Jury Instruction - 10.10.6 Section 6672 Penalty-2025

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The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on: The unpaid income taxes withheld, plus. The employees portion of the withheld FICA taxes.
6672 Failure to collect and pay over tax, or attempt to evade or defeat tax. Share. Internal Revenue Code of 1986. SUBTITLE F -- PROCEDURE AND ADMINISTRATION. Chapter 68 -- Additions to the Tax, Additional Amounts, and Assessable Penalties.
The TFRP may be asserted against any person responsible for collecting, accounting for, and paying over trust fund tax who: willfully fails to collect such tax, or. fails to 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.
IRC 6672 is the authority for the TFRP. The TFRP is a penalty against any responsible person required to collect, account for, and pay over taxes held in trust who willfully fails to perform any of these activities.
Willfulness. In addition to being responsible, an individual must be deemed willful in their nonpayment before they can receive an IRS Trust Fund Recovery Penalty. Choosing to pay other bills while failing to remit trust fund taxes, for example, may be considered willful behavior.
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This rule generally prohibits the IRS from levying any assets that you placed into an irrevocable trust because you have relinquished control of them.
The Trust Fund Recovery Penalty is the penalty the IRS assesses when taxpayers dont pay payroll taxes withheld from their employees paychecks. The penalty is 100% of the withheld taxes, and the IRS can hold a variety of individuals accountable, not just businesses.
If you are a person responsible for withholding, accounting for, or depositing or paying specified taxes including NRA withholding and employment taxes, and willfully fail to do so, you can be held personally liable for a penalty equal to the full amount of the unpaid trust fund tax, plus interest.