Trust Fund Recovery Penalty
The Trust Fund Recovery Penalty (TFRP) is one of the most severe penalties the IRS can impose. It holds individuals personally responsible for unpaid payroll taxes, including employee income tax and FICA withholdings. If you’re facing a TFRP assessment, the consequences can be financially devastating. My TFRP Representation Services provide expert guidance and advocacy to help you navigate this complex process and protect your financial future.
What is the Trust Fund Recovery Penalty (TFRP)?
The TFRP applies when a business fails to deposit payroll taxes withheld from employee wages. These taxes are considered “trust fund” taxes because employers hold them in trust for the government. When these funds are not remitted to the IRS, the agency can assess the penalty against individuals responsible for collecting, accounting for, or paying these taxes.
Who Can Be Held Liable?
The IRS may hold any “responsible person” liable, which could include:
- Business owners or partners.
- Corporate officers or directors.
- Payroll managers or bookkeepers.
- Anyone with authority over financial decisions.
The Consequences of TFRP
- Personal Liability: The penalty is assessed personally, meaning your personal assets are at risk.
- Severe Penalties: The TFRP is equal to 100% of the unpaid trust fund taxes, plus interest.
- Potential Legal Action: In extreme cases, criminal charges may be pursued.
How I Help with TFRP Issues
Case Assessment and Strategy Development
I begin by reviewing the IRS notice, tax records, and your role in the business to determine if the TFRP assessment is accurate and justified.
Proving Non-Responsibility
If you’re wrongly identified as a responsible person, I’ll gather evidence and prepare a defense to demonstrate that:
- You didn’t have authority over payroll decisions.
- You lacked knowledge of the unpaid taxes.
- You took reasonable steps to ensure compliance.
Negotiating Resolutions
For valid TFRP assessments, I can negotiate with the IRS to minimize the financial impact:
- Installment Agreements: Set up manageable payment plans to satisfy the penalty over time.
- Offers in Compromise (OIC): Seek a reduced settlement if you qualify.
- Penalty Abatement: Request waivers of penalties based on reasonable cause.
Representation in Appeals
If the IRS denies your defense or resolution request, I will represent you in the appeals process to challenge the decision and seek a fair outcome.
Post-Resolution Support
Once the TFRP issue is resolved, I provide guidance to ensure compliance moving forward and avoid similar penalties in the future.
Why Choose My TFRP Representation Services?
Facing a Trust Fund Recovery Penalty requires skilled representation. As an Enrolled Agent, I have the expertise and experience to advocate on your behalf, protect your personal assets, and achieve the best possible resolution for your case.
Frequently Asked Questions
Q: How does the IRS determine if I’m a responsible person?
A: The IRS examines your role in the business, including authority over financial decisions and knowledge of payroll tax obligations.
Q: Can I avoid the TFRP if the business closes?
A: Closing the business does not eliminate personal liability for unpaid trust fund taxes.
Q: What if I can’t afford to pay the penalty?
A: Options such as installment agreements or offers in compromise may be available to reduce or delay payments.
Protect Yourself from the Trust Fund Recovery Penalty
If you’re facing a TFRP assessment, it’s essential to act quickly to limit the financial and legal consequences. My professional representation ensures your rights are protected, and your case is handled with care and precision.
Contact me today for a consultation to discuss your options and develop a strategy for resolution.
