UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JIM CORNS,
Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA,
Commissioner of Internal Revenue,
                                                               No. 97-2188
Defendant-Third Party Plaintiff-
Appellee,

v.

JACK MCDANIELS, JR.,
Third Party Defendant.

Appeal from the United States District Court
for the Southern District of West Virginia, at Charleston.
Dennis Raymond Knapp, Senior District Judge.
(CA-96-568-2)

Argued: January 28, 1998

Decided: March 16, 1998

Before WILKINSON, Chief Judge, and ERVIN and HAMILTON,
Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Charles Edward Hurt, Charleston, West Virginia, for
Appellant. Tamara Wenda Ashford, Tax Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON
BRIEF: Loretta C. Argrett, Assistant Attorney General, Rebecca A.
Betts, United States Attorney, Bruce R. Ellisen, Michelle B.
O'Connor, Tax Division, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The Internal Revenue Service (IRS) assessed Appellant Jim Corns
a penalty under 26 U.S.C. § 6672 for being a"responsible person"
who willfully failed to pay employment withholding taxes. Corns
sued the United States and the Commissioner of the IRS to void the
§ 6672 assessment and to recover personal income tax refunds that
the IRS applied as payments to that assessment. The United States
counterclaimed for the unpaid balance of the assessment.

Corns appeals the district court's grant of summary judgment in
favor of the United States, and the entry of judgment against him in
the amount of $191,484.09. Corns argues that there were still disputed
issues of material fact about (1) whether he was a"responsible per-
son" who willfully failed to pay withheld employment taxes, and (2)
the correct amount of the outstanding assessment. We affirm.

I

In 1985, Jim Corns, Jack McDaniels and Tracy Grimmett formed
a business called Beech Branch Mining Company (Beech Branch).
Beech Branch mined coal in Man, West Virginia, and sold the coal
on an output-contract basis to Benafuels, Inc. (Benafuels). Corns,
McDaniels and Grimmett each contributed $10,000 to Beech Branch
to pay for start-up expenses and, at all times relevant to this case,

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served as officers and directors of the company. Corns served as sec-
retary of Beech Branch from July 1986 to February 1987; as vice
president from February to December 1987; and as president from
December 1987 to January 1988, when he resigned from Beech
Branch.

Corns and the other officers had no "assigned" duties. Instead, they
performed all tasks associated with the management and operation of
the corporation, including paying bills, signing checks, hiring miners
and purchasing supplies. The officers hired an accountant who kept
Beech Branch's books and prepared paychecks. On payday, the
accountant would deliver the paychecks to the mine office, and one
of the officers would sign the checks and deliver them to the employ-
ees. The accountant also prepared the company's tax returns, which
were signed by McDaniels. It is clear from the record that Corns was
not only authorized to sign checks, but actually did so. In addition, he
ordered and paid for supplies, and hired employees.

In mid-1986, Beech Branch began to suffer economic hardship
because its coal revenues were insufficient to meet its overhead
expenses. As a result, Beech Branch began to fall behind in the pay-
ment of withheld employment taxes. The company ultimately failed
to pay withholding taxes for the third and fourth quarters of 1986; the
first, second and fourth quarters of 1987; and the first quarter of 1988.

Corns became aware of the unpaid taxes in late 1986 or early 1987.
Over the next several months, the unpaid taxes were the subject of
several informal meetings between Corns and the other officers. In
addition, Corns and the other officers had several phone conversations
with the president of Benafuels concerning Beech Branch's tax liabil-
ity. In these conversations, Beech Branch sought to increase the con-
tract price of the coal it sold to Benafuels, but was unable to do so.
Instead, Benafuels' president suggested that Beech Branch delay the
payment of withholding taxes until revenues improved.

Although Corns was aware that Beech Branch was not paying
withholding taxes, Corns continued to purchase supplies and pay
employees and other creditors. The record shows that, after December
1986, Corns signed more than 240 payroll checks, and signed more
than 290 checks payable to creditors other than the IRS.

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In 1989, the IRS determined that Corns was a person responsible
for the failure of paying withholding taxes, and assessed him a pen-
alty under § 6672 equal to the amount of the tax owed.1 The amount
of the penalty was assessed at $99,734. The IRS subsequently cred-
ited Corns with overpayments reported on his individual federal
income tax returns for the years 1990 through 1994.

In November 1995, Corns filed an administrative claim for a
refund of the amounts credited to his § 6672 liability. When that
administrative action was unsuccessful, Corns filed the present action
on June 12, 1996. He sought to void the § 6672 assessment and
recover the amount credited to that assessment. The United States
counterclaimed for the balance of the assessment, plus interest and
costs.

After discovery, the United States filed a motion for summary
judgment, which the district court granted. Relying on our decision in
O'Connor v. United States, 956 F.2d 48 (4th Cir. 1992), the district
court held that the facts of the case demonstrated that Corns was a
"responsible person" within the meaning of§ 6672 who willfully
failed to pay the required taxes. The district court entered judgment
in the full amount claimed by the United States as the outstanding
amount of the assessment.2 On appeal, Corns argues that the grant of
summary judgment was inappropriate because there were genuine
issues of material fact regarding (1) whether he was a "responsible
_________________________________________________________________
1 Section 6672 provides, in relevant part, that:

          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 will-
          fully 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).
2 The IRS had also assessed a separate penalty on McDaniels. When
Corns filed this suit, the United States filed a third-party complaint
against McDaniels. The district court's entry of judgment was against
both Corns and McDaniels. However, only Corns has appealed.

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person" who willfully failed to pay withheld employment taxes, and
(2) the amount still due under his § 6672 assessment.

II

Our review of the record, the opinion of the district court and the
arguments of counsel has revealed that this appeal is without merit.
Accordingly, we affirm the judgment of the district court for the rea-
sons stated by that court in its opinion.3 See Corns v. United States,
CA-96-0568 (S.D. W. Va. Aug. 13, 1997).

AFFIRMED
_________________________________________________________________
3 We note also that Corns has directed us to no evidence in the record,
and we could find none, that would support his contention there were
disputed issues of material fact regarding the amount for which the IRS
counterclaimed. Consequently, we also affirm the amount of the judg-
ment entered by the district court.

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