Alexandria Trust Fund Recovery Penalty Lawyer

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.