A company that has employees is responsible for collecting the taxes from its employees (withholdings) and paying those taxes over to the United States. Under Section 6672 of the federal tax code, when the company has failed to pay over those taxes, a penalty – known as the “Trust Fund Recovery Penalty” – may be assessed against the individuals in the company responsible for that failure. The penalty against a “responsible person” is equal to 100 percent of the taxes that were stated as withheld from the wages of the employees but which were not paid over to the IRS.
The determination of who is a “responsible person” depends on several facts and consideration of a number of factors utilized in IRS investigations. The Wilson Tax Law Group’s former government experience gives us unique insight into the IRS’s determination and we have substantial experience in challenging the IRS’s determinations in trust fund recovery penalty cases. If you need assistance in a case that involves, or potentially involves, the trust fund recovery penalty, do not hesitate to contact an Orange County tax attorney at (949) 397-2292.