Personal Liability Warning

Trust Fund Recovery Penalty:
The IRS Can Go After You Personally

The Trust Fund Recovery Penalty (TFRP) lets the IRS pierce the corporate veil and hold business owners and officers personally liable for unpaid employee payroll taxes. Even an LLC or corporation does not protect you. Dream Financial Management defends TFRP cases nationwide since 1994.

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Critical Warning

Why the TFRP Is One of the Most Dangerous Tax Penalties

Most business owners don't realize that unpaid payroll taxes are treated differently than any other tax debt. The IRS can hold you personally liable — regardless of whether your business is an LLC, corporation, or sole proprietorship.

No Corporate Shield

The TFRP pierces the corporate veil — your LLC or corporation won't protect you from personal liability for withheld payroll taxes.

No Bankruptcy Escape

Unlike most tax debts, TFRP cannot be discharged in bankruptcy. It follows you personally for years.

Personal Assets at Risk

The IRS can levy your bank accounts, garnish wages, and seize personal property — including your home.

Smart Defense Required

A skilled defense can reduce or eliminate your TFRP liability — but only if you act before the IRS interview.

Employees, Payroll Binder data finance report business with graph analysis in office.
How We Defend Your Case

Our Proven TFRP Defense Strategy

1

Assess Responsible Person Exposure

We review your role, authority, and financial decisions to determine your actual exposure to personal liability.

2

Challenge "Willfulness"

We build the evidence to show you were not willful — or that the statute of limitations or procedural defects defeat the assessment.

3

Represent You at the Form 4180 Interview

We attend the critical interview with the IRS Revenue Officer and assert all available defenses on your behalf.

4

Negotiate a Favorable Resolution

Where liability is established, we negotiate settlement options to minimize what you pay and protect your personal assets.

TFRP — What You Need to Know

Who Is a "Responsible Person"?

The IRS defines this broadly. It can include: owners, officers, directors, partners, members, employees with check-signing authority, bookkeepers who pay bills, and even outside accountants who control which bills get paid. If you had the authority to decide which creditors got paid — and you paid other creditors instead of the IRS — you may be a responsible person.

What Makes It "Willful"?

Willfulness means you knew the payroll taxes were not being paid and you chose to pay other creditors instead. It does NOT require criminal intent — just that you voluntarily and consciously made the choice. Even paying essential business expenses (rent, suppliers, utilities) instead of the IRS can be "willful."

TFRP Cannot Be Discharged in Bankruptcy

Unlike many tax debts, the TFRP is NOT dischargeable in either Chapter 7 or Chapter 13 bankruptcy. Once assessed, this debt follows you — the IRS can levy your personal bank accounts, garnish your wages, and seize your assets indefinitely.

Form 4180 Interview — Critical

The IRS Revenue Officer will schedule a Form 4180 interview to determine if you are a responsible person who acted willfully. Do not attend this interview alone. What you say can establish personal liability. We represent you at this interview and assert defenses.

Facing a TFRP? Contact Us Before the Form 4180 Interview

The TFRP interview is where liability is established. Having representation changes the outcome. Dream Financial Management defends TFRP cases nationwide. Since 1994.

TFRP Defense — Free Consultation