 975, 981 (Fed. Cir. 2016).

       As noted above, Mr. Noffke has paid the “trust fund portion of the employment tax
for one employee for the first, second, third and fourth quarters of 2009 for BOOMj.”
Generally, “payment of the assessed taxes in full is a prerequisite to bringing a refund
claim.” Ledford v. United States, 297 F.3d 1378, 1382 (Fed. Cir. 2002) (citing Flora v.
United States, 362 U.S. 145, 177, reh’g denied, 362 U.S. 972 (1960); Rocovich v. United
States, 933 F.2d 991, 993–94 (Fed. Cir. 1991)); see also Shore v. United States, 9 F.3d
1524, 1527 (Fed. Cir. 1993) (“The Flora [v. United States, 362 U.S. 145] full payment rule
requires that taxpayers prepay the tax principal before the Court of Federal Claims will
have subject matter jurisdiction over their tax refund action under § 1491.”). The Federal
Circuit in Diversified Group echoed this sentiment, noting that “[i]n Flora, the Supreme
Court determined that § 1346(a)’s jurisdictional grant includes a ‘full payment
requirement,’ which demands—as a jurisdictional prerequisite—full payment of the tax or
penalty before a party could sue for a refund.” Diversified Grp. Inc. v. United States, 841
F.3d at 981 (quoting Flora v. United States, 362 U.S. at 177). There is, however, an
exception to this rule for divisible taxes, such as those levied under 26 U.S.C. § 6672
(2012). See 26 U.S.C. § 6331(i)(2)(B) (2012) (defining divisible taxes to include “the
penalty imposed by section 6672”). Under this exception, “a taxpayer assessed under
section 6672 need only pay the divisible amount of the penalty assessment attributable

                                             14
to a single individual’s withholding before instituting a refund action.” Boynton v. United
States, 566 F.2d 50, 52 (9th Cir. 1977); see also Steele v. United States, 280 F.2d 89, 91
(8th Cir. 1960).17 The rationale for this exception is that “section 6672 assessments
represent a cumulation of separable assessments for each employee from whom taxes
were withheld.” Boynton v. United States, 566 F.2d at 52. Thus, in the past, courts have
permitted 26 U.S.C. § 6672 refund cases to proceed when the taxpayer has prepaid the
IRS an amount equal to one employee’s withholding for one quarter. See Godfrey v.
United States, 748 F.2d 1568, 1573 (Fed. Cir. 1984) (noting that the United States Claims
Court had allowed the case to proceed after each plaintiff paid $150.00 to the IRS, “the
amount in excess of income and FICA taxes withheld from one employee”);18 see also
Kennedy v. United States, 95 Fed. Cl. 197, 200 (2010) (noting plaintiff had prepaid
$476.15 to the IRS, “representing the portion of the assessment relating to one employee
for the fourth quarter of 2000”). Furthermore, defendant has not challenged the propriety
of Mr. Noffke seeking a refund after only paying a portion of the taxes owed. In light of
the decisions allowing partial payment for a case regarding 26 U.S.C. § 6672, the court
believes it is proper for the court to consider Mr. Noffke’s claim on the merits. As
defendant has not raised any other jurisdictional challenges to Mr. Noffke’s suit, the court
addresses the merits of plaintiff’s tax refund claim.

26 U.S.C. § 6672

       The Tax Code at 26 U.S.C. § 6672(a) states, in part:

       Any person required to collect, truthfully account for, and pay over any tax
       imposed by this title who willfully fails to collect such tax, or truthfully
       account for and pay over such tax, or willfully attempts in any manner to
       evade or defeat any such tax or the payment thereof, shall, in addition to
       other penalties provided by law, be liable to a penalty equal to the total


17 The genesis of the exception is dicta in Flora v. United States stating that “excise tax
assessments may be divisible into a tax on each transaction or event, so that the full-
payment rule would probably require no more than payment of a small amount.” Flora v.
United States, 362 U.S. at 175 n.38; see also Steele v. United States, 280 F.2d at 90
(citing Flora v. United States, 362 U.S. at 171 n.37, 175 n.38).
18 Although  the Federal Circuit considered the issue of the “divisibility exception” to Flora’s
full payment rule, and noted that “divisibility remains a ‘narrow exception,’” Diversified
Grp. Inc. v. United States, 841 F.3d at 982, in that case, the Federal Circuit addressed
the issue of the divisibility exception in the context of the IRS conducting a penalty audit,
pursuant to 26 U.S.C. § 6707, for the failure to register a tax shelter under 26 U.S.C.
§ 6111, and did not address 26 U.S.C. § 6672. See Diversified Grp. Inc. v. United States,
841 F.3d at 985 (determining the penalty assessed pursuant to 26 U.S.C. § 6707 is not
divisible). A seminal case decided by the Federal Circuit regarding 26 U.S.C. § 6672,
Godfrey v. United States, 748 F.2d 1568, did not address if partial payment was a
jurisdictional bar to deciding the case, but reached a decision on the merits, despite
plaintiff having paid the taxes only “withheld from one employee.” Id. at 1573.

                                              15
       amount of the tax evaded, or not collected, or not accounted for and paid
       over.

26 U.S.C. § 6672(a); see also Gann v. United States, 128 Fed. Cl. 394, 395 (2016). By
way of background, a Judge of the United States Court of Federal Claims explained:

       A short explanation of the payroll tax system is useful to place the
       applicability of section 6672 in context. Under the Federal Tax Deposit
       System, every employer is required to withhold Federal Insurance
       Contributions Act (FICA) tax from employees’ wages “as and when” they
       are paid. 26 U.S.C. §§ 3102, 3402(a) (2000). These withholding funds are
       used primarily to pay the taxpayers' individual income tax as well as Social
       Security and Medicare benefits. Instead of paying the federal government
       directly, employers deposit the withheld funds with an authorized financial
       institution such as a commercial bank until they are collected by the U.S.
       Treasury. INTERNAL REVENUE SERVICE, PUBLICATION 15,
       CIRCULAR E, EMPLOYER'S TAX GUIDE (2003). These funds are
       deposited along with a Federal Tax Deposit (FTD) coupon listing the
       employer's name, address, and Employer Identification Number (EIN),
       which allows the IRS to earmark and track the deposits. Id. Under the
       Internal Revenue Code, the deposited withholdings “shall be held to be a
       special fund in trust for the United States.” 26 U.S.C. § 7501(a). Hence, the
       withheld taxes are commonly referred to as “trust fund taxes,” although the
       trust established is somewhat different than a traditional common law trust.
       INTERNAL REVENUE SERVICE, SMALL BUS/SELF–EMPLOYED,
       BUSINESS WITH EMPLOYEES, TRUST FUND TAXES (2003). These
       trust fund tax deposits are accounted for by the IRS on a quarterly basis
       through the use of a tax return form known as “Form 941.” Employers must
       file Form 941 within one month from the end of the prior quarter, and
       penalties are assessed for late filings. Id. More importantly for the purposes
       of this case, however, employers are liable under 26 U.S.C. §§ 3102(b) and
       3403, for the payment of these trust fund taxes once they pay employees
       only their net wages. Id. It is this liability that section 6672 enforces.

Farkas v. United States, 57 Fed. Cl. 134, 139 (2003), aff’d, 95 F. App’x 355 (Fed. Cir.
2004) (capitalization in original; footnotes omitted). The Farkas court noted that “Section
6672 holds delinquent employers personally responsible for 100% of the amount withheld
from their employees.” Id. As indicated in Jenkins v. United States, “[i]n imposing the
obligation to collect these taxes on other than the actual taxpayer, Congress recognized
that collectors might fail to set aside and pay over the taxes to the United States,” and in
cases where “the collector fails to remit the withheld taxes, the United States must,
nevertheless, credit each taxpayer as if the funds were actually paid over.” Jenkins v.
United States, 101 Fed. Cl. 122, 130 (2011), aff’d, 484 F. App’x 511 (Fed. Cir. 2012). “To
protect against such losses, the persons responsible for ensuring that the trust fund taxes
are paid, who willfully fail to do so, may be held personally liable under section 6672 of
the Code.” Jenkins v. United States, 101 Fed. Cl. at 130; see also Waterhouse v. United
States, 122 Fed. Cl. 276, 283 (2015).

                                            16
         As explained by the Federal Circuit in Godfrey v. United States:

         The purpose of the 100 percent penalty provision “is to permit the taxing
         authority to reach those [persons] responsible for the corporation's failure
         to pay the taxes which are owing.” White v. United States, 372 F.2d 513,
         516, 178 Ct. Cl. 765 (1967). Though the legislative history is uninformative,
         “it is evident from the face of the section that [§ 6672] was designed to cut
         through the organizational form and impose liability upon those actually
         responsible for an employer's failure to withhold and pay over the tax.” See
         Pacific National Insurance Co. v. United States, 422 F.2d 26, 31 and n.12
         (9th Cir.), cert. denied, 398 U.S. 937, 90 S. Ct. 1838, 26 L. Ed. 2d 269
         (1970). Accordingly, “the section is generally understood to encompass all
         those officers who are so connected with a corporation as to have the
         responsibility and authority to avoid the default which constitutes a violation
         of the particular Internal Revenue Code section or sections involved, even
         though liability may thus be enforced on more than one person.”[19]

Godfrey v. United States, 748 F.2d at 1574-75 (quoting White v. United States, 178 Ct.
Cl. 765, 372 F.2d 513, 516 (1967)) (bracket in original). As the Farkas court elaborated:
“Thus, liability under section 6672 attaches only to those officers or directors with
sufficient power and authority over the corporation that they may be considered a
‘responsible person’—i.e., one responsible for withholding the employees’ taxes.” Farkas
v. United States, 57 Fed. Cl. at 140 (footnote omitted); see also Waterhouse v. United
States, 122 Fed. Cl. at 283. In Godfrey, the Federal Circuit indicated:

         The term “responsible person” is an invention of the courts, having no
         statutory definition or discussion in the legislative history. As the Supreme
         Court recently noted in Slodov v. United States, 436 U.S. 238, 98 S. Ct.
         1778, 56 L. Ed. 2d 251: “The cases which have been decided under § 6672
19   The Tax Code at 26 U.S.C. § 6103(e)(9) provides that:

         Disclosure of certain information where more than 1 person subject to
         penalty under section 6672.--If the Secretary determines that a person is
         liable for a penalty under section 6672(a) with respect to any failure, upon
         request in writing of such person, the Secretary shall disclose in writing to
         such person--

         (A) the name of any other person whom the Secretary has determined to
         be liable for such penalty with respect to such failure, and

         (B) whether the Secretary has attempted to collect such penalty from such
         other person, the general nature of such collection activities, and the
         amount collected.

