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Making You Pay: When payroll taxes go unpaid, the IRS can hold it's owners, managers, and bookkeepers at fault. The IRS transfers company payroll obligation to individuals and blames them for not making the payroll expenditures. This is called the “Trust Fund Recovery Penalty” (TFRP). This is applicable mostly to incorporated businesses, but when your small business was an LLC, partnership, or sole proprietorship, carbohydrates be found responsible for payroll taxes without the TFRP provision. The penalty equals the taxes owed, making it also the 100% Payroll Penalty (Internal Revenue Code 6672).
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