Before assessing the trust fund recovery penalty, a revenue officer will conduct an investigation of the employer to determine which individuals have a duty to ensure that employment taxes are withheld, collected, and/or paid to the government. At the end of the investigation, the revenue officer will make a recommendation for assessment of the trust fund recovery penalty against individuals identified as responsible persons. The statute of limitations for assessment of the penalty is three years from the later of April 15 of the year after the employment tax returns were due or the date that the employment returns were actually filed.

When a penalty assessment is proposed, the recommending revenue officer will send a letter to the responsible persons identified. This letter informs the individual that the penalty is being proposed and requests that the individual agree to the assessment.

If the individual does not agree with the assessment of the penalty, he or she may discuss the issue with the revenue officers manager and may appeal the decision with the appeals office. If an agreement cannot be reached at the appeals level, the individual may elect to litigate the issue in federal district court or the Court of Claims.

 

March 25, 2014

Assessing trust fund recovery penalty and option to appeal

Before assessing the trust fund recovery penalty, a revenue officer will conduct an investigation of the employer to determine which individuals have a duty to ensure […]
March 25, 2014

How to determine responsible person for trust fund recovery

If the IRS deems someone a responsible person and assesses the trust fund recovery penalty, the individual can appeal that determination and potentially fight the decision […]
March 25, 2014

When a corporate officer is considered a responsible party

A corporation acts through its officers, which are presumed to have the duty to withhold employment taxes from wages and make the necessary disbursements to the […]
March 25, 2014

How unpaid employment tax payments are allocated

Once the trust fund recovery has been assessed against a responsible person, an important aspect to consider is the allocation of future payments to the government. […]
March 25, 2014

Can more than one person be considered responsible by IRS

It is not uncommon for more than one individual to be simultaneously considered a responsible person. In these situations, joint and several liability is attached to […]