Robert Alan Jones, Plaintiff-Counter-Claim-Defendant-Appellant v. United States of America, Defendant-Counter-Claimant-Plaintiff-Appellee

We reverse the summary judgment the Internal Revenue Service (“IRS”) won below, because there are genuine issues of fact as to whether Mr. Jones was a “responsible person” for certain unpaid trust fund taxes, and whether assessment was timely.

I. Facts

Mr. Jones and Mr. Russell each owned half the stock in Silver State Airlines, Inc. One served as chairman of the board, the other as president. The airline flew Asian tourists from Las Vegas to the Grand Canyon. Both men were on the bank signature cards, and they shared financial management responsibility.

In late 1981, the two men arranged for Mr. Russell to take over full control of the airline, because Mr. Russell had offered to buy out Mr. Jones’s interest. Mr. Jones left, expecting to be done working at the airline. But Mr. Russell lost $200,000, and was unable to obtain an investment sufficient to consummate the transaction, so Mr. Jones came back in March. The corporation filed a Chapter 11 bankruptcy petition and Mr. Jones operated it as a debtor in possession from March 1982 until July 2, 1982.

On July 2, 1982, the bankruptcy court appointed Linda Riegle as trustee for the corporation, “to take charge of the affairs of…