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Jury Instruction - 10.10.6 Section 6672 Penalty

Jury Instruction - 10.10.6 Section 6672 Penalty-2026

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The document discusses the legal implications of the § 6672 penalty related to tax refund suits, focusing on the responsibilities of corporate officers and employees regarding the withholding and payment of federal income and social security taxes. It outlines that individuals deemed 'responsible persons' can be held personally liable for failing to pay these taxes if their failure is deemed willful. The document explains the criteria for determining responsibility and willfulness, including the burden of proof in such cases.

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Click ‘Get Form’ to open it in the editor.
Begin by entering the name of the corporation in the designated field, ensuring accuracy as this identifies the entity involved.
Fill in the total amount of federal income and social security taxes that were withheld but not paid, as this is crucial for establishing liability.
Review the definitions provided within the form regarding 'responsible person' and 'willfully' to understand your obligations and potential liabilities.
Answer the special interrogatories by selecting 'Yes' or 'No' based on your assessment of whether the Plaintiff was a responsible person and if their failure was willful.
Ensure all fields are completed accurately before saving or exporting your document for submission.

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What is the penalty imposed under section 6672?

Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties

What is the trust fund recovery penalty?

A trust fund recovery penalty (TFRP) is a hefty fine charged for an employer knowingly or willfully keeping employee FICA and income taxes owed to the IRS. Employers retain taxes owed by an employee to the IRS from their paychecks and submit them into a trust.

What is the penalty for Section 6672?

Under IRC Section 6672, any person who is required to collect, truthfully account for, and pay over such taxes may be assessed a 100% penalty of the unremitted trust fund taxes for the willful attempt to evade or defeat such taxes.

What is 6672?

According to IRC 6672, the TFRP is equal to the total amount of tax evaded, not collected, or not accounted for and paid over. IRC 6672 applies to the employees portion of employment tax, namely, the withheld income tax and employees portion of FICA. It does not apply to the employers portion of employment taxes.

What are the two factors the IRS considers for the trust fund recovery penalty?

Figuring the TFRP amount The penalty is computed based on: The unpaid income taxes withheld, plus. The employees portion of the withheld FICA taxes.

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What is the maximum financial penalty for a willful violation?

If a corporation or individual uses this income instead of it remaining in trust, the IRS will give them a trust fund recovery penalty which is equal to the taxes withheld. For example, if XYZ Co. misused $10,000 of withheld taxes, the company would have to pay back the $10,000 plus a $10,000 penalty.

How much is the trust fund recovery penalty?

How we calculate the penalty. The accuracy-related penalty is 20% of the portion of the underpayment of tax that is attributable to negligence or disregard of rules or regulations.

Jury Instruction - 10.10.6 Section 6672 Penalty-2026

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