Trust Fund Recovery Penalty – IRC §6672

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Employers are required to withhold from the pay of employees properly calculated Federal Insurance Contribution Act (FICA) (i.e., Social Security) taxes, Medicare (i.e., Hospital Insurance) taxes, and income taxes. Employers who fail to properly withhold and remit these taxes to the government may be held personally liable for a portion of the unpaid employment taxes, referred to as “trust fund taxes.” The trust fund portion consists of the federal income tax withheld from the employees’ wages and the 50% of FICA withheld from the employees’ wages. These taxes are referred to as trust fund taxes because they are held in trust for the government.

To discourage employers from using this money to pay other business expenses, the government is permitted to collect the trust fund taxes from certain persons via the “Trust Fund Recovery Penalty.” While this is referred to as a penalty, it is equal to the amount of the unpaid trust fund taxes. This course will examine who may be held liable for trust fund taxes and how the IRS assesses the Trust Fund Recovery Penalty.

Educational Objectives:
• Determine under which circumstances an individual may be held liable for paying Trust Fund Taxes pursuant to Code §6672; 
• Effectively apply the defenses available to an individual who is potentially liable for the Trust Fund Recovery Penalty; 
• Understand how the IRS investigates Trust Fund Recovery Penalty cases; and 
• Determine the processes available for appealing a Trust Fund Recovery Penalty assessment.