Branch got a check from Ben to the US Treasury, he noted on the check what it was for and he put the same information on the back of the check and in a cover letter. After the check cleared, he filled out Form 830 Request for Refund. He noted that Ben had paid the trust fund taxes for one Pedro Gonzales a bakery assistant and that he did not owe the taxes because he did not intentionally fail to withhold the taxes. The check was for the first quarter of 2007 and for $28.70. The refund request was sent to the IRS. Ben got a letter from the Service demanding payment of the trust fund taxes. Branch responded to the letter by sending a letter back to the IRS noting that it was Ben’s position that the IRS owed him money. This seemed to stop the letters. A few months later, Branch received a letter noting that the refund was denied. This was Ben’s ticket to the US Claims Court. /

Branch filed suit for Ben in the United States Court of Federal Claims in Washington, D.C. He claimed that Ben was not intentionally responsible for the failure to collect and pay over taxes. He alleged that the responsible party was the evil Sam Shadewell. About sixty days later the government responded denying everything and countersuing for the full amount. After some discussion between counsel depositions were agreed to. There was one problem for everyone, no what knew where Sam had disappeared to. Without a live witness to rebut Ben’s testimony and those of his co-workers the Government had little choice but to settle. It was agreed that Ben would pick up one quarter of taxes for a total of $10,000. This was far less than he would have spent pursuing the matter to trial and risking perhaps that the Government would find Sam on the eve of trial. Ben was happy that he was in the clear.

Then of course came the certified letter from the State Department of Taxation assessing its substitution tax on Ben personally for unpaid sales taxes and unpaid employment taxes. Ben notified the state that he was appealing the assessment and after a few months a meeting was held with the State Tax Commissioner. The Commissioner did not understand the law very well and was loathe to grant any relief in the matter and challenged Ben to go to Court. Ben then appealled the assessment to the local Circuit Court. As trial neared the state figured out that it didn’t have the witness it needed, namely Sam, and Ben’s attorney produced affidavits from employees and Ben stating that he was not intentionally responsible. At that point the State agreed withdraw the assessment.