Question 1

What is Trust Fund Penalty?

Accepted Answer

A Trust Fund in terms of employment tax should not be mistaken with a trust fund in terms of wealth management. This is the payroll tax amount assessed to the officers of the business. Tax resolution can help reduce and or arrange the payment of these taxes.

Question 2

What is a Trust Fund Recovery Penalty (TRFP)?

Accepted Answer

A Trust Fund Recovery Penalty can be assessed if the unpaid trust fund taxes cannot be immediately collected from the business. This often happens if the business falls on hard times and taps into that fund for any reason. According International Revenue Code 6672(a) an individual can be held liable for penalty for willful failure to collect, account for, or pay to the IRS the taxes for the business.

Question 3

Who is Held Responsible for the TRFP?

Accepted Answer

According to the IRS, the TRFP can be assessed against any person who is: responsible for collecting or paying withheld employment taxes, willfully fails to collect or pay the taxes.

TFRP

Business Taxes are Dependent upon Business Structure – Part I