Employers that withhold taxes from employees but don’t pay them over to the IRS may face harsh penalties. The Trust Fund Recovery Penalty (TFRP) equals 100% of the unpaid tax. The TFRP can be assessed personally against responsible parties and may include prison time. One taxpayer who operated an ammunition manufacturing and sales business withheld federal taxes from his employees’ paychecks. A U.S. Dept. of Justice (DOJ) investigation showed that from 2013 to 2016 he failed to pay over withheld taxes of roughly $356,280. The taxpayer was charged a TFRP of $356,280 and was sentenced to 18 months in prison. Here’s the DOJ press release about the case: https://bit.ly/3NxQNM5
