Orlando Trust Fund Recovery Penalty Attorney

Knowledgeable Trust Fund Recovery Penalty Lawyer in Orlando, FL

If you have been notified that you are responsible for a trust fund recovery penalty by the Internal Revenue Service (IRS), this is a serious situation. It means you could be held personally liable for the entire unpaid payroll tax deposit. When you work with an Orlando trust fund recovery penalty attorney, they can determine how to minimize the consequences on your life and finances.

Find a Dedicated Orlando Trust Fund Recovery Penalty Lawyer at TaxSmith, LLC

For over a decade, TaxSmith, LLC, has worked in tax law and negotiated with the IRS. A trust fund recovery penalty (TFRP) should be taken seriously, but there may be options to appeal the penalty, avoid liability, or settle the debt you owe. Our firm can review these options to determine which is right in your unique case. We offer transparent and clear legal advice to demystify trust fund recovery laws and help you make reasoned decisions.

Matter Types We Handle in Orlando, FL

What Are Trust Fund Taxes?

“Trust fund tax” is the term given to taxes that an employer withholds from employee paychecks. These taxes can include:

1. Federal Insurance Contributions Act (FICA) taxes, including the employee half of Medicare and Social Security taxes
2. Railroad retirement taxes
3. Collected excise taxes
4. Employee federal income taxes

They are called “trust fund taxes” because the employer holds the withheld funds in a trust until they make a deposit to the IRS. Those funds cannot be used anywhere else.

The Basics of the Trust Fund Recovery Penalty in Orlando

A TFRP is assessed if trust fund employment taxes are not accounted for, collected, and paid on time. It can be assessed against all parties who are responsible for paying the tax, holding them personally liable for the unpaid amount. The TFRP is a severe penalty to encourage compliance with depositing these taxes on time and accurately.

The IRS assessed 255,990 non-return penalties in Fiscal Year 2025, which included TFRPs. If you are assessed a TFRP and do nothing, you could face collection actions against your personal assets and property. You need to act quickly if you are made aware that you owe the IRS a TFRP. After receiving notice, you have 60 days to file an appeal of the agency’s decision.

Who Can Be Held Responsible for the Trust Fund Recovery Penalty?

Someone could be held liable for a business’s failure to pay trust fund taxes and be assessed the TFRP if:

1. They were responsible for withholding, accounting for, and paying the tax.
2. They willfully failed to withhold, account for, and pay the tax.

“Willfully failing” means that you acted consciously, voluntarily, and on purpose. You are considered willful if you:

1. Were aware of the taxes that were owed or reasonably should have been aware of them.
2. Were indifferent to the responsibilities of paying the tax or intentionally failed to pay it.

How Can You Address a Trust Fund Recovery Penalty?

Ideally, you avoid a TFRP entirely by making sure all payroll taxes are collected, accounted for, and paid. If you are already dealing with trust fund recovery penalty charges, there are several potential options:

1. You could prove that you are not considered a responsible party, as you did not have control over or any responsibility to pay the tax and, therefore, should not be held liable for the tax.
2. You could prove that you did not willfully fail to collect and pay the tax.
3. The IRS’s actions to assess or collect the tax fall outside the statute expiration date, so it cannot assess or collect the tax as a result.

If these are not options, there may be ways to negotiate the debt. Business taxes are substantial and likely much more than you can afford. You could secure a debt settlement, like a payment plan or offer in compromise, to address the debt and avoid the majority of collection actions.

It’s important to hire a trust fund recovery penalty attorney to assess how you can appeal the IRS’s decision or negotiate the debt. A skilled TFRP lawyer can provide experienced tax resolution services. For instance, they can represent you in negotiations with the IRS, such as at an IRS Taxpayer Assistance Center (TAC) office. In Orlando, there is a TAC office downtown in Suite #1118 at 201 S. Orange Avenue.

FAQs About Orlando, FL Trust Fund Recovery Penalty Law

What Is the Statute of Limitations on the Trust Fund Recovery Penalty?

The statute of limitations, called a statute expiration date, on the trust fund recovery penalty is ten years from the date the penalty was assessed, and there is a three-year statute expiration date to assess the tax from the date it was due. If either of these deadlines expired before the IRS assessed or collected the tax, you cannot be held liable. However, many specific situations can extend or pause the statute of limitations.

What Is a Trust Fund Recovery Penalty?

A trust fund recovery penalty is used to hold any parties who are responsible for collecting and paying trust fund payroll taxes liable if those taxes are not collected and paid. A TFRP is a serious type of penalty that can bypass the usual protections that a business provides, holding responsible parties personally liable. The penalty is also equal to the full amount that is unpaid.

How Do You Calculate a Trust Fund Recovery Penalty?

You can calculate a trust fund recovery penalty by calculating the trust fund tax, as it is the same amount. The trust fund tax generally includes the employee half of FICA taxes and their federal employment taxes, plus other legal deductions from employee paychecks. Unlike other IRS taxes, the TFRP is not a portion of the tax owed but the whole amount.

Who May Be Assessed for the Trust Fund Recovery Penalty?

Any employee or party could be assessed for the trust fund recovery penalty if they were responsible for collecting and paying the tax and willfully failed to complete those tasks. Willfulness involves knowing that the tax is owed and failing to collect and pay it because of intentional actions or indifference.

The parties that could be liable include:

• Business owners
• Directors
• Shareholders
• Corporate officers
• Board members
• Partners
• Employees
• Bookkeepers
• Third-party corporations

Hire a Trust Fund Recovery Penalty Attorney in Orlando

Reach out to TaxSmith, LLC, today to learn how you can address a TFRP.

Serving Orlando and Central Florida

Federal tax issues can threaten your personal finances, business operations, and long-term financial stability. Whether you’re under investigation for a Trust Fund Recovery Penalty or seeking Innocent Spouse Relief, navigating the IRS without experienced representation can be overwhelming. Tax Smith LLC helps taxpayers throughout Orlando resolve complex federal tax disputes while pursuing solutions that minimize financial burdens and protect their future.

Serving Orlando and communities throughout Central Florida, Tax Smith LLC focuses entirely on IRS tax controversy and resolution matters. The firm represents individuals and businesses facing Trust Fund Recovery Penalty investigations, Innocent Spouse Relief claims, IRS audits, penalty abatement matters, Offer in Compromise negotiations, and other federal tax disputes. Every client receives personalized representation designed to achieve the best possible outcome.

From businesses near Downtown Orlando and Lake Nona to taxpayers throughout Orange County and along Interstate 4, State Road 408, and Florida’s Turnpike, Tax Smith LLC understands the unique challenges facing Central Florida taxpayers. Whether you need an Orlando Trust Fund Recovery Penalty attorney or Orlando Innocent Spouse Relief attorney, experienced legal counsel can make the difference between ongoing IRS enforcement and securing meaningful tax relief.

Orlando, FL Trust Fund Recovery Penalty Law Additional Resources:

• Florida Employer Payroll Tax Obligations
• Independent Contractor vs. Employee Payroll Tax in Florida
• Trust Fund Recovery Penalty and Penalty Abatement
• What to Do When Facing a Payroll Tax Audit
• Penalties for Non-Payment of Payroll Taxes