Employment Tax Resolution
941 Payroll Tax Problems & Trust Fund Recovery
Employment tax issues are the IRS's highest collection priority. Unpaid 941 taxes can result in Trust Fund Recovery Penalty (TFRP) assessments against business owners personally. We help businesses and individuals resolve payroll tax debt and defend against personal liability.
Payroll Tax is Personal
The IRS can hold YOU personally liable for unpaid 941 taxes
Real Results: Payroll Tax Case
"Construction company owner faced $287K in 941 debt. Revenue Officer proposed $143K TFRP against owner personally. We demonstrated owner delegated payroll to bookkeeper, had no control over payments. TFRP dismissed, business settled on installment agreement."
*Illustrative scenario. TFRP defense depends on demonstrating lack of willfulness and control.
Understanding Trust Fund Recovery Penalty
What is TFRP?
The "trust fund" portion of payroll tax is the income tax and employee share of FICA withheld from employee wages. This money belongs to the government—you're just holding it in trust. If not paid, the IRS can assess a 100% penalty against responsible persons.
Who is a "Responsible Person"?
- Business owners and officers
- Anyone who controls finances
- Check signers
- Those who direct which bills get paid
TFRP Defense Strategies
Challenge Responsibility
Demonstrate you weren't a "responsible person"—you didn't have authority to direct which bills got paid, didn't sign checks, or were only nominally an officer.
- • Delegated payroll to others
- • No check signing authority
- • Minority shareholder without control
Challenge Willfulness
Even if responsible, you must have "willfully" failed to pay. If you didn't know about the non-payment or reasonably believed taxes were being paid, TFRP may not apply.
- • Relied on payroll service
- • Bookkeeper embezzlement
- • No knowledge of non-payment
IRS Authority & References
Related Resolution Services
Facing Payroll Tax Problems?
Don't let business payroll tax become personal liability. We can help defend against TFRP and resolve your 941 debt.
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