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Making You Pay: When payroll taxes go unpaid, the IRS can hold it’s owners, managers, and bookkeepers responsible. The IRS transfers the organization payroll obligation to individuals and blames them because of not public accountant cpa making the payroll expenditures. This is called the “Trust Fund Recovery Penalty” (TFRP). This applies mostly to incorporated businesses, but just in case small business was an LLC, partnership, or sole proprietorship, perform be found responsible for payroll taxes without the TFRP provision. The penalty equals the required taxes owed, so it’s also called 100% Payroll Penalty (Internal Revenue Code 6672).
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