Print Friendly, PDF & Email

The Trust Fund Recovery Penalty (TFRP) serves as an alternative means of collecting unpaid trust fund taxes when taxes are not fully collectible from the company/business that failed to pay the withheld taxes. If the IRS determines you willfully failed to remit payroll taxes, they may assess a TFRP.  This means you can be personally liable for paying the TFRP if you are a person responsible for collecting and submitting payroll taxes who willfully fails to do so.

Understand your options and receive a tax consultation today. We’ll conduct a tax analysis based on your specific situation and present available solutions for consideration.

  • Analyze your financial situation and help you determine options available to minimize your TFRP liability.
  • Ensure your balance is minimized through appropriate tax resolution measures prior to IRS negotiation.
  • Submit your package to the IRS and negotiate your lump sum payment amount and/or payback period.
  • Handle all IRS communications on your behalf.
Q. Who can be held responsible for Trust Fund Recovery Penalties?

A. Courts have generally determined this question based upon the individual’s control over corporate payments. This might include business owners, CEOs, and directors, employees, third party payroll administrators, outside accountants, and bookkeepers. For corporations, shareholders can also be held responsible; and for non-profits, members of the board of trustees may be considered responsible.

Q. Is there a statue of limitations on TFRP assessments?

A. Generally, assuming Forms 941 or comparable returns were timely filed, the IRS has three years to assess the TFRP from the April 15 that succeeded the return’s due date. If the business’s return was filed after the due date, the statute of limitation begins to run from either the April 15 that succeeded the return’s due date or three years from when the return was actually filed, whichever is later. However, false or fraudulent returns and returns prepared by the IRS do not start the running of the statute.

Q. How much is the penalty?

A. It is equal to the amount of taxes that were unpaid, for each employee, for each pay period. Thus, this penalty can become very large, very quickly.

Q. What is the cost of your service to deal with TFRP issues?

A. Our IRS tax resolution fees are based on our flex-fee structure, and all costs are pre-approved by you when you decide to hire us. We offer payment plans, if needed, and set our fees so you do not have to worry about unexpected legal bills. There are no surprises, no add-ons. Because every situation is different, we recommend you Schedule a Tax Consultation so we can discuss your case in detail.