TRUST FUND RECOVERY PENALTY (TFRP)
The Trust Fund Recovery Penalty (TFRP) is a penalty assessed against the owners and operators of a business that has failed to pay its payroll taxes. If a business does not, or cannot, pay its payroll tax obligations, the IRS can seek to collect a portion of those taxes directly from the owners of the business. The Trust Fund Recovery Penalty is the method by which unpaid payroll taxes are applied to the business owners and operators.
The application of the TFRP is not entirely bad, however. While the business owner does become personally liable to the IRS, the TFRP liability is typically substantially reduced from the size of the original payroll tax debt. And, additional resolution options, such as Offers in Compromise, may become available depending on the financial situation of the business owner.
Contact us today, and we’ll help explain your options for resolving this matter once and for all.