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Understanding Delinquent Taxes and Trust Fund Recovery Penalties

Understanding Delinquent Taxes and Trust Fund Recovery Penalties

Delinquent Taxes: The Consequence of Missed Payments

When individuals or corporations fail to pay their taxes by the due date, the taxes become delinquent. This triggers the imposition of penalties, compounding the financial burden. 

The state tax commission is vested with the authority to collect all delinquent taxes, necessitating prompt attention to avoid further complications.

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Delinquency in Corporate Tax Withholdings

For companies, failure to pay income tax withholdings results in the taxes becoming delinquent. This situation can lead to additional challenges, as the state tax commission pursues the collection of overdue taxes.
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Trust Fund Recovery Penalties: A Ramification of Delinquency

Delinquent employee income taxes can incur trust fund recovery penalties. These penalties are a consequence of unpaid taxes and require strategic resolution. 

If you find yourself grappling with trust fund penalties or seeking abatement, our experts are here to provide assistance.

FAQs

TFRP are penalties imposed on individuals responsible for withholding, accounting for, and depositing employment taxes, who willfully fail to do so.
Individuals in a business who have a duty to collect, account for, and pay withheld income and employment taxes.
Willful means intentionally disregarding the law or being plainly indifferent to tax obligations.

It's equal to the unpaid balance of the trust fund tax the business was responsible for depositing.

It's equal to the unpaid balance of the trust fund tax the business was responsible for depositing.

Yes, individuals have the right to appeal the decision before the penalty is assessed.
Interest is not applied to the TFRP itself, but interest on unpaid employment taxes continues to accrue.
No, TFRP cannot be discharged in bankruptcy.
The IRS can take collection actions, including liens and levies on personal assets.

Important Terms To Know

Seeking Relief: Trust Fund Penalty and Abatement Assistance

If you are facing challenges with trust fund penalties or require trust fund recovery penalty abatement, don’t hesitate to reach out. For comprehensive assistance with delinquent taxes and trust fund recovery penalties, contact us today. 

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