Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
What Are Trust Fund Taxes?
Trust fund taxes include:
- Federal income taxes
- Social Security taxes
- Medicare taxes
The employer withholds these taxes from the employee's GROSS pay. The employee's take-home pay is referred to as the employee's NET PAY. Withholding taxes are called trust fund taxes because employees are trusting their employer to withhold the appropriate taxes and proper amounts, and then, turn those taxes over to the U.S. Treasury by making Federal Tax Deposits (FTD).
If the appropriate taxes and amounts are not withheld, or, if they are withheld but not remitted to the United States Treasury, a harsh penalty may be imposed called the trust fund recovery penalty. Filing bankruptcy will not discharge trust fund taxes.
Trust Fund Recovery Penalty
If federal income taxes, Social Security taxes, or Medicare taxes that must be withheld (trust fund taxes) are not withheld or are not deposited or paid to the U.S. Treasury, the trust fund recovery penalty may apply. The penalty is 100% of the unpaid trust fund tax.
If these unpaid taxes can't be immediately collected from the employer or business, the trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, or paying over these taxes, and who acted willfully in not doing so. The trust fund recovery penalty won't apply to any amount of trust fund taxes an employer holds back in anticipation of any credits they are entitled to.
Who is Responsible For the Trust Fund Recovery Penalty?
The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to have acted willfully in not carrying out their responsibility for collecting, accounting for, and paying these taxes to the United States Treasury. Willfully means voluntarily, consciously, and intentionally. A responsible person acts willfully if he/she knows that the required actions are not taking place.
The IRS takes non compliance with the rules for handling trust fund taxes seriously. Consequently, the IRS can go beyond just the owners of a company in assigning liability. Other individuals within the organization may also find themselves liable for trust fund taxes.
Potential targets:
- An officer or employee of a corporation
- A partner or employee of a partnership
- An accountant
- A volunteer director/trustee
- An employee of a sole proprietorship
- A responsible person may also include one who signs checks for the business or otherwise has authority to cause the spending of business funds.
Caution! You may be charged with criminal penalties if you don't comply with the special bank deposit requirements for the special trust account for the U.S. Government.
The IRS may assess an "averaged" Failure-to-Deposit (FTD) penalty of 2% to 10% if you're a monthly schedule depositor and didn't properly complete Form 941, line 16, when your tax liability shown on Form 941, line 12, equaled or exceeded $2,500.
The IRS may also assess an "averaged" FTD penalty of 2% to 10% if you're a semiweekly schedule depositor and your tax liability shown on Form 941, line 12, equaled or exceeded $2,500 and you: Completed Form 941, line 16, instead of Schedule B (Form 941); failed to attach a properly completed Schedule B (Form 941); or improperly completed Schedule B (Form 941) by, for example, entering tax deposits instead of tax liabilities in the numbered spaces.