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Making You Pay: When payroll taxes go unpaid, the IRS can hold it's owners, managers, and bookkeepers friendly. The IRS transfers corporation payroll obligation to individuals and blames them because of not making the payroll repayments. This is called the "Trust Fund Recovery Penalty" (TFRP). This applies mostly to incorporated businesses, but when your small business was an LLC, partnership, or sole proprietorship, it's totally be found responsible for payroll taxes without the TFRP provision. The penalty equals the required taxes owed, that makes it also referred to as 100% Payroll Penalty (Internal Revenue Code 6672).

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