Penalties for failure to pay the tax

There is a host of civil penalties for negligent or inadvertent failure to make proper or timely payments and deposits of employment taxes. For any willful failure to withhold or pay employment taxes, both civil penalties and criminal sanctions may apply. Perhaps the most commonly encountered civil penalty is the Trust Fund Recovery Penalty. This penalty is really a collection device, in that it is equal to 100% of trust fund taxes that have not been remitted to the Internal Revenue Service. Under this penalty, a “responsible person” can be held fully responsible for any willful failure to collect and pay trust fund taxes.

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