26 U.S.C. § 6103(e)(9) (2012); see also Jenkins v. United States, 90 Fed. Cl. 585, 586
n.2 (2009).

                                               17
       generally refer to the ‘person required to collect, truthfully account for, and
       pay over any tax imposed by this title’ by the shorthand phrase ‘responsible
       person.’ We use that phrase without necessarily adopting any of the
       constructions placed upon it in the decisions.

Godfrey v. United States, 748 F.2d at 1574 n.4 (quoting Slodov v. United States, 436 U.S.
238, 246 n.7 (1978)); see also Farkas v. United States, 57 Fed. Cl. at 140 n.7. The Federal
Circuit in Godfrey concluded that

       a person is subject to a 100 percent penalty if he satisfies two separate
       statutory requirements. First, he must be under a duty to “perform the act in
       respect of which the violation occurs,” (§ 6671(b)) and that duty is “to collect,
       truthfully account for, and pay over” any taxes (§ 6672). Such a person is a
       “responsible person”. Second, the “responsible person” must have “willfully”
       failed to collect, truthfully account for, and pay over, or have “willfully”
       evaded or defeated the tax or tax payment. As the Claims Court correctly
       noted, both statutory requirements must be present for the 100 percent
       penalty to be imposed.

Godfrey v. United States, 748 F.2d at 1574 (citing McCarty v. United States, 437 F.2d
961, 967, 194 Ct. Cl. 42 (1971) (footnote omitted).

        Both elements require a fact-specific inquiry by the court. In considering if the
plaintiff was a responsible person, the court in Waterhouse v. United States stated, “the
court focuses its factual inquiry into whether the plaintiff had the ‘power to compel or
prohibit the allocation of corporate funds.’” Waterhouse v. United States, 122 Fed. Cl. at
283 (quoting Godfrey v. United States, 748 F.2d at 1576). In addition, regarding the
willfulness requirement, in Gann v. United States, the court stated “[t]he separate
requirement that a responsible individual also have acted willfully in failing to withhold
and/or remit the tax also presents a fact-intensive inquiry, calling for ‘proof of a voluntary,
intentional, and conscious decision not to collect and remit taxes thought to be owing.’”
Gann v. United States, 121 Fed. Cl. 482, 489 (2015) (quoting Godfrey v. United States,
748 F.2d at 1577). Therefore, “[b]oth the responsible person analysis and the assessment
of willfulness are fact-based determinations unique to the circumstances of each case.”
Jenkins v. United States, 101 Fed. Cl. at 131.

       The burden of proof for these two elements, whether a plaintiff was a responsible
person and whether a plaintiff additionally willfully failed to make and pay the requisite
withholdings, rests with the plaintiff. As explained by a Judge of the United States Court
of Federal Claims:

       When challenging a Section 6672 assessment, “[t]he taxpayer bears the
       burden of proving both that he was not a responsible person and that his
       failure to pay over the taxes was not willful.” Stuart v. United States, 337
       F.3d 31, 36 (1st Cir. 2003). To prevail, the taxpayer must establish by a
       preponderance of the evidence that the government's imposition of the


                                              18
       penalty against him is erroneous. Farkas v. United States, 57 Fed. Cl. 134,
       140 (2003), aff’d, 95 Fed. Appx. 355 (Fed. Cir. 2004). The taxpayer carries
       the burden of proof both for his tax refund claim and against the defendant's
       counterclaim.

Brinskele v. United States, 88 Fed. Cl. 334, 339 (2009), aff’d, 397 F. App’x 662 (Fed. Cir.
2010); see also Waterhouse v. United States, 122 Fed. Cl. at 283; Kobus v. United States,
103 Fed. Cl. 575, 586 (2012) (“To prevail in a § 6672 case, the taxpayer must establish
by a preponderance of the evidence that the government's imposition of the penalty
against him is erroneous by proving that he was either not a responsible person or not
willful.”); Farkas v. United States, 57 Fed. Cl. at 140 (“The burden of production and
persuasion to refute these two elements [whether plaintiff “was a responsible person” and
whether plaintiff ”willfully failed to make the requisite withholdings”] lies upon the plaintiff
where, as here, the government has established a prima facie case by presenting the
assessments made against the plaintiff.”). “Once the Government establishes ‘a prima
facie case by presenting the assessments made against the plaintiff,’ the ‘burden of
production and persuasion . . . lies upon the plaintiff’ and must be shown by a
preponderance of the evidence.” Waterhouse v. United States, 122 Fed. Cl. at 283
(quoting Farkas v. United States, 57 Fed. Cl. at 140).

        In addition, in a tax refund case, there is also a presumption of the correctness of
the findings of the Commissioner of Internal Revenue. See United States v. Fior D'Italia,
Inc., 536 U.S. 238, 243 (2002) (“An ‘assessment’ amounts to an IRS determination that
a taxpayer owes the Federal Government a certain amount of unpaid taxes. It is well
established in the tax law that an assessment is entitled to a legal presumption of
correctness – a presumption that can help the Government prove its case against a
taxpayer in court.”); Conway v. United States, 326 F.3d 1268, 1278 (Fed. Cir.) (“The ruling
of the Commissioner of Internal Revenue enjoys a presumption of correctness and a
taxpayer bears the burden of proving it to be wrong.” (quoting Transamerica Corp. v.
United States, 902 F.2d 1540, 1543 (Fed. Cir. 1990)), reh’g denied (Fed. Cir. 2003); see
also Stobie Creek Inv. LLC v. United States, 608 F.3d 1366, 1381 (Fed. Cir. 2010); Bubble
Room, Inc. v. United States, 159 F.3d 553, 561 (Fed. Cir. 1998) (“In a tax refund case,
the ruling of the Commissioner of Internal Revenue is presumed correct.”), reh'g denied,
en banc suggestion declined (Fed. Cir. 1999); Lima Surgical Assocs., Inc. v. United
States, 944 F.2d 885, 888 (Fed. Cir. 1991) (“[D]eterminations of the Commissioner of
Internal Revenue are presumptively correct.”); Widtfeldt v. United States, 122 Fed. Cl.
158, 163 (2015), aff’d, 2016 WL 5929834 (Fed. Cir. Oct. 12, 2016); Diamond v. United
States, 115 Fed. Cl. 516, 524 (2014) (quoting Danville Plywood Corp. v. United States,
899 F.2d 3, 7 (Fed. Cir. 1990) (citing Welch v. Helvering, 290 U.S. 111, 115 (1933) (“In a
tax refund suit, ‘the ruling of the [IRS] Commissioner enjoys a presumption of correctness
and a taxpayer bears the burden of proving it to be wrong.’”) (alternation in original);
Deseret Mgmt. Corp. v. United States, 112 Fed. Cl. 438, 447 (2013) (“In a refund suit, the
assessment made by the IRS is presumed to be correct, placing an obligation on the
taxpayer to come forward with evidence to rebut a presumption of correctness.”);
Ghandour v. United States, 36 Fed. Cl. 53, 59 (1996) (quoting Whiteside v. United States,



                                              19
26 Cl. Ct. 564, 566 (1992) (In a responsible person inquiry, “[a]s in any tax refund case,
there is a ‘strong presumption of the correctness of the findings’ of the Commissioner.”).

        The taxpayer has the burden of rebutting the presumption of correctness, but also
“the taxpayer has the burden of establishing entitlement to the specific refund amount
claimed.” Bubble Room, Inc. v. United States, 159 F.3d at 561; see also United States v.
Janis, 428 U.S. 433, 440-41 (1976) (“In a refund suit the taxpayer bears the burden of
proving the amount he is entitled to recover.” (citing Lewis v. Reynolds, 284 U.S. 281,
modified, 284 U.S. 599 (1932)); Helvering v. Taylor, 293 U.S. at 515 (“Unquestionably the
burden of proof is on the taxpayer to show that the Commissioner's determination is
invalid.”); Welch v. Helvering, 290 U.S. 111, 115 (1933) (“The Commissioner of Internal
Revenue['s] . . . ruling has the support of a presumption of correctness, and the petitioner
has the burden of proving it to be wrong.” (citing Wickwire v. Reinecke, 275 U.S. 101
(1927)); Charron v. United States, 200 F.3d 785, 792 (Fed. Cir. 1999) (“Since the
[plaintiffs] were seeking refunds of taxes they had paid, they have the burden of proving
they are entitled to the amount sought.”); Danville Plywood Corp. v. United States, 899
F.2d 3, 7-8 (Fed. Cir. 1990); Barenholtz v. United States, 784 F.2d 375, 381 (Fed. Cir.
1986); Widtfeldt v. United States, 122 Fed. Cl. at 163 (quoting Gingerich v. United States,
77 Fed. Cl. 231, 240 (2007) (“A ‘plaintiff who is claiming a tax refund must prove [its] case
by a preponderance of the evidence.’”)); Christman v. United States, 110 Fed. Cl. 1, 5
(2013) (“In refund suits, there is no doubt that the plaintiff bears the burden of proof as to
his or her entitlement to a tax refund.” (citing Young & Rubicam, Inc. v. United States, 187
Ct. Cl. 635, 638, 410 F.2d 1233, 1238 (1969))); Okerlund v. United States, 53 Fed. Cl.
341, 356 (2002) (“As a general rule, the burden of proof is on the taxpayer in tax refund
cases.” (citing Welch v. Helvering, 290 U.S. at 115)), recons. denied, 2003 WL 1547563
(Fed. Cl. Feb. 14, 2003), aff'd, 365 F.3d 1044 (Fed. Cir. 2004).

