The temporary administrator of Riverside General Hospital, a now-shuttered facility in Houston, was found liable for $173,630 in hospital payroll taxes that were not turned over to the federal government during her tenure, a federal court ruled May 31.
The U.S. Court of Appeals for the 5th Circuit upheld a former Tax Court decision that found Pamela Cashaw liable for failing to remit the taxes, according to court documents obtained by Becker's.
Ms. Cashaw began at the hospital in 1978 as a pharmacist and took on increasing leadership responsibilities throughout her time there. In October 2012, the hospital's chief administrator was indicted in a scheme to defraud Medicare and was removed from the position. Ms. Cashaw took his place and was given nonexclusive signature authority, according to the court documents.
As temporary chief administrator, Ms. Cashaw oversaw payroll, reviewed expenses, attended board meetings and was one of two individuals whose signature was required on all checks. She resigned in April 2014, alleging a "toxic environment" at the hospital that included "undue stress, interference, [and] lack of integrity."
The hospital was financially troubled during Ms. Cashaw's tenure and failed to pay portions of its tax liabilities to the IRS in 2013 and 2014, the court documents said. The Tax Court found that Ms. Cashaw could face trust fund recovery penalties for withholding the money; however, she appealed, alleging she was not a responsible party and did not do this willfully.
Ms. Cashaw testified that she was in a "difficult position" as chief administrator and had to decide whether to pay the taxes or center patient care. The court disagreed, saying she had a duty to ensure the taxes were paid before authorizing payments to vendors or employees.
"While Cashaw might not have been 'the person most responsible for the payment of the taxes,' she was a responsible person, and 'the statute expressly applies to "any" responsible persons,'" the court documents said.