trust fund recovery penalty


Loaning Money to Business Triggers Trust Fund Penalty

You work hard to build a business, you find success over the years, and then you find out that your long term accountant did not remit payroll taxes and you owe a significant balance.  What do you do?  The recent McClendon v. United States, No. 17-2017…


Check Signing Activity Not Sufficient for Trust Fund Penalty

The IRS will often assert trust fund recovery penalties against anyone who signs checks written on the business checking account. The court addressed this in Shaffran v. Commissioner, T.C. Memo. 2017-35, concluding that some check signing activity alone is not sufficient to impose a trust fund recovery penalty. The case provides some insight as to […]

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Taxpayer May Deduct Taxes for Defunct S Corp Paid in Current Year

In Brown v. Commissioner, T.C. Memo. 2017-18, the court addresses whether taxpayers can claim a deduction for taxes paid by a defunct S corporation in the current year when the taxes are owed by the corporation for prior tax years. Many taxpayers do not realize they can claim a deduction for taxes in this situation. […]

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Court Says No Reasonable Cause Defense for Trust Fund Penalty

In United States v. Liddle, Case No. 14-cv-04761-BLF (N.D. Cali. 2017), the court considered a trust fund recovery penalty case. The penalty was imposed on a CEO who admitted that his company failed to pay its employment taxes. The only question was whether reasonable cause is a defense to trust fund recovery penalties. Businesses must […]

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Preserving Judicial Review for Trust Fund Recovery Penalties

Taxpayers who are assessed trust fund recovery penalties need to take note of the U.S. Tax Court’s recent decision in Anderson v. Commissioner, T.C. Memo. 2016-219. The decision highlights a potential foot fault they may make when trying to resolve their trust fund recovery penalties at the IRS administrative level. Facts and Procedural History The […]

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Reportable Transaction Penalty Not Divisible, Full Payment Required to Bring Suit

Tax matters can be litigated in a number of different courts. One of the advantages of bringing suit in U.S. Tax Court is that the tax does not have to be paid prior to bringing suit. For tax matters litigated in the U.S. District Courts or the Court of Federal Claims, the tax has to […]

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Stay-at-Home Mom Not Liable for Trust Fund Recovery Penalty

The IRS has the ability to assess a trust fund recovery penalty against those who are responsible for withholding payroll taxes for employees if they fail to withhold and pay over the taxes to the IRS. Then penalty is equal to the amount of the withheld but unpaid tax. Liability for the penalty falls on […]

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A Failing Businesses can Trigger Trust Fund Recovery Penalties

Taxes are often neglected when a business is having financial difficulties. This can have serious repercussions for the business and the individuals who are responsible for having taxes withheld and remitted to the IRS. The IRS has the ability to asses…