The Trust Fund Recovery Penalty (Payroll)

The IRS and State have determined that any person or persons that “willfully” chooses to not pay payroll tax liability is deemed a “responsible person”.  What this means is that a responsible person is personally liable for the Trust Fund portion of payroll taxes withheld from employees’ pay.

What Makes Up the Trust Fund Portion?

The employee’s tax withholding as well as their portion of Medicare and Social Security (FICA) tax withheld is referred to as the “Trust Fund” portion ofTrust Fund Recovery Penalty the payroll tax liability.  In addition to the company being held liable, the responsible person will also be held personally liable if the tax liability remains unpaid.  If you are deemed responsible, you may be forced to personally pay for any shortfall that exists.  A person may be deemed responsible regardless of the type of entity under which the business operates including LLC’s and sole proprietorships.

Who Will Be Responsible?

Keep in mind that a there may be more than one responsible person and they not need be a business owner.  A responsible person may be anyone including a CFO, payroll manager or bookkeeper.  They may also be considered to be responsible solely because they are listed on the company’s bank signature card.

We Are Here to Help

The Tax Resolution Institute not only helps businesses address a company’s Trust Fund Recovery issues by entering them into an agreement with the taxing agencies, but we also help individuals tied to the company that may in the future or already have been deemed a responsible person.

It is important that you act quickly if you have not yet been deemed a responsible person.  If we can get you “off the hook” personally, it will greatly work in your favor when looking at the overall picture as it relates to your tax matters.  If you have been deemed responsible prior to coming to us, there are ways we can keep the IRS from coming after you personally…

Read in detail about the Trust Fund Recovery Penalty

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