What is Trust Fund Penalty?

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.

What is a Trust Fund Recovery Penalty (TRFP)?

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.

Who is Held Responsible for the TRFP?

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.

Tax Problem Story - Bullseye Tax Relief

The Tax Problem Story

For Individual

Income tax

Income tax problems happen when you default on your tax payments. When you file your taxes every year, and if your tax return shows that you owe taxes and you don’t pay it in full or make only partial payment, then you will owe back taxes to the IRS.
If you don’t make these payments within on time and or if you do not make arrangements swiftly within a reasonable time, your taxes due now are going to be enter into the collection process. Although it may weeks, months and even in some cases years before you are contacted by the tax authorities to resolve these late taxes due issues, it’s just a matter of time before they can turn into a real issue.
Meanwhile, interest on unpaid amount and penalties of different kinds accrue on the account from the time taxes due are delinquent, regardless of when you were contacted.

Income tax

If you filled your return	If you have not filed your return
Income tax problems happen when you default on your tax payments. When you file your taxes every year, and if your tax return shows that you owe taxes and you don’t pay it in full or make only partial payment, then you will owe back taxes to the IRS.	Tax authorities will contact you to remind you of not filing your taxes, but it’s a matter of time before they assess taxes.Generally speaking, assessments are not very favorable and will end up increasing your tax liability.
If you don’t make these payments within on time and or if you do not make arrangements swiftly within a reasonable time, your taxes due now are going to be enter into the collection process. Although it may weeks, months and even in some cases years before you are contacted by the tax authorities to resolve these late taxes due issues, it’s just a matter of time before they can turn into a real issue.
Meanwhile, interest on unpaid amount and penalties of different kinds accrue on the account from the time taxes due are delinquent, regardless of when you were contacted.

Tax returns filed Taxes due

Tax Returns not filed Taxes assessed

Collections Activities Notices issued
Bank Levies
Wage garnishments
Liens filed
and more actions may follow

Tax returns filed Taxes due

Tax Returns not filed Taxes assessed

Collections Activities Notices issued
Bank Levies
Wage garnishments
Liens filed
and more actions may follow

For Businesses

Income tax

Income tax problems happen when you default on your tax payments. When you file your taxes every year, and if your tax return shows that you owe taxes and you don’t pay it in full or make only partial payment, then you will owe back taxes to the IRS.
If you don’t make these payments within on time and or if you do not make arrangements swiftly within a reasonable time, your taxes due now are going to be enter into the collection process. Although it may weeks, months and even in some cases years before you are contacted by the tax authorities to resolve these late taxes due issues, it’s just a matter of time before they can turn into a real issue.
Meanwhile, interest on unpaid amount and penalties of different kinds accrue on the account from the time taxes due are delinquent, regardless of when you were contacted.

Income tax

If you filled your return	If you have not filed your return
Income tax problems happen when you default on your tax payments. When you file your taxes every year, and if your tax return shows that you owe taxes and you don’t pay it in full or make only partial payment, then you will owe back taxes to the IRS.	Tax authorities will contact you to remind you of not filing your taxes, but it’s a matter of time before they assess taxes. Generally speaking, assessments are not very favorable and will end up increasing your tax liability.
If you don’t make these payments within on time and or if you do not make arrangements swiftly within a reasonable time, your taxes due now are going to be enter into the collection process. Although it may weeks, months and even in some cases years before you are contacted by the tax authorities to resolve these late taxes due issues, it’s just a matter of time before they can turn into a real issue.
Meanwhile, interest on unpaid amount and penalties of different kinds accrue on the account from the time taxes due are delinquent, regardless of when you were contacted.

Tax returns filed Taxes due

Tax Returns not filed Taxes assessed

Collections Activities Notices issued
Bank Levies
Wage garnishments
Liens filed
and more actions may follow

Tax returns filed Taxes due

Tax Returns not filed Taxes assessed

Collections Activities Notices issued
Bank Levies
Wage garnishments
Liens filed
and more actions may follow

Unemployment/ Payroll

1 Employers pay employees thier wages

2 They withhold a part of the wages from thier employees that belong to the IRS and the state (Employee portion)

3 They pay taxes to the IRS and the state based on wages of thier employyes (employer portion)

4 All amounts (employee and employer portions) are collected by the employer and deposited with the IRS and the state periodically

1 Employers pay employees thier wages

2 They withhold a part of the wages from thier employees that belong to the IRS and the state (Employee portion)

3 They pay taxes to the IRS and the state based on wages of thier employyes (employer portion)

4 All amounts (employee and employer portions) are collected by the employer and deposited with the IRS and the state periodically

How does the unemployment tax problem start?

Faliure to deposit

Employee portion collected
Employee portion not deposited

Failuare to correct

Employers notified to pay
Employers are unable to or unwilling to pay

Collection begins

Trust fund penalty assessed and multiple collections actions are taken

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