In Hi-Q Personnel Inc. v. Commissioner; 132 T.C. No. 13 (5/4/09), the Tax Court applied the doctrine of collateral estoppel from the conviction of the president and sole shareholder under Section 7202 (failure to withhold and pay over) to the corporation. Since collateral estoppel usually applies only to the same shareholder, the Tax Court found that there was sufficient privity between the president and sole shareholder on the one hand and the corporation on the other. The Tax Court noted the truism that corporations act through their officers and, given his relationship, the president's actions were the corporation's actions. The Tax Court alternatively made an affirmative finding independent of collateral estoppel that the corporation was guilty of fraud with respect to the failure to withhold and pay over. As a result of those alternative holdings:
1. The corporation was liable for the payroll taxes.
2. The corporation was liable for the civil fraud penalty.
3. The unlimited statute of limitations applies.
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