If you owe back payroll tax, the IRS can assess the trust fund penalty against any person or persons responsible for paying the 941 back payroll taxes. Get Affordable Tax Defense!

Are you being considered for a trust fund penalty , has IRS sent form 1153 or form 2751, would like to seek various relief ? Contact us today for a free initial tax consultation.

There are variety of options you have and after a review of your case we can let you know exactly how to remedy the problem.

We have over 65 years of working directly for the Internal Revenue Service and the local, district, and regional tax offices of the IRS.

We have worked not only his former IRS agents and managers but teaching instructors and on-the-job instructors new IRS agents.

Why are these called Trust Fund

These taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount.

The TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business. The business does not have to have stopped operating in order for the TFRP to be assessed.

Who Can Be Responsible for the TFRP

The TFRP may be assessed against any person who:

• Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
• Willfully fails to collect or pay them.

A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.

This person may be:

• An officer or an employee of a corporation,
• A member or employee of a partnership,
• A corporate director or shareholder,
• A member of a board of trustees of a nonprofit organization,
• Another person with authority and control over funds to direct their disbursement,
• Another corporation or third-party payer,
• Payroll Service Providers (PSP) or responsible parties within a PSP
• Professional Employer Organizations (PEO) or responsible parties within a PEO, or
• Responsible parties within the common law employer (client of PSP/PEO).
For wilfulness to exist, the responsible person:
• Must have been, or should have been, aware of the outstanding taxes and
• Either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).
Using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of wilfulness.

You may be asked to complete an interview in order to determine the full scope of your duties and responsibilities.

Responsibility is based on whether an individual exercised independent judgment with respect to the financial affairs of the business. An employee is not a responsible person if the employee’s function was solely to pay the bills as directed by a superior, rather than to determine which creditors would or would not be paid. Notice 784.

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Figuring the TFRP Amount

The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on:

• The unpaid income taxes withheld, plus
• The employee’s portion of the withheld FICA taxes.

For collected taxes, the penalty is based on the unpaid amount of collected excise taxes.

Assessing the TFRP

If we determine that you are a responsible person, we will provide you a letter stating that we plan to assess the TFRP against you.

You have 60 days (75 days if this letter is addressed to you outside the United States) from the date of this letter to appeal our proposal. The letter will explain your appeal rights. Refer to Publication 5, Your Appeal Rights and How to Prepare a Protest if You Don’t Agree (PDF), for a clear outline of the appeals process.

If you are being considered for the trust fund penalty call us today and we will walk you through the process. We will let you know about the 4180 interview, explain the 2751 and 1153DO letter and walk you through the appellate process.

Call us today for free initial tax consultation and hear the truth about the trust fund recovery taxes.

Are You Bring Considered For Trust Fund Recover Penalty + IRS Tax Defense Representation + Former IRS