Who is a responsible person under §6672?

Whoever had the power to see payroll taxes paid — owners, officers, bookkeepers, even investors who ran the money. Title doesn’t decide; check-signing authority, hiring power, and control over which bills got paid do.

What does willful mean for the TFRP?

Knowing the taxes were unpaid and paying other creditors anyway — or recklessly disregarding the risk. No evil motive required. Paying the landlord while the 941 balance sat is the textbook fact pattern.

Can I appeal a Trust Fund Recovery Penalty?

Yes — Letter 1155 gives 60 days to file a protest and take the case to Appeals, where most TFRP fights are won or lost on the responsibility and willfulness facts. Miss the 60 days and the assessment stands.

IRC §6672 · 26 U.S.C. §6672

IRC §6672: Trust Fund Recovery Penalty

By Paul D. Diaz, EA, MBA · Updated September 20, 2026

IRC §6672 is the Trust Fund Recovery Penalty — the 100% personal assessment against responsible persons who willfully fail to collect or pay over payroll taxes. The business owes it; the IRS collects it from you.

What it governs

100% of the unpaid trust-fund taxes — income tax and employee FICA withheld
Responsible person means function over title: check-signing, hiring, bill-paying authority
Willfulness means knew or recklessly disregarded — paying other creditors instead counts
Assessed via Letter 1155 with 60 days to protest; generally not dischargeable

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Questions this section answers

Who is a responsible person under §6672?: Whoever had the power to see payroll taxes paid — owners, officers, bookkeepers, even investors who ran the money. Title doesn’t decide; check-signing authority, hiring power, and control over which bills got paid do.
What does willful mean for the TFRP?: Knowing the taxes were unpaid and paying other creditors anyway — or recklessly disregarding the risk. No evil motive required. Paying the landlord while the 941 balance sat is the textbook fact pattern.
Can I appeal a Trust Fund Recovery Penalty?: Yes — Letter 1155 gives 60 days to file a protest and take the case to Appeals, where most TFRP fights are won or lost on the responsibility and willfulness facts. Miss the 60 days and the assessment stands.

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