Employers that withhold taxes from employee wages but don’t pay them over to the IRS may face a penalty of 100% of the unpaid tax. The Trust Fund Recovery Penalty (TFRP) can be assessed personally against “responsible” parties. One corporate president and his then-wife (the corporate secretary) were assessed a TFRP of $146,682 for the unpaid corporate tax bill. After other remedies failed, the wife requested “innocent spouse” relief, which may be available to spouses who are separated or living apart, with respect to jointly filed tax returns. A U.S. Appeals Court denied the request because the TFRP didn’t arise from a joint income tax return. The TFRP was upheld. (Chavis, CA8, 6/15/22)
Our Blog 