Trust Fund Recovery Penalty

If you own a business and you have failed to pay payroll taxes or file payroll tax returns, the IRS could seize assets of the business and even shut down your business. Regardless of whether of not the business is closed, still in operation or files for bankruptcy protection, the IRS will still have the legal capacity to collect the back taxes owed according to IRS Code Section 6672.

Shareholders, Officers, and certain employees can be held personally liable for a business’s failure to pay its payroll taxes. Internal Revenue Code Section 6672 holds individuals who were responsible for paying payroll taxes personally liable for “the tax evaded, or not collected, or not accounted for and paid over.” (click on, see Section 6672). This means that you or anyone in your business who the IRS determines to be willful and responsible for the business’s failure to pay certain taxes could be held personally liable.

Once the IRS has made a personal Trust Fund Recovery Penalty assessment against an individual, the IRS may begin to collect from that individual in addition to its collection efforts aimed at the business. Thus, your personal assets, wages, and bank accounts can be in jeopardy.

The most effective way to resolve a Trust Fund Recovery Penalty is to avoid an IRS assessment. If a tax problem is caught early, ProTecT Law Group’s Tax Attorneys can usually negotiate an agreement with the IRS wherein your business settles its own liability. However, the longer your tax problem goes unresolved, the greater the chances that the IRS will look to you personally and whoever else they determine to be responsible for your company’s failure to pay taxes.

If you have already been personally assessed, you need help immediately. With few exceptions, we may be able to convince the IRS not to seize your personal assets, wages, and bank accounts as long as an acceptable agreement on behalf of your business is negotiated quickly.

If the IRS has already assessed you personally and has commenced enforcement action against your personal assets, wages, and/or bank accounts, you need professional representation now. There are a number of resolution strategies available (i.e. OIC, Penalty Abatement, Installment Agreement or CNC) to counter this assessment.

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