Many businesses have an obligation to withhold workers’ Medicare, Social Security, and income tax deductions aside, in trust, until they must remit them to the government through the Electronic Federal Tax Payment System. If you do not remit these deductions at the specified time, you may be hit with a penalty. That is when you need an Alexandria trust fund recovery penalty lawyer to intercede.

In very rare cases, a business might be liquidated in order to account for the missing funds, but you can usually address the issue administratively. A resourceful tax lawyer may be able to analyze your situation and come up with an adequate response that gets your business back into compliance.

Who is Liable for Paying a TFRP?

Anointed officers for a business must file a Form 940 once a year and a Form 941 once a quarter. The IRS can look beyond the business owner to collect trust fund recovery penalties (TFRP). They determine who the officer should be, what other management decision they have, and whether they intentionally failed to remit payroll taxes. The people they identify are jointly and severally liable for the penalty, which means the IRS can demand the money from one or all of them. Those at risk include:

  • Sole proprietors, partners, members of a limited liability company
  • Chief Executive Officers and Directors of corporations
  • Shareholders
  • The Board of Trustees for non-profit organizations
  • Executive employees who make financial decisions
  • Outside contractors, such as accountants

IRS revenue officers can examine bank statements and other financial information to determine who controls funds and writes checks, thus identifying all responsible parties. They then conduct interviews and file a Form 4180 report titled “Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes.” This is the key moment when the interviewer, usually in person, names someone as a party responsible for paying the trust fund penalty.

Appealing a TFRP

If the IRS believes someone was the party responsible for remitting the payroll taxes, they will receive a proposed assessment and 60 days to appeal it before the assessment is carried out. It is a good idea to consult with a trust fund penalty recovery lawyer in Alexandria about whether this can be appealed or abated.

Additional TFRP Remedies

In order to make good with the IRS, the business will need to pay the trust fund tax they owe through an installment agreement. If they have some funds but not enough to settle the full tax, the IRS may even consider an offer in compromise in which they take less money than was assessed. The IRS will determine the business’s ability to pay before considering this option.

By applying for Currently Not Collectible (CNC) status, it can pause any IRS collection efforts temporarily. The business must show that paying this amount would impact their ability to pay the necessary expenses, such as payroll and rent. An Alexandria trust fund recovery penalty lawyer could help determine which option is ideal for a particular business.

Protect Your Business With an Alexandria Trust Fund Recovery Penalty Attorney

Businesses both big and small have many obligations they must meet, including to the federal government. Certain officers are charged with remitting their payroll taxes to the IRS. When this does not happen, the IRS may assess a penalty. At Pontius Tax Law, our Alexandria trust fund recovery penalty lawyer could assess your business’s financial standing and forge a path that allows you to make good with the IRS. Give us a call for a consultation.

Attorney John Pontius

Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC,  Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.

Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.

Client Reviews
John helped us with a DC tax audit and succeeded in getting us a "no change" final decision. The issues were related to two flow-through entities and the use of carry-forward operating losses -- something that the DC auditors struggled to understand and with which they did not have any...
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Mr. Pontius is extremely professional and was able to take care of my tax returns which includes international bank accounts quickly and at a very reasonable price. Would definitely recommend.
I received a fee this past November from the IRS for over $800 because of an error I made on my 2016 taxes. I called my cousin, John Pontius, and he immediately knew what steps needed to be taken. Thanks to him, the fee was cleared. A 10 minute conversation...
As an American citizen living in the Middle East my local banker informed me that I needed to file FBARs and report my worldwide income to the IRS. Through the recommendation of another attorney at an international law firm, I was introduced to John Pontius. Mr. Pontius efficiently and effectively...
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John handled a difficult IRS lien for my client. He was excellent in getting the lien released so we could close on the property. I would highly recommend John .
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We were seeking tax advice with managing two properties, LLC, as well as some future financial planning. John responded to my call in a timely manner and was happy to answer our questions while referring us to specialists who can manage our accounts on a more regular basis.
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