Trust Fund Recovery Penalty Defense

Two elements have to be present. You must be a responsible person, meaning someone with the authority to decide which bills get paid, and the failure must be willful, meaning you knew the taxes were unpaid and paid other creditors anyway. Willful in this context does not require bad intent.

The net is wider than most people expect. Owners, officers, bookkeepers, controllers, and sometimes outside advisers have all been assessed. The IRS often interviews several people and assesses more than one of them, then collects the amount once across whoever pays first.

The IRS conducts an interview, usually on Form 4180, and the answers given in it become the backbone of the case. People routinely walk into that interview alone and concede responsibility and knowledge without realizing what they have conceded. That is the point at which representation is worth most.

If the IRS proposes the assessment you receive a letter giving you a limited window, commonly 60 days, to appeal before it is assessed. Missing that window does not end every option, but it removes the cheapest and most effective one.