If your company has been struggling with tax issues and the resulting penalties, the trust fund penalty (TFRP) can be a crushing blow with far-reaching consequences for your personal financial security and future.
But all is not lost…
Join us as we discuss common questions, such as “what is the trust fund recovery penalty?” and, “how do you avoid the trust fund recovery penalty?”
So, what is a trust fund recovery penalty?
Also sometimes referred to as the “responsible person penalty,” a trust fund recovery penalty is a personal liability that may occur if a company’s payroll taxes are not properly remitted to the Federal government.
Typical examples of employment taxes not remitted are Medicare and social security deductions from employees’ wages.
It forms part of the payroll tax audit, and is definitely not something you should ignore.
How much is the trust fund recovery penalty?
For uncollected tax, the trust fund recovery penalty calculation is the employee’s part of any withheld FICA taxes plus withheld income taxes, and will be the same amount as unpaid trust fund taxes. For collected taxes, trust fund recovery penalties are the unpaid amount of collected excise taxes.
