United States v. Robert Alan Jones, United States of America v. Renate Schiff, of the Estate of Marvin James Schiff

After a bench trial, the presiding magistrate judge found that the defendants in this case were liable under Internal Revenue Code (“IRC”) § 6672 as responsible persons who willfully failed to collect, truthfully account for and pay over to the United States payroll taxes. We have jurisdiction under 28 U.S.C. § 1291 . Because we hold that the factual finding that the defendants are “responsible persons” under § 6672 is clearly erroneous, we reverse the decision of the district court.

I. PRIOR PROCEEDINGS AND FACTUAL BACKGROUND

Marvin James Schiff (“Schiff’) was the owner of real property in Las Vegas and a hotel and casino built on the property. Schiff formed a corporation which owned and operated the Grand Opening Motor Inn, dba Nevada Palace Casino and Motor Inn (the “Nevada Palace”). Robert F. Mariscal (“Mariscal”) became Chairman of the Board, the principal stockholder, a principal of the corporation, and the gaming licensee and operator of the hotel and casino. Eugene Lucas (“Lucas”) became president, a principal stockholder, and general manager and was a co-defendant in this action, but settled with the United States prior to trial. Schiff was the landlord for the Nevada…