In a unanimous decision handed down on May 20, 2016, the West Virginia Supreme Court of Appeals ruled that former Cowen Mayor Junior Cobb is entitled to be reimbursed by the Town of Cowen for taxes paid by Cobb personally for employment taxes owed by the Town on its employees.
In January, 2014, Cobb sued the Town for reimbursement of payroll and withholding taxes he personally paid to the IRS on behalf of the Town. It was undisputed that both Cobb and the Town failed to see that those taxes were paid. A Magistrate dismissed the case and Cobb appealed to the Circuit Court.
In a trial before Circuit Court Judge Jack Alsop in March, 2015, it was determined that both Cobb and the Town Council knew that the required taxes were not being paid. The IRS held Cobb personally responsible and he then personally paid over $5,000.00 of his own money to the IRS on the Town's behalf.
Judge Alsop ruled that Cobb was entitled to be reimbursed by the Town for $1,070.43 of the $5,000.00 paid by Cobb. Judge Alsop found that the IRS only applied $1,070.43 to the delinquent taxes, and that the balance was penalties and interest. The Judge further ruled that because both the Town and Cobb knew the taxes were not being paid, Cobb was not entitled to be reimbursed for the penalties and interests as he was equally at fault for the non-payment of the taxes. Judge Alsop ultimately ruled that the Town would be unjustly enriched in the amount of $1,070.43 and that Cobb should be reimbursed that sum.
The Town appealed to the West Virginia Supreme Court. The Supreme Court could find no errors in Judge Alsop's reasoning or in his calculations of the reimbursement amount. In its failed appeal, the Town was represented by Dan Hardway. Dara Acord and Howard Blyler represented Cobb.
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