I.R.C. § 3505(a) Direct Payment By Third Parties —
For purposes of sections 3102, 3202, 3402, and 3403, if a lender, surety, or
other person, who is not an employer under such sections with respect to an employee
or group of employees, pays wages directly to such an employee or group of employees,
employed by one or more employers, or to an agent on behalf of such employee or employees,
such lender, surety, or other person shall be liable in his own person and estate
to the United States in a sum equal to the taxes (together with interest)
required to be deducted and withheld from such wages by such employer.
I.R.C. § 3505(b) Personal Liability Where Funds Are Supplied —
If a lender, surety, or other person supplies funds to or for the account of an
employer for the specific purpose of paying wages of the employees of such employer,
with actual notice or knowledge (within the meaning of section 6323(i)(1)) that such employer does not intend to or will not be able to make timely payment
or deposit of the amounts of tax required by this subtitle to be deducted and withheld
by such employer from such wages, such lender, surety, or other person shall be liable
in his own person and estate to the United States in a sum equal to the taxes (together
with interest)
which are not paid over to the United States by such employer with respect to such
wages. However, the liability of such lender, surety, or other person shall be limited
to an amount equal to 25 percent of the amount so supplied to or for the account
of such employer
for such purpose.
I.R.C. § 3505(c) Effect Of Payment —
Any amounts paid to the United States pursuant to this section shall be credited
against the liability of the employer.
(Added Pub. L. 89-719, title I, 105(a), Nov. 2, 1966, 80 Stat. 1138.)
BACKGROUND NOTES
EFFECTIVE DATE
Section applicable only with respect to wages paid on or after Jan. 1, 1967, see section
114(c)(1) of Pub. L. 89-719, set out as an Effective Date of 1966 Amendment note under
section 6323 of this title.
