Trust Fund Recovery Penalty

The IRS will aggressively collect the unpaid withholding taxes from the “responsible” individuals; who are involved in operating the business or who are involved in making financial decision for the business. These taxes are known as “Trust Fund Taxes” or “941 Liabilities”.

For this purpose the IRS has been granted the power to pierce into the corporate veil by holding liable for the unpaid withholding taxes the individuals who are responsible for the business failure to withhold and pay-over the Trust Fund Taxes. This assessment is known as “Trust Fund Recovery Penalty” (TFRP).

The IRS’s power of Trust Fund Penalty is broad. In addition to the owners and principal officers, IRS Revenue Officers will often assert the Trust Fund Recovery Penalty against all individuals involved in the accounting aspects of the business or who have check signing authority. Also, the Trust Fund Recovery Penalty is a large amount that cannot be discharged in a bankruptcy.

If you have been notified by the IRS for an interview in connection with the “Trust Fund Penalty”, you must act now and contact an experienced legal counsel. Mr. Moore has over 22 years experience dealing with the “Trust Fund Recovery Penalty” issues. Contact us now to schedule and appointment. 714-541-2500

On many occasions, Moore & Affiliates, PLC has been retained to solve a Trust Fund Recovery Penalty problem even if it has already been assessed. Generally clients contact us after the IRS has commenced enforced collection activity for an “old” Trust Fund Penalty liability, or a taxpayer is prevented from selling or refinancing his or her house due to a federal tax lien filed in connection with the original Trust Fund Recovery Penalty assessment.

There are varied solutions to this problem but they are very complex and require skilled representation. Sometime, an offer-in compromise or request for lien discharge or subordination will be the answer.

In other situation the solution requires payment of the withholding tax for one employee, followed by a claim for refund. In other times the problem can be resolved through IRS administrative appeal procedures; or simply the solution lies in federal court litigation.

In all cases, an attorney experienced in representing taxpayers in Trust Fund Recovery Penalty cases should be consulted. Call Mr. Moore who has 22 years experience in dealing with the trust fund taxes issues for a free assessment of your case. 714-541-2500

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