Lake City: Trust Fund Recovery Pen: Pyramiding or Misclassification?

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More on the Trust Fund Recovery Penalty from the Trust Fund Recovery Penalty specialist!

The IRS takes an aggressive approach towards taxpayers that fail to remit payroll tax deposits. New Life Tax Resolution can help rescue your company and avoid the Trust Fund Recovery Penalty.

The IRS calls it trust fund money. It belongs to the government. Their tool for collection is the Trust Fund Recovery Penalty. They use it frequently to teach employer's the importance of filing payroll returns and turning over payroll taxes. It is a major source of funding for our government therefore important to the IRS.

Pyramiding” is another term used by the IRS . The term “pyramiding” refers to a company which collects payroll taxes from its employees but doesn't forward these funds to the IRS and winds up building a “pyramid” of ill-gotten gains. The Trust Fund Recovery Penalty will be issued.

Often, the owners of the company disappear with the cash, or they will declare bankruptcy when the IRS tries to collect. Another approach is to start a new company under a different name.This will lead to the Trust Fund Recovery Penalty being imposed.

 I'm Patrick LeClaire owner of  New Life Tax Resolution. Our office offers tax resolution options to avoid the Trust Fund Recovery Penalty.

 Misclassifying Employees as Independent Contractors

Employment taxes need to be withheld and paid for the employees, not independent contractors (IC). One method of avoiding these taxes is to improperly classify a worker as an IC.  This will lead to Trust Fund Recovery Penalty.

Rule is if the employer has the right to control what work will be done and how it will be done, the worker is an employee. Employers who misclassify employees as ICs are liable for the employment taxes and the Trust Fund Recovery Penalty.


If you or someone you know has Trust Fund Recovery Penalty letter from the IRS , please feel free to contact me at either (407) 287-6638 or by email @ Time to avoid the Trust Fund Recovery Penalty.


Patrick LeClaire Enrolled Agent    Specialist in Trust Fund Recovery Penalty Resolution.

New Life Tax Resolution

Lake City Florida

ph 407-287-6638

fax 727-270-8947


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Patrick LeClaire Enrolled Agent

Your Tax Resolution firm in Lake City Florida
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