Nobody ever said the tax system is fair, and this case proves it.
In Paris v. IRS, the taxpayer hired his brother as his accountant. Bad brother proceeded to embezzle the money that amongst other things was used to pay the payroll taxes of the business.
Good brother ultimately finds out, but seeing as this is a bankruptcy case, it doesn't look like there is a good ending.
Not only that, but now the IRS is going after good brother for the payroll taxes, and trust fund recovery penalties (100% penalties, ouch!).
BK judge determined that good brother knew payroll taxes were due to the IRS, and yet good brother paid other creditors before the IRS. Because good brother knew taxes were due, and didn't pay them, BK didn't wipe out the debt to good brother.
Morale to this story? Never do payroll for yourself. Hire someone, trustworthy, to take care of it for you. The downside risk is just too great.
