I focus my practice on tax resolution, representing taxpayers in Colorado, Florida, and across the United States.
The Trust Fund Recovery Penalty (TFRP) is a penalty assessed by the Internal Revenue Service (IRS) that can be imposed on responsible parties for unpaid federal payroll taxes. If a business is required to withhold payroll taxes from its employees' paychecks, but fails to do so or to make the required deposits, both the business and the responsible individuals can be held liable for the unpaid tax.
The TFRP is assessed under Section 6672 of the Internal Revenue Code, and applies to both owners and key employees of a business who have the authority to make financial decisions, such as deciding which bills to pay. These individuals are considered to be "responsible parties" for the collection and payment of federal payroll taxes, and can be held personally liable for the amount that should have been paid to the IRS. Many employees don't even realize they fall under "key".
The penalty can be equal to the full amount of the unpaid payroll taxes, plus interest and penalties. The IRS can also use its power to seize the assets of the business or responsible parties to satisfy the debt. The TFRP is a civil penalty, not a criminal charge, but the IRS can still pursue legal action to collect the debt.
It is important for business owners and key employees to be aware of their responsibility to ensure that payroll taxes are paid on time, as failure to do so can have serious financial consequences. The IRS doesn't mess around when it comes to payroll taxes. If you are concerned about the possibility of a TFRP assessment, it is important to seek the advice of a qualified tax professional who can help you understand your options and develop a plan of action to address the situation. In many cases, it may be possible to negotiate a payment plan or settlement agreement with the IRS to resolve the debt and avoid the TFRP.
If you or someone you know has back taxes to deal with, don't hesitate to contact us immediately at 303-499-2700 or by email at mmoran@apextaxdefense.com.
Michael Moran, CEO, EA
Apex Tax Defense LLC
825 S Broadway
Boulder, CO 80305
Phone: 303-499-2700
Fax: 888-478-7627
mmoran@apextaxdefense.com
www.apextaxdefense.com
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