TFRP Success Stories
Trust Fund Penalties. Personal Liability. Defeated.
Real cases of business owners who faced IRS Trust Fund Recovery Penalty assessments — personal liability for their company's withheld payroll taxes. Every case resolved, every personal asset protected.
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Ohio Construction Company — $210K TFRP Reduced to $0
Situation
Construction company owner with 8 quarters of unpaid payroll taxes. IRS assessed $210,000 TFRP against him personally. He had paid suppliers to keep jobs going, believing the payroll company was handling tax deposits.
IRS TFRP Assessment
$210,000 TFRP assessment
Defense Strategy
Challenged willfulness element — demonstrated that the owner relied on a third-party payroll provider who failed to remit deposits, and that the owner had no actual knowledge the deposits weren't being made. Presented payroll provider contracts, bank records showing full payroll amounts transferred, and correspondence with the provider.
Outcome
IRS Appeals determined the owner was not willful in failing to pay — the payroll provider's failure was the proximate cause. TFRP assessment reversed entirely. The business portion of the payroll tax was resolved through an IA. Owner's personal assets protected.
Key Lesson
Third-party payroll provider failure is a recognized defense to willfulness — but only if you can prove you delegated the responsibility AND had no actual knowledge of the non-payment. Documentation is everything in TFRP cases.
Georgia Restaurant Group — $320K TFRP Settled for $45K
Situation
Multi-location restaurant group with 12 quarters of trust fund exposure. Three owners assessed. Two had check-signing authority; one was a silent investor with no operational role.
IRS TFRP Assessment
$320,000 (assessed against all three owners jointly)
Defense Strategy
First: removed the silent investor — demonstrated he had no signatory authority, no control over bill payment, and no involvement in financial decisions. Second: negotiated an OIC for the two remaining responsible persons based on limited personal assets and modest income.
Outcome
Silent investor removed from TFRP entirely. Remaining two owners settled for $45,000 total through OIC-DATC based on their RCP. Business restructured payroll processing with mandatory dual-signatory controls and automated EFTPS verification.
Key Lesson
Not every owner is a responsible person under TFRP rules. The test is actual authority over financial decisions, not ownership percentage. A passive investor with no check-signing authority or bill-payment control is often not a responsible person.
Texas Trucking Company — $175K TFRP with Active Levy
Situation
Owner-operator of a small trucking company. IRS assessed $175,000 TFRP and levied his personal bank account — the one he used to pay his mortgage and family expenses.
IRS TFRP Assessment
$175,000
Defense Strategy
Emergency hardship release on the bank levy (proving the levy prevented basic living expenses). Then: negotiated a Partial-Pay Installment Agreement for the TFRP balance based on the owner's limited personal income and assets — the business itself had been closed, so future income was limited.
Outcome
Levy released within 2 days. PPIA approved at $500/month for 72 months, with remaining balance to expire with CSED. Owner protected his home from lien enforcement by demonstrating it was his primary residence with limited equity.
Key Lesson
The TFRP follows the individual, not the closed business. Even after closing a business, the personal liability remains. But if your personal finances are limited, resolution options still exist — including PPIA, CNC, and OIC.
IRS Targeting Your Personal Assets? We Fight TFRP Assessments.
The TFRP makes business owners personally liable for payroll taxes. Every case above was won by challenging the IRS's determination of who was responsible and willful. We know these defenses.