Trust Fund Recovery Penalty

DEFENSE AGAINST TRUST FUND RECOVERY PENALTY FROM A FORMER IRS AGENT

Many business owners face an IRS Trust Fund Penalty assessment because the IRS alleges that they failed to properly remit payroll taxes to the IRS. Some business owners get themselves into this condition due to poor business practices, such as commingling operating and payroll funds. Other business owners resolve short-term cash flow issues by “borrowing” payroll tax withholdings. Regardless of how you come to owe payroll tax penalties, the IRS is seeking to collect the money from YOU and/or your business.

A Trust Fund Recovery Penalty can be assessed against a business owner or any person who is responsible for paying payroll taxes and willfully fails to do so.

RESPONSIBLE PERSON

The Internal Revenue Code provides that a responsible person “includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty” to pay over taxes withheld. This means the business owner, chief financial officer, accountant, or any other person, employee, or independent contractor. The IRS will generally look to a person's control over the entity's payment assets. If the IRS alleges that you are a “responsible person,” you should contact the Law Offices of Charles R. Frazier to defend you immediately.

WILLFULNESS

May business owners will plead that they were paying other business obligations to keep the business open long enough to get the money to pay the payroll taxes. You may have had good intentions when but the IRS takes the position that willful means that the responsible person chose to pay other creditors instead of the IRS, even though the individual knew, or recklessly disregarded, that the business was not paying the taxes. The IRS also takes that position that a “responsible person” willfully fails to remit payroll taxes because that “responsible person” also has control of the entity's payment resources. The implication is that you know about the tax obligations because you're responsible or you're in control of paying the entity's debts and liabilities, including the payroll taxes withheld.

DEDICATED DEFENSE TO HELPING YOU

The Law Offices of Charles R. Frazier can help you understand the Trust Fund Recovery Penalty assessment process; represent you during the Trust Fund Recovery Penalty interview, and provide advice and guidance to efficiently and effectively comply with the revenue officer's document collection request.