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If you are a business owner, or the person responsible for collecting and depositing certain employment and payroll taxes, the IRS may try to collect unpaid taxes from your personal assets in some situations. The trust fund recovery penalty, or TFRP, is a specific penalty assessed by the IRS. The IRS can issue a TFRP against those who are responsible for collecting and paying trust fund taxes to the government but intentionally fail to do so.

Of course, there can be many reasons why a business does not pay taxes. Maybe your business ran into financial trouble.  Or perhaps your payroll company failed to pay employment taxes.  Whatever the reason, the IRS now wants to collect all the unpaid taxes from your personal assets.  Adding to your concerns, you just found out that your LLC or corporation will not shield your personal assets from the IRS

How Much Is the Trust Fund Recovery Penalty?

The amount of a trust fund recovery penalty varies, depending on the amount of unpaid taxes. The penalty amount is generally equal to the amount of unpaid taxes, plus interest. For example, if you paid an employee $2,000 and noted on their paycheck that you withheld $350 in income tax, Social Security, and Medicare, the trust fund recovery penalty would be $350, plus interest. Over time, and with multiple employees, trust fund recovery penalties can be crippling.

When Does the IRS Impose a Trust Fund Recovery Penalty?

While facing a trust fund recovery penalty is certainly a stressful situation, having an experienced attorney on your side can help relieve much of the pressure you feel. First of all, the IRS cannot assess a trust fund recovery penalty in every situation where taxes are unpaid. Thus, understanding what the IRS must prove to come after your personal assets can help alleviate stress.

In order to collect from your personal assets, the IRS must show you were both 1) the person responsible for “withholding, accounting for, or depositing or paying” the unpaid taxes, and 2) that the failure to pay the taxes was willful. At Kaczmarek & Jojola, we know that this is not usually the case. Our attorneys help clients develop strong and compelling defenses when the IRS seeks to impose a TFRP. Our reliable Scottsdale trust fund penalty lawyers can help defend you and protect your hard-earned money from the IRS.

Our representation in trust fund cases is multifaceted and includes several key elements. First, we will conduct interviews with any and all potential witnesses. Next, we will sit down and determine what documentation will be harmful to your case, as well as what evidence may be helpful for resolving the case in your favor.

Once we have all the pertinent information sorted out, we can develop a strong defense against the imposition of the trust fund penalty. We will ensure everything is prepared for the IRS’s trust fund interview (also known as the 4180 interview). Our experienced and knowledgeable Scottsdale trust fund recovery penalty lawyers can also represent you in any trust fund penalty litigation, if necessary.


If you recently received notice from the IRS that it is seeking to impose a trust fund recovery penalty against you, reach out to the attorneys at Kaczmarek & Jojola. You do not have to lose your assets! Our experienced Scottsdale trust fund recovery attorneys can work with you through these issues with the IRS. Both founding partners of Kaczmarek & Jojola are former IRS trial attorneys who are intimately familiar with how the IRS handles TFRP cases. We understand not only what the IRS must prove, but also how the IRS views these cases and what can convince the IRS not to pursue a penalty. To learn more, contact our offices and let us help protect your assets.