        In sum, to rebut the presumption of the Commissioner’s correctness, “the taxpayer
must come forward with enough evidence to support a finding contrary to the
Commissioner’s determination.” Bubble Room, Inc. v. United States, 159 F.3d at 561.
Stated otherwise, to overcome the presumption, the taxpayer has the burden of
presenting “substantial evidence as to the wrongfulness of the Commissioner's
determination.” KFOX, Inc. v. United States, 206 Ct. Cl. 143, 151-152, 510 F.2d 1365,
1369 (1975); Arrington v. United States, 34 Fed. Cl. 144, 147 (1995), aff’d, 108 F.3d 1393
(Fed. Cir. 1997). The burden imposed on a plaintiff is both the burden of going forward
and the burden of persuasion. Thus, a plaintiff first must come forward with enough
evidence to support a finding contrary to the Commissioner’s determination. See
Transamerica Corp. v. United States, 902 F.2d at 1543; Danville Plywood Corp. v. United
States, 899 F.2d at 7-8; Arrington v. United States, 34 Fed. Cl. at 147. Even after
satisfying the burden of going forward, a plaintiff must still carry the ultimate burden of
proof. See Transamerica Corp. v. United States, 902 F.2d at 1543; Danville Plywood
Corp. v. United States, 899 F.2d at 8.
Responsible Person

      The court first examines, in the context of 28 U.S.C. § 6672, if Mr. Noffke is a
responsible person. Defendant argues that “Noffke is a Responsible Person at BOOMj


                                             20
under Section 6672,” whereas plaintiff argues that “Mark Noffke was not a responsible
person for purposes of imposing the trust fund recovery penalty for Boomj’s unpaid
employment taxes for the Periods in Issue.”

       As indicated by the Federal Circuit, “[t]he cases which have been decided under
§ 6672 generally refer to the ‘person required to collect, truthfully account for, and pay
over any tax imposed by this title’ by the shorthand phrase ‘responsible person.’” Godfrey
v. United States, 748 F.2d at 1574 n.4 (quoting Slodov v. United States, 436 U.S. at 246
n.7). As recently explained by a Judge of the United States Court of Federal Claims,
“[u]nder § 6672, an individual is considered a responsible person ‘if he retains sufficient
control of corporate finances that he can allocate corporate funds to pay the corporation's
other debts in preference to the corporation’s . . . tax obligations.’” Waterhouse v. United
States, 122 Fed. Cl. at 283 (quoting Brinskele v. United States, 88 Fed. Cl. at 346). As
indicated in Jenkins v. United States, it is a “bedrock principle that the determination of
whether a person is responsible ‘is a matter of substance not form and is determined by
the coincidence of status, duty and authority’ - with the duty to ensure that taxes are paid
flowing from authority that enables one to do so.” Jenkins v. United States, 101 Fed. Cl.
at 131 (quoting Cook v. United States, 52 Fed. Cl. 62, 68 (2002)). The Jenkins court
elaborated that:

       While determining responsibility perforce requires consideration of the
       totality of the circumstances, the Federal Circuit has outlined a number of
       relevant considerations:

              [A] person's “duty” under § 6672 must be viewed in light of his
              power to compel or prohibit the allocation of corporate funds.
              It is a test of substance, not form. Thus, where a person has
              authority to sign the checks of the corporation or to prevent
              their issuance by denying a necessary signature or where the
              person controls the disbursement of the payroll or controls the
              voting stock of the corporation he will generally be held
              “responsible.”

       Godfrey v. United States, 748 F.2d 1568, 1576 (Fed. Cir. 1984) (internal
       citations omitted); see also De Alto v. United States, 40 Fed. Cl. 868, 876
       (1998). The inquiry thus looks through the—

              mechanical functions of the various corporate officers, to
              determine the persons having ‘the power to control the
              decision-making process by which the employer corporation
              allocates funds to other creditors in preference to its
              withholding tax obligations.’ The inquiry required by the
              statute is a search for a person with ultimate authority over
              expenditure of funds since such a person can fairly be said to
              be responsible for the corporation's failure to pay over its
              taxes.


                                            21
Jenkins v. United States, 101 Fed. Cl. at 131-32 (quoting Godfrey v. United States, 748
F.2d at 1575) (footnote omitted). As indicated above, “liability under section 6672 attaches
only to those officers or directors with sufficient power and authority over the corporation
that they may be considered a ‘responsible person’—i.e., one responsible for withholding
the employees’ taxes.” Farkas v. United States, 57 Fed. Cl. at 140 (footnote omitted).
Stated differently, in Brinskele v. United States, the court explained:

       An individual is considered a responsible person “if he retains sufficient
       control of corporate finances that he can allocate corporate funds to pay the
       corporation's other debts in preference to the corporation's . . . tax
       obligations.” Jefferson [v. United States], 546 F.3d [477,] 480 [(8th Cir.
       2008)] (quoting Bowlen [v. United States], 956 F.2d [723,] 728 [(7th Cir.
       1992)] (internal quotation marks omitted)). “As a general proposition it may
       be safely postulated that one who is the founder, chief stockholder,
       president, and member of the board of directors of a corporation . . . is
       rebuttably presumed to be the person responsible under
       [Section 6672]. . . .”

Brinskele v. United States, 88 Fed. Cl. at 345-46 (quoting Feist v. United States, 221 Ct.
Cl. 531, 607 F.2d 954, 960 (1979) (quoting McCarty v. United States, 194 Ct. Cl. 42, 437
F.2d 961, 967–68 (1971))). As indicated in Salzillo v. United States, “the Federal Circuit
and other courts have made clear that there can be more than one responsible person
as ‘liability attaches to all those under the duty set forth in the statute.’” Salzillo v. United
States, 66 Fed. Cl. 23, 33 (quoting Harrington v. United States, 504 F.2d 1306, 1311 (1st
Cir. 1974)), appeal dismissed, 140 F. App’x 254 (Fed. Cir. 2005). Instructions from a
superior do not relieve a subordinate of potential liability under 26 U.S.C. § 6672. See
Salzillo v. United States, 66 Fed. Cl. at 33 (quoting Brounstein v. United States, 979 F.2d
952, 955 (3d Cir. 1992)) (“[A] phalanx of opinions holding that ‘[i]nstructions from a
superior not to pay taxes do not, however, take a person otherwise responsible under
section 6672(a) out of that category.’”).

       As noted above, the responsible person inquiry is a fact-specific one. See
Waterhouse v. United States, 122 Fed. Cl. at 283; Gann v. United States, 121 Fed. Cl. at
489. Turning to the facts of the above captioned case, plaintiff was the Chief Financial
Officer and Executive Vice President of BOOMj. Mr. Noffke himself testified that he was
“secretary-treasurer at a point in time” of BOOMj and the other various entities. Mr. Noffke
also testified that “[i]nitially I owned a million shares of BoomJ as the private company.”20
The parties have stipulated, and Mr. Noffke confirmed during his trial testimony, that he
had check signing authority on all of BOOMj’s bank accounts and its subsidiaries’ bank
accounts. As noted above, the parties stipulated in advance of trial that “Plaintiff opened
and closed bank accounts, merchant credit card holding accounts, credit cards and other
financial accounts on behalf of BOOMj” and that “Plaintiff had the ability with respect to
its banks to direct electronic transfers from BOOMj and its subsidiaries’ bank accounts.”
20 Plaintiff indicated, however, that “[w]hile that is true, Mr. Noffke lost all of those shares
after he pledged them as collateral for a loan that Boomj incurred and defaulted.”

                                               22
The parties also stipulated that “Plaintiff negotiated settlements with creditors and former
employees on behalf of BOOMj.” As indicated in the joint exhibits, in 2009 alone, more
than 20 wire transfers between accounts worth hundreds of thousands of dollars were
executed by Mr. Noffke. Plaintiff argues that, despite this authority, “Mr. Noffke had to
obtain permission from Robert McNulty to write a check or order a wire transfer.” Mr.
Noffke also had hiring and firing authority within the accounting department, and testified
that the “[t]he accounting department reported up through me.” Testimony at trial revealed
that Mr. Noffke supervised twenty four employees at BOOMj.

       Mr. Noffke’s responsibilities are consistent with the representations made on the
IRS Form 4180, titled: “Report of Interview with Individual Relative to Trust Fund
Recovery Penalty or Personal Liability for Excise Taxes,” the form signed by Mr. Noffke
indicated yes to all of the following questions: “Determine financial policy for the
business?” “Direct or authorize payments of bills/creditors?” “Open or close bank
accounts for the business?” “Sign or counter-sign checks?” “Authorize payroll?”
“Authorize or make Federal Tax Deposits?” and “Hire/Fire?” Form 4180 also asked:
“During the time the delinquent taxes were increasing, or at any time thereafter, were any
financial obligations of the business paid?” and the answer was “[s]tandard operational
expenses to keep company in business,” which the form stated were authorized by Mr.
Noffke. In light the of the foregoing, defendant argues, “because Noffke admits to having
broad authority in the company, coupled with corroborating testimonial and documentary
evidence, this Court should find that he is a responsible person under § 6672.”

