Services: Trust Fund Recovery Penalty: Businesses

A Serious Penalty Affecting Individuals and Businesses

If you operate your business as a sole proprietorship, the IRS can collect the entire unpaid Form 941 liability (Trust Fund and non-Trust Fund), plus IRS penalties and interest, from you. The Trust Fund Recovery Penalty does not generally apply in this situation.

Businesses frequently make voluntary payments to the IRS without proper designation language. If a business makes a voluntary payment to the IRS without proper designation language, the IRS typically applies these funds first to penalties, then to interest, then to the non-Trust Fund portion of the corporate liability, and lastly to the Trust Fund portion of the corporate liability.

The application of money in this fashion continues to expose the individuals who run the business to the potential assertion of the Trust Fund Recovery Penalty. All voluntary payments should contain special designation language to ensure that the payments benefit the individuals and reduce or eliminate the potential assertion of the Trust Fund Recovery Penalty against them. The attorneys at Patrick T. Sheehan and Associates can carefully craft this special designation language for you.

If you own or operate a corporation that has unpaid federal Form 941 liability or if you are an officer or shareholder concerned about your personal exposure to a Trust Fund Recovery Penalty or facing a Trust Fund Recovery Penalty, call us. Patrick T. Sheehan & Associates, Attorneys at Law, P.C. is well suited to uncover the best strategy to help you solve your IRS problems and alleviate the burden of a Trust Fund Recovery Penalty. Or, click here to learn more about Trust Fund Recovery Penalty - Individuals.

We can help. Call us before the IRS calls you! ®