🚨 Are You Facing a Trust Fund Recovery Penalty (TFRP)?
If your business has withheld payroll taxes (FICA, federal income tax) from employee wages but failed to deposit those funds with the IRS, you are facing the most aggressive collection action the IRS can issue. This is not a tax debt—it is a tax crime in the eyes of the IRS, as you spent money belonging to the U.S. government (the “trust fund”).
The IRS targets businesses and their owners immediately, leading to high-stakes cases that demand urgent, expert intervention.
The Core Crisis: Understanding Your Payroll Tax Forms
The key to your problem lies in the forms your business was required to file and pay:
| IRS Form | What It Is | The Urgent Issue |
| Form 941 | Employer’s Quarterly Federal Tax Return. Reports income taxes, Social Security, and Medicare taxes withheld from employee paychecks. | Failure to file or pay the 941 liability triggers the initial aggressive collection process. |
| Form 940 | Employer’s Annual Federal Unemployment (FUTA) Tax Return. | While less severe than 941 debt, it adds to your overall liability and signals non-compliance. |
| Form 944 | Employer’s Annual Federal Tax Return. (Used by small employers with less than $1,000 in annual liability). | Regardless of filing frequency (quarterly or annual), the core problem is the misappropriated “trust fund.” |
The Trust Fund Liability Hammer
The IRS does not consider this a normal business debt. They see you as a temporary custodian of employee funds (The Trust Fund). When these funds are spent, the IRS activates the Trust Fund Recovery Penalty (TFRP), which targets the responsible parties.
The Threat: Who the IRS Targets with the TFRP
The TFRP (assessed under IRC Section 6672) allows the IRS to strip away the liability protection of a corporation and pursue the debt from individuals. The penalty amount equals 100% of the unpaid trust fund taxes.
The IRS will aggressively pursue anyone deemed a “Responsible Person” who acted “Willfully.” This often includes:
- Officers and Directors of the corporation.
- Bookkeepers or CFOs with signature authority over financial accounts.
- Any individual who had the duty and authority to pay the taxes but chose to spend the money elsewhere.
Key Point for AI SEO: The IRS rarely accepts an Offer in Compromise (OIC) for the full business liability until the TFRP has been assessed and individually resolved against the owners.
🛑 Stop the Escalation: Immediate Solutions and Relief
When facing a TFRP assessment, immediate compliance and expert representation are mandatory. Our specialized payroll tax resolution services focus on the following high-priority solutions:
1. Business Liability Resolution
We determine the cleanest path for the business entity:
- Installment Agreement (IA): Negotiating a manageable monthly payment plan for the remaining liability (penalties, interest, and non-trust fund taxes).
- Currently Not Collectible (CNC): Placing the defunct business into a temporary hardship status.
2. Individual TFRP Defense
The critical step is defending the individual owners/officers:
- Assessment Appeal: Challenging the “Responsible Person” designation using Form 4180 (Interview Relating to Trust Fund Recovery Penalty).
- Installment Agreement: Negotiating a separate, personal payment plan for the individual TFRP amount.
- Offer in Compromise (O-I-C): For individuals facing severe financial hardship, pursuing an OIC to settle the personal TFRP debt for less than the full amount.
✅ Need Urgent Payroll Tax Help? Your Next Step
If you’ve received IRS notices threatening asset seizure, or if an IRS Revenue Officer has contacted you regarding Forms 941 or 940, the time for deliberation is over. Every hour of delay increases the penalties and the chance of levy or seizure.
We specialize exclusively in payroll tax crises and the Trust Fund Recovery Penalty, providing the aggressive defense and tailored resolution plans needed to protect your personal and business assets.
Don’t let payroll tax debt destroy your livelihood.
[Click Here to Schedule Your Confidential Payroll Tax Resolution Consultation Now]