Tax Solutions
Payroll Tax Relief
What are Trust Fund taxes?
The money withheld from an employee’s wages (income tax, Social Security and Medicare taxes) by an employer is considered trust fund taxes because the employees trust that their employer pay the withholding to the Treasury. The employees’ trust fund taxes, along with the employers’ matching share of FICA (non-Trust portion of the employment taxes), are paid to the Treasury through the Federal Tax Deposits (FTD).
Trust Fund Recovery Penalty
Willful failure to timely collect and deposit the trust fund taxes to the IRS may result in assessment of the Trust Fund Recovery Penalty (TFRP) against the owners, officers, shareholders or other responsible individuals who run the business.
Note that the IRS does not need to separately assert the Trust Fund Recovery Penalty against a business running as a sole proprietorship and can pursue the IRS Form 941, 944 and 940 liability against the owner of the business personally.
Whether or not the business is closed, you need to make a plan to pay the trust fund taxes and resolve the debt with the IRS. We will present all options that are available to you and will work to get you the best possible outcome.
If you have received notices regarding the assessment of the Trust Fund Recovery Penalty or have any issues with the payroll taxes, you need to get help and immediately resolve the issues with the IRS.