What is the Trust Fund Recovery Penalty?
The Trust Fund Recovery Penalty (“TFRP”) relates to employment taxes (IRS Form 941) due by an employer to the IRS for wages paid to its employees. It is the employees’ portion of income tax, Social Security, and Medicare, withheld by the employer from employees’ wages. Although referred to as a penalty, it is a tax. When an employer does not make required federal tax deposits for employment taxes, it incurs a tax liability comprised of the Trust Fund and non-Trust […]
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