Posted by Fred Lake

Some Key Facts About Trust Fund Penalties

Some Key Facts About Trust Fund Penalties

Numerous businesses all over the nations are responsible for the retention of certain taxes from the earnings of their employees and sending those funds to the IRS. The Internal Revenue Service (IRS) has the specialist to force penalties, issue liens, and even seize property on the off chance that you neglect to turn over these funds which have been entrusted to you. On the off chance that you have gotten a notice from the IRS that a Trust Fund Recovery Penalty will be evaluated on your proceedings, it is advisable you find a tax preparer to guide you on what to do. Consulting a tax preparer or Tax Accountant will help you find out your rights and how to stay away from cruel penalties. 

Trust Fund Recovery Penalty 

The Trust Fund Recovery Penalty enables the IRS to punish any individual who is responsible for the retention, bookkeeping, saving, or paying certain payroll and business taxes in the event that they neglect to turn those funds over to the office. In particular, the IRS has the right to punish anyone responsible who deliberately refuses to perform his or her obligations. The Penalty exists since businesses are basically entrusted to gather and hold their employees’ taxes for the benefit of the IRS. Congress enabled the IRS to make this move as an approach to prevent employees from using this fund for personal reasons 

Responsible Parties 

The IRS can basically assess a penalty against any individual who is considered "responsible" for the entrusted withholdings. This has been understood rather extensively and can apply to pretty much any individual who has the obligation and capacity to coordinate the funds here and there.  People who might be viewed as responsible parties, and in this manner subject to the Trust Fund Recovery Penalty, include: 

•Officers and employees of companies and associations; 

•Sole owners; 

•Board of Trustees individuals; and 

•Certain outsider specialists. 

For whatever length of time that you have the (1) obligation and (2) capacity to coordinate withholdings that have been entrusted to you or your association, you will be viewed as responsible parties. 

Unyieldingly Failing to Direct Funds 

The IRS can possibly evaluate a Trust Fund Recovery Penalty on the off chance that you have persistently neglected to send them the withholdings. You will be considered to act unyieldingly if: 

1.You thought about the remarkable taxes because of the IRS and deliberately neglected your commitment to remit the funds to the organization, or 

2.You have the knowledge about the outstanding taxes to be sent to IRS  and were unconcerned with your commitments. 

Willful conduct can be established when you act purposefully or very carelessly. As long as you are knowledgeable and aware of the money to be remitted to the IRS, you will be considered to have acted unyieldingly. 

Surveying the Trust Fund Recovery Penalty 

At the point when the Inland Revenue Service discovers that you have neglected to turn over taxes with which you have been entrusted, it will send you a notice of their aim to force the penalty. The penalty will, for the most part, be equivalent to the measure of the retention with interest added. IRC 6672 applies to the representatives' segment of business charge; the retained salary assessment and worker's portion of FICA. On the off chance that you don't concur with the organization's choice to force the penalty you have the 60 days to file an appeal.  On the off chance that you don't do anything, the Inland Service Revenue will send you a Notice and Demand for Payment. Right now, the IRS has the expert to issue and impose liens and tools to gather installment.  

What to Do If You've Received Notice of Trust Fund Recovery Penalty 

On the off chance that you have gotten notice of a looming Trust Fund Recovery Penalty it is critical to act rapidly. You have 60 days to file an appeal in which you challenge the organization's discoveries as well as propose alternative resolutions. Employing an accomplished tax preparer who is personally knowledgeable about the Trust Fund Recovery Penalty process will expand the odds of anchoring a constructive result. A Tax preparer can assess your case and help to devise a procedure to determine the circumstance and achieve success.

Fred Lake
Contact This Member