Segal, Cohen & Landis, P.C.
Defend Against Personal Liability for Payroll Tax Debt
IRS tax attorneys — Beverly Hills, CA. National representation.
The Trust Fund Recovery Penalty (TFRP) is one of the most dangerous and misunderstood IRS enforcement tools. When a business fails to remit payroll taxes — the employee withholding portion of FICA and income taxes — the IRS can hold any responsible person personally liable for 100% of the unpaid amount.
The IRS casts a wide net. Officers, shareholders, bookkeepers, accountants, and anyone who had authority over the business finances can be targeted. At Segal, Cohen & Landis, our attorneys defend against TFRP assessments, challenge the designation of responsible person status, and negotiate resolutions that protect our clients from personal financial destruction.
How We Help
Our Approach to Trust Fund Recovery Penalty Defense
Responsible Person Challenge
The IRS must prove that you were a responsible person who willfully failed to pay trust fund taxes. We investigate the facts — who had check-signing authority, who controlled financial decisions, what your actual role was — and build a legal record challenging the IRS's designation if the facts support it.
Willfulness Defense
The IRS must also prove willfulness — that you knew taxes were owed and chose to pay other creditors first. If you were unaware of the delinquency, lacked authority, or had no knowledge of the tax liability, we document those facts and present them in your defense.
Assessment Interview Preparation
Before the TFRP is formally assessed, the IRS conducts Form 4180 interviews. We prepare you for every question, attend the interview with you, and prevent you from making statements that can later be used to justify the assessment.
Appeal and Collection Due Process
If the TFRP is assessed, you have 60 days to appeal. We file a formal protest, present the legal and factual basis for challenging the assessment, and represent you before the IRS Office of Appeals.
How It Works
The Resolution Process
Situation Analysis
We review the payroll tax delinquency, your role in the business, financial records, and the IRS's preliminary findings to assess your exposure and defense options.
Pre-Assessment Strategy
Before the TFRP is formally assessed, there is a window to present evidence to the Revenue Officer. We gather documentation, prepare legal arguments, and communicate with the IRS to prevent or minimize the assessment.
Appeal Filing
If assessed, we file a timely protest with the IRS Office of Appeals with a complete legal brief. Appeals officers have authority to reduce or abate the penalty if facts support it.
Resolution
If the TFRP stands, we evaluate payment options — installment agreement, offer in compromise, or currently not collectible status — to protect remaining assets while resolving the liability.
Ready to Resolve Your Tax Problem?
Our attorneys have helped thousands of clients resolve IRS matters. Your consultation is free and confidential.
Common Questions
Frequently Asked Questions
Who can be held personally liable under the TFRP?+
Anyone who the IRS determines was a responsible person — typically officers, directors, shareholders who controlled finances, and employees with check-signing authority. The IRS can assess the same penalty against multiple individuals for the same debt.
What is the penalty amount?+
The TFRP equals 100% of the unpaid trust fund taxes — the employee withholding portion of federal payroll taxes (income tax withheld plus the employee's share of FICA). The employer's matching FICA share is not included.
Can I be assessed TFRP even if the company is bankrupt?+
Yes. The TFRP survives corporate bankruptcy and is assessed against individuals personally. It cannot be discharged in personal bankruptcy either.
Related Tax Services
Further reading
Beverly Hills · Los Angeles · National
Segal, Cohen & Landis, P.C.
9100 Wilshire Boulevard, 601 East Tower, Beverly Hills, CA 90212
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