Bryan C. Templeton



The Taxpayer went to work at Sandia Food Group Inc., founded by Mark Day, in March 2000 as chief operating officer.  The corporation’s primary business was to develop and manage a series of restaurant franchises.  The Taxpayer did the accounting and paid the bills for the corporation.  The corporation later restructured and became a limited partnership called SFG, LP.  The Taxpayer was the chief accounting officer of the partnership.   The partnership received all revenues and paid all obligations for all restaurants and corporate entities that it managed and maintained all bank accounts for all of these restaurants and entities.  The Taxpayer signed all paychecks for employees working in the restaurants and signed tax payment checks and CRS filings for entities managed by the partnership.  The Taxpayer also personally provided money for franchise development rights, which increased his interest in the partnership.  The Taxpayer was listed as a limited partner in at least eight corporate entities under the Sandia Food Group, Inc. umbrella.  Mr. Day died in July, 2006.  The limited partnership and corporation filed for bankruptcy shortly after his death.  On the bankruptcy petition the Taxpayer listed himself as “President” of the company.  The companies were unable to reorganize in bankruptcy and discontinued operations of their restaurants.  In 2007, the Department assessed the Taxpayer for unpaid withholding tax, penalty and interest for two of the company’s under the partnership’s control.  The Taxpayer filed timely protests to both of these assessments.  The Taxpayer argued that he was not an officer, agent or employee of either of these companies and was not in control of the payment of wages for either.  He stated that Mr. Day was in control of everything associated with the companies.  The evidence established that the Taxpayer was an officer, agent, employer or employee as he applied for and obtained the CRS number for the companies, signed their tax payments and CRS filings, and signed employee paychecks.  Because the Taxpayer was found to have had control over the payment of wages for employees and he falls within the definition of an employer, he is liable for unpaid withholding tax, penalty and interest. The Taxpayers’ protest was denied.