Trust Fund Recovery Penalty: The Facts

You have probably heard of the Trust Fund Recovery Penalty. This is a penalty assessed for Trust funds that aren't paid. How are Trust funds defined? This is the money that is withheld from an employee's paycheck. This money includes the federal income tax, FICA, and Medicare and is considered held in trust until you do a federal tax deposit.

The person liable for trust funds could be an officer, director, or employee of a corporation with the ability to account for, collect, and deposit trust funds.

Anyone responsible for collection and settlement of trust funds and knowingly fails to do so is imposed with the penalty. An IRS officer might do interviews of those in the company to pinpoint who's responsible. He'll know who made financial decisions, had authority to sign company checks, had the ability to settle the company's bills, and did the tax reporting. It might even be several people. The penalty is not divided equally; each individual owes the whole amount until the penalty is settled in full.

If you turn out to be one of these people, you should understand your rights. It must be determined if you were assessed with the correct amount. This sum is equal to the unpaid balance of the trust fund debt. You may wish to check into qualifying for an Offer in Compromise or if there's a possibility of negotiating an installment agreement with the IRS.

Our company can help you walk through the numerous factors of the Trust Fund Recovery Penalty. We can provide IRS Help through the appeal process so you can assess all the possibilities.

Share on Facebook

Originally posted 2008-02-03 05:24:45. Republished by Blog Post Promoter