My name is Alvin Brown. I'm a tax attorney. Today, I'm going to discuss taxes and the trust fund penalty. Obviously, all businesses have to pay their payroll taxes. In this economy, there are a lot of reasons why some businesses have problems and aren't paying their own taxes. The question often arises: who is responsible for paying payroll taxes if the company can't pay? According to statute 6672, if the company doesn't pay payroll taxes, it is assessed against the responsible person or persons. It is possible for more than one person to be involved and responsible for paying payroll taxes. So, to the extent that the business doesn't pay, they can assess the responsible person. The statute requires the responsible person to be identified, and this issue is heavily litigated. Many times people don't even know that the taxes are not being paid. The IRS is very aggressive in these cases and investigates everyone who they think might be involved in the failure to pay payroll taxes. There have been many successful cases where people claim they were not responsible, and I represent them to prove their lack of responsibility. Factors such as decision-making authority, payment authority, and equity ownership are considered by the courts. Determining responsibility is not based on one factor alone, but the person who made the decision not to pay payroll taxes is most likely to be hit with the trust fund penalty. In many cases, this penalty cannot be collected. In this scenario, I can negotiate an offer and compromise for the business, as well as the responsible person. This can help relieve the burden of the trust fund penalty. However, it's important to note that payroll taxes cannot be eliminated through an offer and compromise solely based on portability. It's not something...
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How to avoid trust Fund Recovery penalty Form: What You Should Know
A taxpayer who has voluntarily paid the tax has waived the penalty, and the federal tax liability is eliminated. In the event the tax is not paid within 90 days, the IRS can take legal action. The U.S. Tax Court may make an order against you to collect the taxes and interest. You also may be enjoined from asserting the right to payment. You can find more information about the Trust Fund Recovery Penalty and penalties on our website's Tax Liability and Penalties Guide. [5.19.
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