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Direct representation, not advice from the sidelines.
Build your trust fund penalty defense before the interview. Tell us where your case stands, and we will confirm your exposure, identify who is genuinely at risk, and tell you what to do before the Form 4180 interview. No obligation.
Most tax problems stay with the entity. A corporation owes a balance, pays or disputes it, and the owners move on. The trust fund recovery penalty does not work that way.
When a business withholds income tax, Social Security, and Medicare from paychecks but never sends it to the IRS, that money was held in trust. It belonged to the employees and the Treasury. The penalty is 100 percent of the unpaid trust fund taxes, assessed personally, and it does not go away when the business closes, restructures, or files for bankruptcy.
Not all payroll taxes are trust fund taxes. The employer's own share of Social Security, Medicare, and federal unemployment is a business cost; if it goes unpaid, the IRS pursues the business. Trust fund taxes are the amounts withheld from employees, their income tax and their share of Social Security and Medicare, that the employer only holds before remitting. Those are the amounts the penalty reaches.
Control over the business generally implies control over whether payroll taxes are paid.
Title is a starting point, but the IRS looks at actual authority, not the org chart.
Signature authority or the ability to direct payments is enough, even with no ownership.
Less common, but possible where a third party actually controlled which bills were paid.
Courts have found creditors responsible where their approval controlled disbursements.
The question is never the title. It is whether the person could have ensured the taxes were paid and did not.
Willful does not mean intent to defraud. It means awareness that the taxes were not being paid, combined with a choice to use available funds for something else. A business runs short, payroll and rent are due, a supplier threatens to walk, and the taxes wait. That is usually enough. Looking away after you have reason to suspect a problem can also meet the standard.
Show the person lacked real authority, using job descriptions, signature cards, and board minutes.
Reasonable delegation to a competent professional, with monitoring, is a defense. Blind delegation is not.
Designate partial payments toward trust fund taxes so they reduce the personal exposure.
If the employment tax assessment is wrong, the error flows into the trust fund number.
The IRS asks who had financial authority and who decided which creditors got paid. The answers shape who is assessed, so representation matters here.
We pull transcripts, confirm the trust fund amount, and identify who is genuinely at risk.
The proposed assessment arrives with a 60-day appeal window. That window is where the defense is built.
We assemble the responsibility, willfulness, allocation, or liability arguments that fit the facts.
We carry the appeal and coordinate any payment arrangement with the broader resolution.
Know where your personal exposure stands before the IRS decides. If an investigation has started, we will tell you quickly who is at risk and how to respond. Confidential, no obligation.
A common misconception is that bankruptcy ends the penalty. It does not. A business bankruptcy halts collection against the company but not the IRS's ability to assess and collect the trust fund penalty from individuals; it was built to survive the entity's dissolution. Personal bankruptcy rarely helps either, since these penalties are generally nondischargeable, in the same category as fraud penalties.
The trust fund recovery penalty rarely appears out of nowhere. It surfaces in businesses already under strain: tight cash flow, disorganized payroll, or growth that outpaced the financial function. That is the same environment a CPA-led finance function is built to catch, where someone reviews the deposit schedule each period and flags the first missed deposit before it compounds into personal liability.
Remediation after the fact is possible: representation at the Form 4180 interview, a response to Letter 1153, appeals, and payment arrangements. But the cost, in money, time, and personal exposure, runs far higher than keeping the payroll tax function clean in the first place.
A good fit if you:
If an investigation has begun, act before the Form 4180 interview, not after. Once an assessment issues, the options narrow.
A single Form 4180 conversation can determine who is assessed personally.
Responsibility, willfulness, allocation, and liability arguments each have to be raised correctly and early.
A finance function that watches the deposit schedule catches the first missed deposit before it compounds.
Payroll tax, entity structure, and cash flow connect. We handle this with your payroll tax compliance and any resolution in motion.
The trust fund recovery penalty is one of the few IRS tools that can follow a person out of a failed business and into their next one. Once an assessment is issued, the options narrow. The time to handle payroll tax exposure is before the letter arrives.
Trust fund recovery penalty work is priced by scope, not a flat rate. The main factors are:
We scope the work to where the case stands and quote it directly.
Talk to Dimov Tax about your payroll tax history, who had financial authority, and where the exposure sits.
