Getting A Co-Responsible Person To Pay Their Share Of The Trust Fund Recovery Penalty, by Frank Agostino, Esq. and Inhyuk Yoo Esq.
Section 6672 of the Internal Revenue Code (“Code”) allows the Internal Revenue Service (“IRS”) to assess the trust fund portion of an employment tax liability against those persons or entities responsible for collecting and paying the taxes on behalf of the business (i.e., “Responsible Persons”). The IRS calls the liability created by Section 6672(a) the trust fund recovery penalty (the “Penalty”). Responsible Persons are jointly and severally liable for the Penalty. This means the IRS can collect the Penalty from one responsible per- son while allowing others also responsible to pay nothing. Section 6672(d) – “Right of contribution where more than 1 person liable for penalty” allows a person who paid the Penalty to go after other Responsible Persons to recover the amount paid over his or her proportionate share. This article reviews Section 6672 (d) and suggests ways to incorporate Section 6672(d) into your tax controversy practice.
Cash is still king. Recent studies confirm that cash remains the most used payment method of any available. Taxpayers regularly pay service providers (e.g., housekeepers, house cleaners, babysitters, gardeners, repair people, plumbers, and contractors) and their “ordinary and necessary” business expenses, in cash.