The Trust Fund Recovery Penalty (TFRP) is a severe tax penalty assessed against individuals who fail to comply with certain payroll tax obligations. You may have several defenses and appeal options if the IRS assesses the TFRP, so contact a tax attorney for assistance.
Key Insights We Will Discuss:
- When the TFRP may be assessed
- What to expect if the IRS is investigating a potential TFRP case
- Possible defenses to a TFRP assessment
What Is The Trust Fund Recovery Penalty?
Trust fund taxes are the employee’s portion of employment taxes and federal income taxes withheld from employee paychecks. The employer holds this money “in trust” and is responsible for submitting it to the IRS.
The TFRP can be assessed against an individual who meets the following criteria: