The 100 percent penalty provision of I.R.C. section 6672 imposes a penalty that can far exceed the maximum criminal penalties for fraud or tax evasion. For this reason, the Internal Revenue Service (I.R.S.) should only assess the 100 percent penalty against persons who are clearly liable for the penalty. As Justice Rehnquist said in his dissent in United States v. Sotelo, the 100 percent penalty provision imposes a potentially crushing liability on corporate officials-a liability that is nondischargeable (in bankruptcy) in its entirety and virtually in perpetuity. This Note will discuss section 6672, including its purpose, history, and specific requirements. This Note will then discuss the Howard v. United States case and analyze it in terms of the problems associated with section 6672. In conclusion, this Note will suggest solutions to these problems, including a new test for determining who should be responsible for the 100 percent penalty.
James E. Hungerford, Howard v. United States: Who Should Be Responsible for the 100 Percent Penalty?, 12 SEATTLE U. L. REV. 451 (1983).