Business Business Trust Fund Recovery Penalty Frequently asked questions
We now have an FAQ list that we hope will help you answer some of the more common questions regarding Business Trust Fund Recovery Penalty.
1. What is the Business Trust Fund Recovery Penalty?
You have payroll in your company and you failed to pay the IRS what you had to pay which you were trusted with to hold for the IRS until it was due to be paid.
This happens a lot when you take payroll tax money for operations, or theft.
2. Is the penalty correct?
Usually yes, unless you have grounds to contest it.
3. What do you do?
- We contact the IRS.
- We request your record.
- We calculate your balance due.
- We check for unfiled taxes.
- We review all the data in your file.
- We will recommend which option is best.
- We will prepare the appropriate forms with the information you provide.
- We handle the contact with the IRS.
4. How much is it?
100% of the trust fund tax. You owe $100,000 in payroll taxes then your penalty will be $100,000. Now you owe $200,000.
5. What did I do?
- You failed to pay the full tax balance when due.
- You no longer have the money.
- The IRS will assess the penalty against each individual that is responsible. Five people responsible? Each one will be assessed 100% of the tax owed.
6. What information do I need to gather?
Tell us exactly what happened that tax year, or years, and gather all the documents related to the tax year(s).
We handle the rest.
7. How long does it take?
Depending on your file, information gathered, compliance, and resolution chosen.
It can take months. If we appeal, then add six additional months.
8. Will interest and penalties continue?
Yes. Up to the legal limitations.