       Plaintiff concedes that “there is no dispute that Mr. Noffke did sign checks and wire
transfer authorizations.” Plaintiff responds that “the focus of the Government’s case is on
Mr. Noffke’s ability to sign checks and his title as chief financial officer,” which plaintiff
states is insufficient for him to be a responsible person, arguing “[u]nder the Godfrey case,
the mechanical duties of signing checks and preparing tax returns are not determinative
of liability under Section 6672—the power to control the decision-making over the
allocation of funds is the test.” (citing Godfrey v. United States, 748 F.2d at 1575). Plaintiff
continues:

       While it is true that Mr. Noffke was a signer on all of the bank accounts, that
       does not equate to his being a responsible person for purposes of Section
       6672 of the Internal Revenue Code. Of particular significance is an analysis
       of Mr. Noffke’s roles and authority at Boomj. It is undisputed that Mr. Noffke
       was a signer on Boomj’s checking accounts. But that is where the analysis
       starts, not where it ends.

(citations omitted). The Federal Circuit in Godfrey instructed that the responsible person
test is “a test of substance, not form.” Although plaintiff’s contends that, pursuant to
Godfrey, “[t]he mechanical duties of signing checks and preparing tax returns are thus
not determinative of liability under § 6672,” Godfrey specifically identifies authority to sign
checks as an indicia of being a responsible person: “Thus, where a person has authority
to sign the checks of the corporation, or to prevent their issuance by denying a necessary
signature, or where the person controls the disbursement of the payroll, or controls the


                                              23
voting stock of the corporation, he will generally be held ‘responsible.’” Godfrey v. United
States, 748 F.2d at 1576 (citations omitted). The fact that Mr. Noffke, and not Mr. McNulty,
held check signing authority, is a strong indicator of Mr. Noffke’s responsibility. Moreover,
there is no indication in the record, other than assertions at trial, that Mr. Noffke had to
seek Mr. McNulty’s approval to issue checks, such as no record of sign off approvals or
memoranda in BOOMj’s files limiting Mr. Noffke’s authority. Mr. Noffke testified in
response to the question, “are you referring to a written document in which you gave that
authority or you limited your authority in some way and gave it to Bob [McNulty]?” Mr.
Noffke testified that “[t]here is no document to that effect. But what there is is -- again, we
talked about earlier, he approves the payroll. He approves what's being paid.”

        Regarding Form 4180, plaintiff argues that “[n]o representative of the IRS ever
conducted an interview with Mr. Noffke regarding his potential personal liability for the
trust fund recovery penalty with respect to Boomj,”21 and that “Mr. Noffke received a fully
completed Form 4180 that Joanne Stiff had prepared for him.” Therefore, plaintiff tries to
claim that “Mr. Noffke testified that he did not understand the purpose or import of the
Form 4180 that he signed.” Plaintiff further argues that “Mr. Noffke testified that he did not
comprehend the purpose of the Form 4180. He stated that he thought only the person
whose name was shown next to the question was the person identified as responsive to
the question.” Plaintiff, concludes that “[t]herefore, with an affirmative answer Mr. Noffke
implicated himself, in some cases unintentionally.” Crucially, although, plaintiff signed the
Form 4180, on which, as noted by the defendant, “[j]ust above Noffke’s signature is
language which states that the individual declares that the information provided is ‘true,
correct, and complete.’” Furthermore, plaintiff’s numerous years as a certified public
accountant should have alerted him to the nature of the IRS form he was signing.
Moreover, even when attempting to minimize his involvement with the preparation of
Form 4180, plaintiff did not argue that the information was incorrect, only that the
information was incomplete. After walking through the form with plaintiff’s counsel, plaintiff
had the following exchange on cross-examination:

       Q. Okay. So are you saying you signed this -- Mr. Shaff [plaintiff’s counsel]
       just gave you a series of -- or went over a series of questions with you
       related to Section 3, responsibility here on the second page of Exhibit 7,
       and asked you -- I think he asked you would you have responded in this
       manner. Can you -- and you gave various responses indicating that some
       of these responses were incomplete; is that right?

       A. That's correct.

       Q. So -- but none of the responses were -- were wholly wrong when you
       checked yes. You just would have qualified them with an additional --
21Citing to Ms. Stiff’s testimony at trial, plaintiff also notes that Ms. Stiff did not provide
Mr. Noffke with a Privacy Act notice or a copy of IRS Notice 784, which is titled “Could
You be Personally Liable for Certain Unpaid Federal Taxes?” Defendant does not
challenge plaintiff’s statement that no one from the IRS conducted an interview with Mr.
Noffke regarding Form 4180.

                                              24
       A. That's correct.

       Q. Okay. And did you indeed provide any narrative to the IRS at any point
       regarding BoomJ that made those qualifications?

       A. Not that I recall.

        Plaintiff argues that “the chief financial officer of Boomj, Mark Noffke lacked the
authority to direct payments to creditors, a power that Robert McNulty, the chief executor
[sic] officer, retained solely in himself.” Although it is not disputed that Mr. McNulty, unlike
Mr. Noffke, did not have check signing authority on BOOMj’s bank accounts, plaintiff
claims that Mr. Noffke “was the instrumentality that caused checks to be issued and the
designated bills to be paid, but no, he was not an ultimate authority that determined whose
bills were paid and in what amounts.”

        The plaintiff uses the term “ultimate authority” a minimum of eighteen times in his
post-trial filings. The court believes the language employed by plaintiff regarding the
“ultimate authority” is not helpful. In Godfrey, the Federal Circuit stated that “[t]he inquiry
required by the statute is ‘a search for a person with ultimate authority over expenditure
of funds since such a person can fairly be said to be responsible for the corporation's
failure to pay over its taxes.’” Godfrey v. United States, 748 F.2d at 1575 (quoting White
v. United States, 178 Ct. Cl. 765, 372 F.2d 513, 516 (1967)) (emphasis added). As
referenced above, however, Judge Allegra in Salzillo reminds that:

       Notwithstanding the “ultimate authority” language employed in Godfrey, the
       Federal Circuit and other courts have made clear that there can be more
       than one responsible person as “liability attaches to all those under the duty
       set forth in the statute.” Harrington v. United States, 504 F.2d 1306, 1311
       (1st Cir. 1974); see also, e.g., Lubetzky v. United States, 393 F.3d 76, 80
       (1st Cir. 2004); Gephart, 818 F.2d at 473; Godfrey, 748 F.2d at 1574–75;
       Thibodeau v. United States, 828 F.2d 1499, 1503 (11th Cir. 1987); White,
       372 F.2d at 516; Scott, 354 F.2d at 296. “[T]he statute expressly applies to
       ‘any’ responsible persons,” one court has explained, “not just to the person
       most responsible for the payment of the taxes,” noting further that “[t]here
       may be—indeed, there usually are—multiple responsible persons in any
       company.” Barnett, 988 F.2d at 1455 (emphasis in original); see also
       Gephart, 818 F.2d at 476 (“[w]hile it may be that [other corporate officials]
       were more responsible than plaintiff, and exercised greater authority, this
       does not affect a finding of liability against the plaintiff” (emphasis in
       original)); Godfrey, 748 F.2d at 1575; Bolding, 565 F.2d at 663; White, 372
       F.2d at 516; Ghandour, 36 Fed. Cl. at 61.

Salzillo v. United States, 66 Fed. Cl. at 33 (all emphasis in original); see also Jenkins v.
United States, 101 Fed. Cl. at 132. Moreover, in its reply brief, plaintiff acknowledges,
“[t]o clarify, the Plaintiff does not maintain that there can be only one responsible person


                                              25
at an employer; only that at Boomj there was only one decision-maker with the ultimate
authority to compel or prohibit the allocation of Boomj’s funds, Robert McNulty.” Plaintiff’s
main argument that Mr. Noffke was not a responsible person is because of the authority
that, according to plaintiff, Mr. McNulty wielded at BOOMj.

        Principally, plaintiff relies on the decision of Salzillo v. United States, 66 Fed. Cl.
23, in which the court found Mr. Salzillo not to be a responsible person, id. at 36, to support
the position that Mr. Noffke was not a responsible person because of the role he described
for Mr. McNulty and that Mr. McNulty testified to at trial. Plaintiff argues:

       The Salzillo case compares very closely with this case. Mr. Noffke had
       many responsibilities, but designating who to pay was clearly not one of
       them. Mr. McNulty called all the shots on whom to pay and Mr. McNulty had
       some very strongly held beliefs on the cash management of a start up
       company. There is an almost uncanny correspondence between the facts
       of the Salzillo case and the facts of this case. We do not dispute that there
       can be more than one responsible officer of a company, only that in the
       context of Boomj, like Star Foods in the Salzillo case, there was only one
       responsible officer, the chief executive officer.

