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 Resolution Services: Installment Agreements vs the IRS PPIA

As you may have learned in our last few blog posts discussing Installment Agreements, there are a variety of different tax resolution services available to individuals, as well as businesses, and within these different tax resolution options, there can also be different subcategories. In this blog post, we’ll compare the different types of Installment Agreements so you can get a better idea of which one might be best for you.

If none of them seem like they might be the right fit for you or your business, give one of our tax resolution specialists a call today to discuss your options and, if you’re a new customer, set up a free consultation and transcript analysis. If you’d like to do more research first, feel free to check out our Tax Problem Resolution Page for more information about tax resolution services like Offer in Compromise, Currently Non-Collectible, and Penalty Abatement.

The Four Installment Agreements

As we mentioned in one of our recent posts, Tax Resolution Services: Types of Installment Agreements, there are four main types of installment agreements:

Guaranteed IRS Installment Agreement
Streamlined Installment Agreement
In-Business Trust Fund Installment Agreement
IRS Partial Payment Installment Agreement

In our last post, Tax Resolution Services: Types of Installment Agreements, Continued, we went into further detail about the first three. Here, we’ll compare them all to each other!

As we mentioned at the end of the last post, all three of the first three installment agreements usually do not require that you submit financial verification and statements and they all require that you have filed all required returns. After that, they vary in different ways, from the amount owed, to the timeframe, to whether the taxpayer is an individual or a business.

But a large difference that the first three installment agreements all share when compared to the IRS Partial Payment Installment Agreement is that the first three all require that the total amount of tax debt owed to the IRS is paid in full, meanwhile, as we mention in our blog post, Partial Payment Installment Agreement – What is it?, the IRS Partial Payment Installment Agreement, also known as the IRS PPIA, does not require that the tax debt is paid back in full.

That is a huge difference! However, there are some drawbacks to the IRS PPIA too. As we mentioned in our post, Partial Payment Installment Agreement vs. Offer in Compromise – What are the differences?, the IRS PPIA allows the IRS to periodically reassess your financial situation to see if you are capable of paying more. The requirements for the IRS PPIA are also different from the other Installment Agreements. According to our Partial Payment Installment Agreement page, to be eligible for an IRS PPIA, the IRS requires that you:

Are able to pay off some of your debt but not all of it by the statute of limitation
Owe over $10,000 in tax debt
Have not filed for bankruptcy
Have no assets or your assets cannot cover the debt if liquidated

So as you can see, there is no one-size fits all solution when it comes to finding tax debt relief. That’s why, if you’re searching for tax resolution assistance right now, you should reach out to one of the tax resolution specialists at Bullseye Tax Relief today. We offer a free consultation and transcript analysis for new clients, so you can get answers and hope, rather than more fees or debt. Give us a call at (844) 582-3323.