| First CircuitMaine, Massachusetts, New Hampshire, Rhode Island | Limited Significant, not exclusive, control suffices, but Vinick requires actual, exercised authority; unexercised power alone is insufficient. | Yes Reckless disregard of known or obvious risks that trust fund taxes go unpaid establishes willfulness. | No Harrington held a reasonable-cause or justifiable-excuse element has no part in § 6672 willfulness. | Yes Narrowly: funds legally obligated to a creditor with interests superior to the IRS are encumbered (Schiffmann). |
| Second CircuitConnecticut, New York, Vermont | Limited Significant, not final, control is enough, but the person must actually have exercised it; titular authority alone isn’t. | Yes Willfulness includes reckless disregard of obvious and known risks, or failing to investigate after notice of nonpayment. | Yes Narrowly. A reasonable belief that the taxes were being paid negates willfulness (the Kalb ’reasonable cause’ exception). | Unsettled No Second Circuit precedent recognizes, rejects or discusses an encumbered-funds defense by name. |
| Third CircuitDelaware, New Jersey, Pennsylvania | Yes Significant (not exclusive or final-word) control based on status, duty, or authority suffices; knowledge is not required. | Yes Paying other creditors with reckless disregard of whether trust fund taxes were paid is willful. | Unsettled No precedential Third Circuit opinion recognizes or rejects a reasonable-cause defense by name. | Limited Not squarely decided. Vespe assumes third-party control of funds could matter but puts the burden on the taxpayer. |
| Fourth CircuitMaryland, North Carolina, South Carolina, Virginia, West Virginia | Yes Significant but not exclusive authority suffices, and the person need not have actually used it. | Yes Willfulness means knowledge of nonpayment or reckless disregard of whether payments were made; negligence is not enough. | Limited Left open. Erwin assumed without deciding that the defense exists; at most it covers circumstances beyond the taxpayer’s control. | Limited Mentioned, not decided: duty reaches only unencumbered funds; Erwin noted superior security interests; no case applied the defense. |
| Fifth CircuitLouisiana, Mississippi, Texas | Yes Significant, non-exclusive authority suffices; it need not have been exercised. | Yes Reckless disregard of the risk that taxes will not be remitted satisfies willfulness. | Yes Conceptually, but exceedingly limited; unavailable to a responsible person who knowingly paid other creditors. | Yes Narrowly: only funds restricted by a creditor with a superior interest that precludes paying the taxes; taxpayer bears burden. |
| Sixth CircuitKentucky, Michigan, Ohio, Tennessee | Yes Significant, not absolute or final-word, control suffices; status, duty, and authority count even if powers were not always exercised. | Yes Reckless disregard of obvious or known risks that trust fund taxes are unpaid, plus failure to investigate, is willful. | Yes Narrowly. Byrne adopted the Second Circuit’s reasonable-cause exception: a reasonable belief taxes were being paid negates willfulness. | Yes Huizinga recognized encumbered funds (Michigan Builders Trust Fund Act trust funds); Byrne restated the narrow rule. |
| Seventh CircuitIllinois, Indiana, Wisconsin | Yes Significant, not exclusive or final-word, control suffices; authority to prevent the default, not its exercise, is the test. | Yes Reckless disregard of a known risk that trust fund taxes are going unpaid satisfies willfulness. | No Seventh Circuit excludes reasonable cause and justifiable excuse from willfulness; good faith does not negate willfulness. | Yes Narrowly. Kim adopts Honey: funds encumbered only by a legal obligation superior to the IRS’s interest; taxpayer bears burden. |
| Eighth CircuitArkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, South Dakota | Yes Significant, not exclusive, authority suffices; choosing not to exercise it, or delegating it, does not avoid liability. | Yes Reckless disregard of a known or obvious risk that trust funds may not be remitted is willful. | No Keller holds reasonable-cause excuses, such as reliance on an attorney or fear of lawsuits, do not negate willfulness. | Yes Honey: funds are encumbered only if legally owed to a creditor with an interest superior to the IRS’s. |
| Ninth CircuitAlaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington | Yes Authority to exercise significant control over financial affairs suffices, whether or not that control is actually exercised. | Yes Reckless disregard of whether trust fund taxes are being paid over may establish willfulness. | Limited Generally no (Davis, Phillips); Gray Line (1956) excused good-faith reliance on counsel and IRS advice that no tax was due. | Yes Narrowly. Funds are encumbered only when there is a superior legal obligation to use them otherwise (Nakano, adopting Honey). |
| Tenth CircuitColorado, Kansas, New Mexico, Oklahoma, Utah, Wyoming | Yes Significant, not exclusive, authority suffices, and its existence controls whether or not actually exercised (Denbo; Muck). | Yes Reckless disregard of a known or obvious risk that trust funds may not be remitted satisfies willfulness. | Yes Narrowly: reasonable efforts to protect trust funds frustrated by circumstances outside the taxpayer’s control (Finley, en banc). | Limited Not squarely decided. Tenth Circuit frames the duty as paying from ’unencumbered’ funds but has not expressly adopted the defense. |
| Eleventh CircuitAlabama, Florida, Georgia | Yes Significant control over disbursements suffices; no final word needed; status, duty and authority, not exercise, controls. | Yes Actual knowledge or reckless disregard of a known or obvious risk of nonpayment satisfies willfulness (Malloy). | Limited Left open. Thosteson declined to decide; any defense is ’exceedingly limited’ and unavailable to someone who knowingly preferred other creditors. | Limited Implicitly allowed but never applied. Only ’unencumbered funds’ must be used; no published case upholds an encumbered-funds defense. |
| D.C. CircuitDistrict of Columbia | Unsettled No D.C. Circuit precedent defines the degree of control needed for responsible-person status. | Unsettled The D.C. Circuit has not addressed whether reckless disregard satisfies § 6672 willfulness. | Unsettled No D.C. Circuit authority on a reasonable-cause defense to § 6672 willfulness. | Unsettled No D.C. Circuit authority on the encumbered-funds defense; Slodov’s secured-creditor discussion is the only binding guidance. |