The Railsback Group, P.C.

Some tax sins are worse than others. An example is not paying over income and employment taxes that have been withheld from employees’ paychecks. In these cases, the IRS can assess the trust fund recovery penalty, also called the 100% penalty, against any responsible person. It’s called the 100% penalty because the entire unpaid tax amount can be assessed personally against a responsible person or several persons. It could be a shareholder, director, officer, partner or employee of a business. To be hit with the penalty, the person must: 1) be responsible for collecting, accounting for, and paying over withheld federal income and payroll taxes, and 2) willfully fail to pay over those taxes.