By contrast, defendant argues that “[a]lthough Noffke has repeatedly joined forces with
McNulty since their BOOMj debacle, Noffke attempts to hang blame solely on McNulty,
and cites to Salzillo in support. But Salzillo supports defendant, not Noffke.” In Salzillo,
the corporation at issue, Star Foods Processing, Inc. (Star Foods), manufactured food
products under government contracts for the federal government. See id. at 24. As
explained by Judge Allegra:

       The former president of Star Foods, Mr. L.C. Robbins, Jr., became involved
       with the company in 1983. At that time, Star Foods lacked sufficient capital
       to expand its business and Mr. Robbins purchased approximately two
       million dollars in equipment to lease to the company. The business,
       nonetheless, continued to flounder and, in or around March of 1986, shortly
       before Star Foods filed for bankruptcy, Mr. Robbins became directly
       involved in the business. During the summer of 1986, he assumed the title
       of president, remaining so through the end of the company's operations. As
       president, by his own admission, Mr. Robbins was the only person
       authorized to negotiate large corporate purchases, contracts, and loans;
       open and close corporate bank accounts; guarantee or co-sign corporate
       bank loans; and determine company financial policy.

Id. at 24-25 (footnote omitted). Subsequently, in 1995,

       the plaintiff, Jose Salzillo, joined Star Foods as a staff accountant, reporting
       to the then head financial officer, Mr. Felix Ramos. Mr. Ramos left around
       1995. In 1996 or 1997 (the record does not disclose which), Adam Chessler,
       who Mr. Robbins described as a “money hunter,” effectively became the


                                              26
       company's chief financial officer, albeit for less than a year. He owned
       around 5,000 shares in the company. Mr. Chessler had signature authority
       over the corporate bank accounts, prepared detailed financial reports for
       Mr. Robbins and the board of directors, and oversaw the department that
       prepared the payroll reports and taxes. Owing to the company's limited
       funds, Mr. Chessler frequently made recommendations to Mr. Robbins as
       to which bills should be paid—toward this end, Mr. Salzillo prepared for Mr.
       Chessler periodic reports reflecting the company's cash status and a list of
       creditors. Those reports were reviewed by Mr. Chessler and eventually
       forwarded to Mr. Robbins. After Mr. Chessler left, Mr. Kirk Nessman was
       hired, as a consultant, to acquire additional funding for the company. He left
       in mid to late 1998. From the time he was hired, through 1998, plaintiff
       successively reported first to Mr. Ramos and then to Mr. Chessler. During
       the periods when the position of chief financial officer was vacant, Mr.
       Salzillo reported directly to Mr. Robbins.

Id. at 25. As it related to the Salzillo plaintiff’s responsibility,

       [m]uch of the trial testimony focused, generally, on how Star Foods used its
       limited funds to pay particular creditors, and, specifically, on who controlled
       whether federal employment taxes would be paid. The record reveals that
       Mr. Salzillo frequently presented Mr. Robbins with cash balance reports and
       discussed with him the financial position of the company. Usually on
       Wednesdays, plaintiff presented Mr. Robbins with an accounts payable
       report, listing the outstanding creditors of the company and the amounts
       they were owed. After considering plaintiff's recommendations, Mr. Robbins
       would check off which creditors were to be paid, modifying the amount if
       less than the full amount owed was to be paid. Effectuating these decisions,
       Mr. Salzillo would then prepare or have prepared the appropriate checks,
       which would either be signed by Mr. Robbins, Mr. Salzillo or some other
       signatory; sometimes Mr. Salzillo or others would stamp Mr. Robbins’ name
       thereon. The record reveals that this practice was relaxed for checks in
       smaller amounts, for essential items, such as utilities, or for other items
       regularly used in production. Larger checks, particularly those targeted to
       overdue debts unrelated to production, could not be issued without Mr.
       Robbins' express approval. Plaintiff testified that around two hundred
       checks were issued by company officials each month. During the periods in
       question, Mr. Robbins also made critical decisions regarding which
       employees would be asked to go without their pay; directed that health
       insurance premiums not be paid, causing the policy to lapse; and either
       directed that child support payments not be forwarded to the appropriate
       agencies or sent checks to such agencies that were returned for insufficient
       funds.

Id. at 26-27 (footnote omitted). Judge Allegra explained that “[o]n numerous other
occasions, Mr. Salzillo urged Mr. Robbins to make payments to the IRS, with several such
discussions escalating into shouting matches. While Mr. Robbins authorized some tax

                                                 27
payments, more frequently he chose to favor other creditors at the expense of the IRS, in
an effort to keep the business afloat,” but “[a]s a result of Mr. Robbins’ decisions, either
no or partial tax deposits were made for the last three quarters of 1999 and the first three
quarters of the year 2000.” Id. at 27. The Salzillo court also noted that:

       Cognizant that he could be held liable, plaintiff did not resign when the
       payroll taxes remained unpaid because, according to his testimony, he
       wanted to stay and ensure that Mr. Robbins made the payments after the
       company was sold. Ms. Sanchez testified that had plaintiff made any
       payments other than those directed to production related costs, Mr. Robbins
       would have threatened to fire him, but, given the company's dire
       circumstances, probably would not have done so. There is no indication
       that, during this period, plaintiff threatened to resign if the taxes were not
       paid.

Id. at 28 (footnote omitted).

        The court agrees with plaintiff that there are some parallels between the above
captioned case and the Salzillo case. In both instances the companies’ limited funds
resulted in the officers making decisions about who to pay or who not to pay and when.
Plaintiff in the case currently before the court argues in its post-trial brief, “Robert McNulty
knew the rules, knew that he called all the shots at Boomj, that he had to approve all
payments, that he instituted that requirement to be able to manage the limited cash
resources in a start-up company like Boomj and that he and he alone had the vision, the
experience and the skill to make a company like Boomj successful.” In both cases, the
creditors, and not the IRS, were paid. In both cases, Mr. Salzillo and Mr. Noffke, the
individuals determined to be responsible people by the IRS, repeatedly raised the issue
of non-payment to the IRS with their superiors, but the liabilities still remained unpaid.
Mr. Noffke testified that the employment tax liabilities “were presented again to -- to Bob
McNulty to make that call whether to make those payments or not.” At trial in the above
captioned case, Mr. Noffke also testified that he urged Mr. McNulty to pay the taxes,
explaining during questioning with his attorney:

       Q. How often would you urge him to pay the federal employment taxes?

       A. It was front and center every time he received one of our sheets.

       Q. And how often was that?

       A. Traditionally weekly. We tried to make payments on Fridays.

Mr. McNulty confirmed Mr. Noffke’s statements and testified that:

       Mark [Noffke] informed me on all payables, whether it's, you know, payroll
       taxes or whatever it might be. In this specific case, the sequence of events
       was pretty straightforward. Joanne [Stiff] came to me and said, hey, we


                                              28
       have -- you know, we have an obligation to pay, you know, taxes, and we
       have an obligation for payroll, but we're going to be short. What should we
       do? And I said, you know, go ahead and, you know, pay the payroll, hold
       the taxes, and I'll call Mark.

In response to the question of whether Mr. Noffke “expressed his views that the -- the
federal employment taxes should be paid.” Mr. McNulty testified that “Yes, he did.” Just
as the plaintiff in Salzillo, Mr. McNulty testified that despite the failure to pay the IRS, “[h]e
[Mr. Noffke] didn't threaten to quit, but he made it pretty clear that he was very unhappy
about it.” Mr. McNulty also made it clear to the court that he believed that regarding the
payment of the employment taxes: “It's my responsibility. It's just that simple.”

       There remains crucial differences, however, between the plaintiff in the above
captioned case and the plaintiff in Salzillo. As explained by Judge Allegra in Salzillo:

       Critically, the record reveals that on at least one occasion, plaintiff
       attempted to pay the IRS, but was thwarted by Mr. Robbins. Thus, in
       December 1999, without Mr. Robbins' knowledge or approval, plaintiff wrote
       and sent to the IRS a check in the amount of $50,000. Shortly after this
       check was mailed, Mr. Robbins asked Mr. Salzillo what the cash balance
       was in Star Foods' main account and was informed that the current balance
       was approximately between $53,000 and $57,000. When Mr. Robbins
       asked Mr. Salzillo to write a check for a load of meat needed for that week's
       production, Mr. Salzillo finally informed him that he could not, because the
       money in the account had been earmarked to cover the IRS check. Mr.
       Robbins became irate and ordered Mr. Salzillo to wire the money to the
       meat supplier instead. He admonished Mr. Salzillo never to write a check to
       the IRS again. An IRS ledger confirms that a check for $50,000 was
       received around this time, but that the check was returned for insufficient
       funds. As a further means of preventing Mr. Salzillo from sending out any
       checks without his permission, Mr. Robbins seized (or had seized) from Mr.
       Salzillo the signature stamp he had previously used to sign checks on Mr.
       Robbins' behalf.

Id. at 27-28. This was an important basis for Judge Allegra to find Mr. Salzillo was not a
responsible person, because as Judge Allegra noted, “[t]he record reveals that Mr.
Robbins so thoroughly controlled the extraordinarily limited finances of the company as
to make it virtually impossible for Mr. Salzillo to send funds to the IRS without his actions
being immediately detected and actual payment averted.” Id. at 34. Judge Allegra
reasoned:

       the record reveals that, long before Mr. Salzillo became the so-called “chief
       financial officer,” Mr. Robbins was constantly apprised of the company's
       precarious cash position, and that, as day-to-day needs arose, he allocated
       the scarcely available funds to maintain and maximize production. As prime
       indication of the depth and effectiveness of his controls, the record
       reveals—and IRS records confirm—that when Mr. Salzillo attempted to pay

                                               29
       the IRS $50,000 without obtaining Mr. Robbins’ permission, the latter
       quickly detected the unauthorized use of funds and shifted money from the
       account in question to prevent the check drafted by Mr. Salzillo from being
       cashed by the IRS.

