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.
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.
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."
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.
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.
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