In general, the IRS is authorized to assess the Trust Fund Recovery Penalty against individuals involved in the business who have control over the use and disposition of a company’s assets, or otherwise have decision making authority in connection with the payment of the company’s liabilities, and who also "willfully" fail to pay the company’s Trust Fund Taxes. The IRS’s right to asses the Trust Fund Recovery Penalty is a legal issue dependent on applicable law and the individual facts and circumstances of a case.

On many occasions, our firm is retained to solve a Trust Fund Recovery Penalty problem months, or even years, after it has been assessed. This generally happens after the IRS has commenced enforced collection activity for an "old" Trust Fund Penalty liability, or a taxpayer is prevented from selling or refinancing his or her house due to a federal tax lien filed in connection with the original Trust Fund Recovery Penalty assessment. The potential solutions are varied and complex, and require skilled representation. At times, an offer-in compromise or request for lien discharge or subordination will be the answer. Sometimes the solution requires payment of the withholding tax for one employee, followed by a claim for refund. Sometimes the problem can be resolved through IRS administrative appeal procedures; and sometimes, the solution lies in federal court litigation. In all cases, an attorney experienced in representing taxpayers in Trust Fund Recovery Penalty cases should be consulted.