Id. There is no such evidence in the above captioned case that Mr. Noffke ever considered
paying the IRS directly in opposition to Mr. McNulty’s wishes, despite having the check
writing authority. In fact, regarding his ability to make payments to the IRS that Mr.
McNulty did not approve, Mr. Noffke testified:

       Well, first of all, I didn't have the authority to do that. And could have -- you
       can say that I was embezzling money[22] to take care of my personal liability
       with the IRS. It would not cover the full debt that we were owed, and it would
       handle a certain portion of that. And the -- the liability would still be -- there
       would still be a -- a liability out there, maybe reduced by whatever money I
       was able to hypothetically write to.

         Mr. McNulty was in an interesting position at trial, not having been identified by the
IRS as a responsible person for the BOOMj tax liabilities, despite serving as the Chief
Executive Officer and the Chairman of BOOMj. Mr. McNulty testified that Mr. Noffke did
have the authority to send a payment to the IRS, but that he would not have approved it:
“I mean, the question really shouldn't be does he [Mr. Noffke] have authority. Of course
he has authority to write a check. It's, you know, who's telling him to pay them or not
telling them to pay.” Moreover, while Judge Allegra cites the rapid discovery of the check
sent to the IRS and steps taken to prevent the check from being cashed by Mr. Robbins
in Salzillo as evidence of the “prime indication of the depth and effectiveness of his
controls,” id., despite Mr. McNulty’s statements that he was in control of the accounts,
there is not clear evidence from the trial record that Mr. McNulty exercised the same level
of authority or supervision as Mr. Robbins did in Salzillo. Most notably, Mr. McNulty did
not have check signing authority at BOOMj, whereas Mr. Noffke did. Mr. McNulty
explained this away, stating: “I mean, I didn't control it from writing the check, but I
controlled it from discussing issues with Mark [Noffke] and directing them who should get
paid and who shouldn't get paid.” Unlike the plaintiff in Salzillo, Mr. Noffke appears to
have had significant responsibilities at BOOMj, including, as explained above, “Plaintiff
negotiated settlements with creditors and former employees on behalf of BOOMj” and Mr.
Noffke executed more than 20 wire transfers between accounts worth hundreds of
thousands of dollars in 2009. Mr. Noffke also supervised twenty four employees at BOOM
and Mr. Noffke held hiring and firing within the accounting department, and as Mr. Noffke
testified, the “[t]he accounting department reported up through me.” Furthermore, Mr.
McNulty’s original role at BOOMj was the nonexecutive chairman of the company.
Moreover, Mr. McNulty indicated that he “worked on the side of the business which was
the business strategy, business model, and, you know, the direction of the company from
that standpoint, and then raising capital for the company,” and not day to day fiscal
management. Therefore, the court believes that although similarities exist between the
22
 Plaintiff cites no authority for the proposition that payment to the IRS of taxes owed by
BOOMj would be considered embezzlement by Mr. Noffke.

                                              30
plaintiff in Salzillo, who was found not to be a responsible person, and Mr. Noffke, crucial
differences are apparent, such that the court disagrees with plaintiff that “[t]here is an
almost uncanny correspondence between the facts of the Salzillo case and the facts of
this case.”

       Moreover, the record reflects that Mr. Noffke has continued to work for Mr. McNulty
after BOOMj ceased operations. According to the joint stipulations of fact, “Mr. McNulty
set up an arrangement whereby a subsidiary of BOOMj, called Kaching Kaching, Inc.
(‘KCKC’) purchased certain assets of BOOMj for 20.8% of the shares of common stock
of KCKC” and Mr. Noffke became the Chief Financial Officer of Kaching Kaching, Inc.
while Mr. McNulty became the Chief Executive Officer. As indicated above, Kaching
Kaching, Inc. also failed to pay the employment tax liabilities for the tax period ending on
December 31, 2010, and the IRS assessed plaintiff with a trust fund recovery penalty for
that failure. Despite that failure, Mr. Noffke continued to work for Mr. McNulty, most
recently as the Chief Executive Officer of a company called Serendipity Cafe. In fact, Mr.
Noffke has repeatedly continued to work for Mr. McNulty, despite the fact that plaintiff
also claimed that he felt physically threatened by McNulty when they worked together at
BOOMj. Jeffrey Aaronson, another BOOMj employee described McNulty’s management
approach as “[m]anagement by bullying.”23 Joanne Stiff labelled McNulty’s management
style as “not very good.”24. Although not dispositive regarding plaintiff’s status as a
responsible person for BOOMj, the court is left to question the statements made at trial
about the total control Mr. McNulty supposedly exercised or the feeling of being
threatened by Mr. McNulty Mr. Noffke really felt, given that Mr. Noffke continued to accept
new assignments from, and continued to work for, Mr. McNulty, including at the time of
trial.

23 The following exchange between plaintiff’s counsel and Mr. Aaronson occurred
regarding Mr. McNulty:

       Q. How were those disagreements resolved with Mr. McNulty?

       A. Mr. McNulty would put his foot down and say, I'm in charge, and this is
       what we're going to do.

       Q. Would Mr. McNulty use loud -- a loud voice?

       A. You could hear Mr. McNulty screaming sometimes from down the hall.

       Q. Would he use profanity?

       A. Frequently.
24 Ms. Stiff further testified, “I don’t know if it would be management by bullying, but I think
it was more of unrealistic promises made and management based off of what he promised
people. And I can’t -- I don't think I’ve ever -- me personally, Bob’s [Mr. McNulty] never
bullied me. So I never got that feeling of that.”


                                              31
       Plaintiff also quotes extensively from Judge Allegra’s opinion in Salzillo to provide
additional case support for the argument that plaintiff is not a responsible person. For
example, plaintiff quotes this entire paragraph from the Salzillo decision:

       These cases, many of which are in this court, stress that while an
       individual's title or authority to sign checks may suggest a theoretical
       authority to effectuate such a payment, those features are not controlling if,
       based on the record as a whole, it preponderates that a given individual
       actually lacked the effective ability to pay taxes over to the IRS. See, e.g.,
       United States v. Rem, 38 F.3d 634, 647 (2d Cir. 1994) (the power to sign
       checks and the holding of corporate office “can exist in circumstances
       where the individual in reality does not possess significant control over
       corporate finances”); Barrett, 580 F.2d at 453 (despite having authority to
       sign checks, corporate director not “responsible officer” where corporate
       president controlled which creditors would be paid, including the IRS);
       Bauer, 543 F.2d at 149 (“Mere office holding of and by itself does not render
       one responsible for the collection and paying over of employee withholding
       taxes.”); De Alto, 40 Fed. Cl. at 878 (“While the existence of another
       responsible person would not excuse plaintiff, [plaintiff's superior] retained
       such exclusive authority that plaintiff effectively had none when dealing with
       creditors”); Williams v. United States, 25 Cl. Ct. 682, 684 (1992) (officer that
       had written checks to creditors other than the IRS held not responsible
       where “though plaintiff had check writing authority and seemingly important
       titles, he lacked any independent authority within [the company].”); Heimark
       v. United States, 18 Cl. Ct. 15, 21–23 (1989) (treasurer not responsible
       person where responsibilities were ministerial and president of company
       was “autocratic” in the control of funds). As summarized by a leading
       commentator, these cases hold that “the concept of responsibility connotes
       more than corporate title” or a “theoretical authority” to pay over taxes, but
       rather “arises out of control actually exercised over the financial operations
       of the business.” Michael I. Saltzman, IRS Practice and Procedure ¶ 17.07
       (2005).

Salzillo v. United States, 66 Fed. Cl. at 35 (footnote omitted).

        The facts of the cases cited in Salzillo, however, are not closely related to Mr.
Noffke’s situation. In Barrett, the United States Court of Claims explained that the Barrett
plaintiff “had no responsibility for making up the payroll. She had no authority over
payment of the salaries of company employees. Creditors did not ask for her when
inquiring about being paid. She had no responsibility for the preparation of tax returns for
the company, nor did she sign any such returns. Plaintiff did not negotiate company
contracts, bill customers, order supplies or hire and fire employees.” Barrett v. United
States, 217 Ct. Cl. 617, 626, 580 F.2d 449, 453 (1978). In the above captioned case, Mr.
Noffke ran the accounting department, supervising twenty four employees, and held hiring
and firing authority. Furthermore, Mr. Noffke negotiated settlements with creditors and
former employees on behalf of BOOMj. In Bauer, the Court of Claims identified the Bauer


                                             32
plaintiff as “an outsider with respect to the financial and fiscal affairs of the company. He
did not meet with representatives of the bank which was principally concerned with MATI's
[Management and Technology, Inc.] financial condition.” Bauer v. United States, 211 Ct.
Cl. 276, 543 F.2d 142, 149 (1976). Mr. Noffke, by contrast was intimately familiar with
the financial affairs of the company, responsible for public reporting duties and helping to
negotiate the sale of Local Ad Link, BOOMj’s most profitable subsidiary.

        In De Alto, the United States Court of Federal Claims concluded that the De Alto
plaintiff was not a responsible person because

       [t]here is no evidence here of routine payments signed by plaintiff.
       Defendant produced only two checks to creditors signed by plaintiff over the
       course of his years as vice-president. Both involved the limited emergency
       situations for which plaintiff was given authority by Mr. Housman to sign
       checks. Plaintiff's lack of authority is further demonstrated by his dismissal.
       Because he did not have the authority to direct payments or to prevent
       them, plaintiff was not a responsible person under section 6672.

