Trust Fund Penalty Defense

If Your Business Has To Go Under, Don’t Go Under With It!

Business owners who struggle with uneven cash flow have to make tough decisions about which creditors to pay.  Business owners face the choice of paying for new inventory to restock shelves and pay employees or deposit withholding taxes for the IRS and leave shelves empty and employees without a paycheck.

A significant percentage of business owners pay creditors other than the IRS and end up with unpaid withholding taxes.  This decision often leads to personal financial disaster through the imposition of Trust Fund Penalty taxes.

The Internal Revenue Code requires employers to hold in trust for the government the employee’s income, social security, and Medicare taxes.  These taxes are known as “Trust Fund Taxes.”  If a business fails to pay Trust Fund taxes, the IRS assesses a “100% Penalty,” a penalty equal to the entire amount of the Trust Fund taxes, against the responsible individuals who operate the business or make business and financial decisions.  The 100% Penalty is also called the Trust Fund Penalty.

For example, if a business fails to file $20,000 in Trust Fund taxes, the IRS will assess a $20,000 penalty against the individuals the IRS believes operated or made business and financial decisions for the company.  The IRS then demands immediate payment and takes enforced collection action against the individual, including levying bank accounts and wages, if the individual does not pay the Trust Fund Penalties.

The IRS is required to determine who was responsible and that he or she “willfully” failed to pay the Trust Fund taxes.  Revenue Officers, however, often take a “shotgun” approach” and assess the Trust Fund Penalty against all individuals involved in the business.  The IRS forces many innocent business owners and managers, bookkeepers, accountants, even spouses of owners, to defend themselves in IRS Appeals or in court and prove they were not responsible for the non-payment of taxes.

If the IRS has assessed a Trust Fund Penalty, you most likely face a huge tax that threatens your home, bank accounts, and wages.  Trust Fund Penalties destroy your credit rating and place enormous stress on family life.

The Bankruptcy and Tax Law Center attorneys protect business owners, managers, bookkeepers, accountants, and their families from the burden of Trust Fund Penalties.

Don’t delay!  If you are a possible target of a Trust Fund Penalty, or if the IRS is taking steps to interview and assess against you, call the Bankruptcy and Tax Law Center at 1-800-TAX(829)-6183 or fill out our Contact Form before the IRS assesses tens of thousands in taxes against you.

If you’ve already been hit with this burdensome penalty, call to find out how we can help you. Our experienced, knowledgeable attorneys use the law to resolve this serious dilemma and protect your assets and your family.