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Abstract: 

Officers, owners, directors, and employees associated with companies that do not pay employment taxes can find themselves on the receiving end of a penalty from the IRS.1 The penalty is called the Trust Fund Recovery Penalty.2 Most financial institutions learn of the customer’s delinquencies when served with a subpoena for records from the IRS during its investigation. However, as detailed herein, there are circumstances when a financial institution’s customer’s failure to timely pay employment taxes may result in the financial institution itself becoming a target for recovery of the Trust Fund Recovery Penalty by the IRS.

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Affiliations:  1: Shook, Hardy & Bacon, LLP.