De Alto v. United States, 40 Fed. Cl. 868, 878, appeal dismissed, 168 F.3d 1321 (Fed.
Cir. 1998). Mr. Noffke, however, regularly made payments, and, was at times, the only
check signing authority at BOOMj. Although Mr. Noffke and Mr. McNulty at trial claimed
that Mr. McNulty had effective control over which payments to make and prioritize, in De
Alto, that control was explicit. As noted by the De Alto court, Mr. Housman, the president
and primary stockholder, issued a March 3, 1990, memorandum which

       explicitly limits the authority to approve payments to Mr. Housman. While
       the existence of another responsible person would not excuse plaintiff, Mr.
       Housman retained such exclusive authority that plaintiff effectively had
       none when dealing with creditors. The fact that Mr. Housman stated in a
       memorandum that plaintiff had ‘full authority’ related only to dealing with
       employees on behalf of Mr. Housman, not in dealing with creditors or
       deciding on how funds were to be disbursed.

Id. at 878. Mr. Noffke, by contrast, executed numerous wire transfers for the various
company accounts totaling more than six figures. Likewise, Mr. Noffke testified in
response to the question, “are you referring to a written document in which you gave that
authority or you limited your authority in some way and gave it to Bob [McNulty]?” Mr.
Noffke testified that “[t]here is no document to that effect. But what there is is -- again, we
talked about earlier, he approves the payroll. He approves what's being paid.”

       In Williams, the United States Claims Court noted that:

       Plaintiff controlled no voting stock in WBC [Williams Bridge Company]. He
       could not prevent issuance of a check by denying his signature and he had
       no authority within the corporation to sign checks to creditors unless
       authorized by his father. Plaintiff had no significant independent power over


                                              33
       financial matters. He was the submissive son of a domineering father. He
       was obliged to do, and he did, whatever his father instructed.

Williams v. United States, 25 Cl. Ct. 682, 684 (1992). Moreover, although the Williams
plaintiff was in name the vice president, treasurer, and officer manager, “he had little
independent authority and at all relevant times was kept on a very ‘short leash.’ His
supervisory authority was limited to two office employees-a secretary and a bookkeeper-
and even that power was subject to his father's override.” Id. at 683-84. Mr. Noffke, on
the other hand, had substantial authority over the accounting department and the SEC
compliance at BOOMj. Furthermore, during the events at issue when the Williams Bridge
Company failed “to segregate and pay over to the IRS social security and income taxes
withheld from employees of the Williams Bridge Company (WBC) during the last quarter
of 1984 and the first half of 1985,” id. at 682, the Williams plaintiff was in his twenties,
whereas Mr. Noffke at the time of the events in question regarding at BOOMj, had been
in the accounting industry for decades.

      The court does not believe, as found in Heimark v. United States, that Mr. Noffke’s
responsibilities were ministerial. The Heimark court explained that the Heimark

       plaintiff alone authorized no expenditures, made no memorable decisions,
       issued no general orders, and exerted no particular influence over the
       course of events at GSI [Getting Services, Inc.]. Neither his uncompensated
       position as Treasurer nor his position of Comptroller, for which he received
       ‘take home’ pay of $11,506.65 in 1979, conferred upon plaintiff a status to
       even significantly participate in, let alone control, the allocation of GSI funds.

Heimark v. United States, 18 Cl. Ct. 15, 21 (1989). Moreover, the plaintiff in Heimark
“enjoyed no particular respect or deference amongst the employees of GSI by virtue of
his title as Treasurer or his position as Comptroller. To the contrary, plaintiff supervised
no one at GSI other than, to a limited degree, a single secretary.” Id. As noted above, Mr.
Noffke supervised the accounting department, supervising twenty four employees, and
held hiring and firing authority. Furthermore, Mr. Noffke held substantially responsibility
for BOOMj’s SEC compliance, regarding which plaintiff testified, “I would estimate
basically 80 percent of my duties were in the public reporting framework.” Additionally, as
defendant points out, citing Heimark v. United States, 18 Cl. Ct. at 19, “[a]lso telling are
Noffke’s choices following the company’s demise. Unlike the plaintiff in Heimark, Mr.
Noffke did not resign from Boomj.com when payroll taxes were not paid. Instead, he
helped McNulty fold BOOMj into a new business scheme, joined McNulty in this
endeavor—which also quickly failed—and joined McNulty for another business venture
that remains in place until today.” In sum, none of the cases cited in Salzillo, nor Salzillo
itself, supports plaintiff’s contention that Mr. Noffke was not a responsible person at
BOOMj. Despite plaintiff’s protestations to the contrary, after considering the trial
testimony, trial exhibits, and all the arguments in the parties’ briefs, as well as the relevant
case law, the court determines that Mr. Noffke is a responsible person for purposes of 26
U.S.C. § 6672.



                                              34
Willfulness

        A individual being a responsible person, however, is insufficient to trigger liability
under 26 U.S.C. § 6672. As indicated above, the United States Court of Appeals for the
Federal Circuit indicated that “a person is subject to a 100 percent penalty if he satisfies
two separate statutory requirements. First, he must be under a duty to ‘perform the act in
respect of which the violation occurs,’ (§ 6671(b)) and that duty is ‘to collect, truthfully
account for, and pay over’ any taxes           (§ 6672). Such a person is a ‘responsible
person.’” Godfrey v. United States, 748 F.2d at 1574 (footnote omitted). The Federal
Circuit continued: “Second, the ‘responsible person’ must have ‘willfully’ failed to collect,
truthfully account for, and pay over, or have ‘willfully’ evaded or defeated the tax or tax
payment,” and “both statutory requirements must be present for the 100 percent penalty
to be imposed.” Id. (citing McCarty v. United States, 194 Ct. Cl. 42, 437 F.2d at 967).
Having determined that Mr. Noffke is a “responsible person,” the court turns to the second
requirement, the willfulness requirement. Although defendant argues that “Noffke willfully
failed to pay BOOMj’s employment taxes,” plaintiff has not made arguments specific to
the willfulness element of 26 U.S.C. § 6672.

       As noted in Farkas v. United States “as the text makes clear, section 6672 includes
a scienter element requiring that the responsible person must have ‘willfully’ failed to
make the requisite withholding.” Farkas v. United States, 57 Fed. Cl. at 140 (emphasis in
original). Indeed, 26 U.S.C. § 6672(a), specifically mentions the word willfully twice:

       Any person required to collect, truthfully account for, and pay over any tax
       imposed by this title who willfully fails to collect such tax, or truthfully
       account for and pay over such tax, or willfully attempts in any manner to
       evade or defeat any such tax or the payment thereof, shall, in addition to
       other penalties provided by law, be liable to a penalty equal to the total
       amount of the tax evaded, or not collected, or not accounted for and paid
       over.

26 U.S.C. § 6672(a) (emphasis added); see also Jenkins v. United States, 101 Fed. Cl.
at 130; Brinskele v. United States, 88 Fed. Cl. at 338. The Federal Circuit has elaborated
that “‘the failure to pay the overdue taxes [is] willful has been seen . . . as calling for proof
of a voluntary, intentional, and conscious decision not to collect and remit taxes thought
to be owing—and not as requiring a special intent to defraud or deprive the Government
of monies withheld on its account.’” Godfrey v. United States, 748 F.2d at 1576-77
(quoting Scott v. United States, 173 Ct. Cl. 650, 354 F.2d 292, 295 (1965) (alternations
in original)). The willfulness requirement “does not, however, require a showing of specific
intent to defraud or otherwise of an evil motive.” Gann v. United States, 121 Fed. Cl. at
489 (citing Godfrey v. United States, 748 F.2d at 1577); see also Godfrey v. United States,
748 F.2d at 1577 (quoting Scott v. United States, 173 Ct. Cl. 650, 354 F.2d at 295) (“The
focus of inquiry is rather ‘on the deliberate nature of the individual's election not to pay
over the money and the circumstances of that refusal.’”).




                                               35
       The Court of Federal Claims in Kobus explained that:

       There are two basic ways that a person can willfully fail to pay over
       withholding taxes: a person acts willfully if the employer has funds to pay
       the taxes and the person either (1) knowingly chooses not to pay over the
       withholding taxes or (2) acts with a reckless disregard of a risk that the
       withholding taxes will not be paid.

Kobus v. United States, 103 Fed. Cl. at 588 (citing Godfrey v. United States, 748 F.2d at
1577); see also Godfrey v. United States, 748 F.2d at 1577 (quoting Mazo v. United
States, 591 F.2d 1151 (5th Cir.), cert. denied, 444 U.S. 842 (1979)) (“The willfulness
requirement is satisfied ‘if the responsible person acts with a reckless disregard of a
known or obvious risk that trust funds may not be remitted to the Government, . . . such
as by failing to investigate or to correct mismanagement after being notified that
withholding taxes have not been duly remitted.’”); Gann v. United States, 128 Fed. Cl. at
401-402; Waterhouse v. United States, 122 Fed. Cl. at 285.

        As noted above, “[t]he separate requirement that a responsible individual also have
acted willfully in failing to withhold and/or remit the tax also presents a fact-intensive
inquiry, calling for ‘proof of a voluntary, intentional, and conscious decision not to collect
and remit taxes thought to be owing.’” Gann v. United States, 121 Fed. Cl. at 489 (quoting
Godfrey v. United States, 748 F.2d at 1577). As previously indicated, although plaintiff
states willfulness is a question presented in this case in his submissions to the court,
plaintiff does not separately address the willfulness requirement. Notably, plaintiff begins
its post-trial brief: “The only issue in this case is whether plaintiff, Mark V. Noffke, was a
responsible person within the meaning of 26 U.S.C. §6672(a), the trust fund recovery
penalty, of Boomj.com, Inc. during each of the four quarters of 2009.” (internal citations
omitted). Additionally, the only reference to willfulness in the plaintiff’s reply brief is to
argue: “Awareness goes to willfulness, not responsibility.”

