Employment Tax Matters

  • Trust Fund Recovery Penalty and Interviews – Employers are required to withhold taxes from their employees. These taxes are “trust fund” taxes. The IRS can assess a Trust Fund Recovery Penalty, formerly known as a 100% penalty, against individuals responsible for paying the tax when employers fail to pay these taxes to the IRS. This allows the IRS to collect delinquent trust fund employment taxes directly from the individuals responsible for ensuring the tax is paid. A Form 4180 interview is conducted with the individuals believed to be responsible for payment of trust fund taxes to help determine whether or not to assess a trust fund recovery penalty against an individual.