IRS Trust Fund Recovery Penalty or 100% Penalty

Posted on October 23, 2013

Trust Fund Recovery Penality or 100% Penalty

What happens when the IRS comes after you related to your business taxes?

When a corporation has unpaid employment tax liability to the IRS and if that corporation can’t pay the taxes fast enough then the IRS might assert the Trust Fund Recovery Penalty against the owners, the officers, the shareholders, really the people that run the business.

By doing this, they expand the number of people that they can collect from. Until they do this, they can only collect from the business. But when they expand it under the Trust Fund Recovery Penalty, they can get the President, Vice-president, bookkeeper, the Board of Directors, the people that run the business.

When the IRS proposes to assess the Trust Fund Recovery Penalty against you, they send a letter and the letter gives you 60 days to file a protest. Again, deadlines are very important. You can’t miss any deadlines because if you don’t file a timely protest, the IRS is going to say we were right and they are going to send the bill, even if you weren’t meaningfully involved in that business.

How do you defend against Trust Fund Recovery Penalty ?

1. Responsibility or Willfullness

Responsibility means that you actually made the decisions that lead to this unpaid tax liability. You preferred to pay a creditor to keep the doors open rather than the IRS. Most businesses have someone out in the field making the sales and another in the office doing the books, deciding who to pay. Whether you are the person out making the calls or the person in the office deciding who to pay, the IRS will go after both of you. The IRS wants to collect and we can defend you.

2. Numerical Accuracy – We can help make an argument for you telling the IRS the number you are seeking to collect is wrong.

Call us at 877-4-IRSLAW and you’ll talk to a real lawyer that will answer your questions.

Or visit our website


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