Trust Fund Recovery Penalty


Trust Fund Recovery Penalty

The Trust Fund Recovery Penalty is a way for the IRS to pierce the corporate veil and hold an officer, owner or check signer personally responsible for a business’ 941 Withholding or 720 Excise Tax Debt.

If you owe taxes on your Form 941 Employer’s Quarterly Withholding Tax Return or Form 720 Excise Tax Return, the IRS can pierce the corporate veil and hold you personally responsible for the Trust Fund portion of the 941 tax debt.  Any owner, officer or check signer will be looked at as someone who may have been willful and responsible for the accrual of the tax debt and therefore potentially personally responsible for it.

The Trust Fund is the portion of the 941 tax debt that someone could be personally responsible for.  The Trust Fund is comprised of the total of the employees’ withholding and the employees’ contributions to Social Security and Medicare. It does not include the Employer’s contribution to Social Security and Medicare and it does not include the penalties and interest that have accrued under the business.

There are several options when it comes to dealing with the Trust Fund Recovery Penalty. The tax professionals at Phoenix Financial Group know all of your options and how best to deal with the Trust Fund. They can walk you through the 4180 Trust Fund Interview and exercise your rights when you receive Letter 1153. If you are not sure whether to sign Form 2751, we can tell you if it is in your best interest.  Are you unsure why the IRS is asking for canceled checks and a copy of your bank signature card? Let one of our enrolled agents or enrolled agents explain what is going on and what you can do about it.

When the IRS assesses someone personally, it shows up under the Social Security Number as a Civil Penalty. Once you are assessed personally, you have a brand new set of appeals rights. Let one of our tax practitioners help you exercise them.

For more information call (888) 572-2179 or send an email to info@pfgtax.com.