Trust Fund Recovery Penalty
Internal Revenue Code Section 6672 (a). To encourage prompt payment of withheld income and employment taxes, including social security and railroad retirement taxes or collected excise taxes, Congress passed a law that provides for the trust fund recovery penalty. This is used as a tool for collection of unpaid employment taxes. If you are a "responsible person" the IRS can apply this penalty against you immediately after you do not pay trust fund taxes in response to a notice and demand for payment. Also, the IRS can apply this penalty regardless of whether you are out of business or without assets. Who Is Subject to the Penalty: The IRS may impose against any person who is responsible for collecting or paying withheld income and employment taxes or for paying collected excise taxes AND who willfully fails to collect or pay them.
See Also:
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| Client Owed | $ 165,000 | $ 120,000 | $ 140,000 |
| Settled | $ 15,000 | $ 5,000 | $ 36,000 |
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| Client Owed | $ 80,000 | $ 70,000 | $ 70,000 |
| Settled | $ 19,500 | $ 4,000 | $ 7,500 |
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| Client Owed | $ 60,000 | $ 65,000 | $ 50,000 |
| Settled | $ 2,500 | $ 3,500 | $ 6,000 |
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| Client Owed | $ 45,000 | $ 26,000 | $ 26,000 |
| Settled | $ 1,200 | $ 1,855 | $ 4,200 |
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| Client Owed | $ 13,000 | $ 50,000 |
| Settled | $ 1,200 | $ 6,000 |
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© Copyright 2002-2006, Law Offices of Alex Gluzman
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