          The parties have stipulated that “BOOMj failed to deposit its employment tax
withholdings in the first, second, third and fourth quarters of 2009. Plaintiff was aware at
the time of the delinquencies of BOOMj’s failure to meet its employment tax obligations.”
In addition, the trial testimony demonstrated that Mr. Noffke had actual knowledge of
outstanding liabilities. Mr. Noffke himself testified that “notices come from the IRS
notifying you of the deficiencies,” and that BOOMj generated weekly reports identifying
liabilities, including the tax payment requirements and deficiencies. Moreover, Mr. Noffke
confirmed with both plaintiff’s counsel and defendant’s counsel during trial his knowledge
of those liabilities. With defendant’s counsel, Mr. Noffke discussed the conversations
about not paying the employment tax liabilities with Mr. McNulty:

       Q. We’ve talked a lot today about Mr. McNulty and what he would say to
       you when you would have these conversations about wanting to pay the
       employment tax liabilities, and I think you said he was always saying that
       money was just around -- around the corner; is that right?



                                             36
      A. That’s correct.

      Q. And this is referring -- you heard how many times in your work with Mr.
      McNulty?

      A. Many -- many times.

      Q. Over the course -- I guess beginning in 2008 when you first --

      A. Beginning in 2008 when we first incurred missing the payroll liability the
      first time. And actually that happened in 2008, the promise was fulfilled. We
      were able to pay those payroll taxes in 2008 in 2009.

      Q. Right. But the same was not true of the employment tax liabilities
      incurred in 2009.

      A. That's correct.

With plaintiff’s counsel Mr. Noffke had the following exchange:

      Q. Would you say that you urged Mr. McNulty to pay the federal
      employment taxes?

      A. Yes, I would.

      Q. How often would you urge him to pay the federal employment taxes?

      A. It was front and center every time he received one of our sheets.

      Q. And how often was that?

      A. Traditionally weekly. We tried to make payments on Fridays.
                                           ...

      Did the tenor of your discussions with Mr. McNulty change from the
      beginning of 2009 to the end of 2009 regarding employment taxes?

      A. Yes, it did.

      Q. Would you tell the Court.

      A. It got a little bit more intense because of -- the dollar amount was getting
      extremely high. And Bob -- again, it's always the next deal. We heard him
      talk about, I would do this again. I -- you know, he -- he's still believe -- I
      mean, I'm looking at more realistic. I'm looking at what are our liabilities and
      how do you take care of the various vendors, suppliers, payroll, you know,


                                            37
      trust fund obligations to -- basically to the point of, you know -- you know, is
      this money ever going to come in? When does it stop?

Mr. Noffke also testified about speaking with Mr. McNulty as follows:

      [I]f he asked me what needed to be paid, it was going to be payroll taxes.
      But that next step, I would give him my recommendations.

      Q. After he said we're not paying those right now.

      A. That's correct.

Mr. McNulty also confirmed that he discussed the unpaid taxes with Mr. Noffke. As
indicated in this following exchange with plaintiff’s counsel:

      Q. And he expressed his views that the -- the federal employment taxes
      should be paid.

      A. Yes, he did.

      Q. Yet they were not.

      A. Correct. It's my responsibility. It's just that simple.

          The parties have stipulated that creditors were paid with available funds while
BOOMj had outstanding employment tax liabilities with the IRS, and Mr. Noffke also
testified at trial that other vendors were paid even though there were the outstanding tax
liabilities, which, as demonstrated by Mr. Noffke’s own testimony, Mr. Noffke was aware
of the unpaid tax liabilities. Referring to the cost of BOOMj’s servers, Mr. Noffke had the
following exchange with his attorney:

      Would that be a bill that Mr. McNulty would give priority to?

      A. Yes, that would be. Anything to keep the business up and running was
      his priority.

      Q. When you would have these discussions with Mr. McNulty, would you
      make recommendations as to what should be paid?

      A. If I felt – we’re in this court right now of what type of listening powers I
      had with him. My whole priority, and -- and I -- I do it every day. I -- on the
      taxes, it was so important, and that's why we put it front and center for him
      that that is a responsibility of the company. I was -- working with this
      company and this operation and being in that position is -- is -- is a very
      difficult position for myself because of recognizing the exposure and the



                                              38
       potential of what we’re -- you know, what the company had, the liability there
       that was outstanding.

Although Mr. Noffke continually painted Mr. McNulty as the sole decision maker, as the
signatory on the accounts, it was Mr. Noffke who made the payments to the vendors. As
noted above, in 2009, Mr. Noffke made numerous wire transfers, and at trial he testified
that “[o]n certain large amounts to some of our vendors, I would do the wire transfer.” As
Mr. Noffke had knowledge of, and understood, the tax liability, as well as the possibility
of personal liability, and he, nonetheless, himself paid out to creditors despite the
outstanding payments due the IRS, Mr. Noffke perfectly fits the definition for acting
willfully. See Kobus v. United States, 103 Fed. Cl. at 588 (“[A] person acts willfully as a
matter of law if, after he has actual knowledge of a tax deficiency, he uses unencumbered
funds to pay other creditors instead of the United States.”).

       In addition, as the parties have stipulated, “Plaintiff signed a Form 4180 interview
form regarding his role at BOOMj and his knowledge of the unpaid liabilities on May 18,
2010. Although discussed above, most notable about the Form 4180, is the question:
“During the time the delinquent taxes were increasing, or at any time thereafter, were any
financial obligations of the business paid,” to which the answer was yes, with the
explanation “Standard operational expenses to keep company in business.” In response
to the question: “Who authorized them to be paid?” the Form 4180 stated: “Mark Noffke.”
Defendant argues that, “[a]s Noffke was intimately aware of the unpaid tax liabilities to
the IRS, and had the ability to sign a check or wire funds to the IRS to satisfy that debt
but did not do so, he has acted willfully under § 6672, and this Court should rule
accordingly.”25 Considering all the evidence introduced at trial, including the exhibits and
25In addition, as a long time Chief Financial Officer and certified public accountant, Mr.
Noffke was aware of both of the requirements of 26 U.S.C. § 6672 and the ability of the
government to recover the nonpayment of employment taxes. In fact, Mr. Noffke
previously had been responsible for paying payroll taxes as Chief Financial Officer of
National Storm Management. Mr. Noffke also testified at trial on cross-examination:

       Q. [H]ow long have you known about 6672 or the trust fund recovery
       penalties? When did you learn about that ability of the government?

       A. Most likely in college.

       Q. And you said -- testified earlier that when Mr. Shaff showed you the Form
       4180, that you -- you knew what that was for; is that right?

       A. That’s correct.

       Q. So you understood that the Form 4180 is a tool that the Internal Revenue
       Service uses to assess someone's or to make a determination regarding
       someone's status as a responsible officer of a company and their willfulness
       regarding the nonpayment of employment taxes; is that right?


                                            39
the testimony, the court agrees with defendant and concludes that Mr. Noffke willfully
failed to pay the obligated employment taxes. Based on the record before the court, the
court finds that plaintiff knowingly chose not to pay over the withholding taxes. See Kobus
v. United States, 103 Fed. Cl. at 588 (“[A] person acts willfully if he has actual knowledge
of a past or present withholding-tax deficiency and he voluntarily chooses not to pay the
United States. More specifically, a person acts willfully as a matter of law if, after he has
actual knowledge of a tax deficiency, he uses unencumbered funds to pay other creditors
instead of the United States.” (footnote and citation omitted)). As plaintiff is both a
responsible person and willfully failed to pay the required taxes, plaintiff is liable under 26
U.S.C. § 6672.


                                       CONCLUSION


        As noted in Jenkins v. United States: “An individual against whom the IRS has
made a section 6672(a) assessment ordinarily has the burden of proving, by a
preponderance of the evidence, that at least one of the composite elements of liability
under that section is absent. And that burden squarely falls on plaintiff here.” Jenkins v.
United States, 101 Fed. Cl. at 131 (citations omitted). Mr. Noffke has failed to meet the
burden to prove he was not a responsible person. Further, plaintiff has not demonstrated
that the failure to pay the required taxes was not willful. Therefore, Mr. Noffke is both a
responsible person and willfully failed to pay BOOMj’s employment taxes for 2009. The
court understands that Mr. Noffke is in a difficult position, as he was identified as the
responsible person by the IRS, instead of Mr. McNulty, who, in the court’s view, may have
had an equal, if not greater, responsibility to make the payments to the IRS, but who set
himself up in the company without check signing authority on BOOMj’s accounts, leaving
that authority to others, including Mr. Noffke. This, however, does not relieve Mr. Noffke
of his responsibilities, which plaintiff plainly understood, and the IRS sought to recover
payment from Mr. Noffke, and not Mr. McNulty, for unexplained reasons. Therefore,
plaintiff’s complaint is DISMISSED. Defendant’s counterclaim is GRANTED. A schedule


       A. That’s correct.

       Q. And that’s something you've understood for a long time. You've known
       about 6672 for a long time; is that right?

       A. Don't know if I referred to it by the code number, but that officers of
       companies could become liable for payroll taxes.

       Q. And you -- when you took on this -- this role as CFO of -- of BoomJ, did
       you understand that that was a potential -- that -- that a role such as that
       could carry a potential personal liability should there be nonemployment --
       nonpayment of employment taxes?

       A. Yes, I did.

                                              40
for further proceedings to resolve the amount owed to defendant will be set by separate
Order.

      IT IS SO ORDERED.

                                                        s/Marian Blank Horn
                                                        MARIAN BLANK HORN
                                                                Judge




                                          41
