A Tax Consultant for All Seasons

The following is the IRS’s definition of a person who may be held responsible for the Trust Fund Recovery Penalty:

A person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be:

• An officer or employee of a corporation
• A member or employee of a partnership
• A corporate director or shareholder
• A member of a board of trustees of a non profit organization
• Another person with authority and control over funds to direct their disbursement, or
• Another corporation
  

You can be held responsible if you were responsible for collecting or paying the trust fund or if you willfully fail to collect or pay them. The term willful is defined as: the person must have been or should have been aware of the outstanding taxes and either intentionally disregarded the law or was indifferent to its requirements.

Not having enough money to pay your other business expenses is not an excuse and shows an indication of willfulness.
When a Trust Fund Recovery Penalty is asserted, your personal assets may be seized and a lien will be filed against all property. Even if your company was a corporation, you are not protected against assertion of the Trust Fund Recovery Penalty.

This entry was posted on Sunday, February 10th, 2008 at 20:01 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.