Trust Fund Recovery Penalty Estimator
Last updated · Reviewed for accuracy against IRS.gov guidance
The Trust Fund Recovery Penalty equals the unpaid income tax withheld from employees plus the employees' 7.65% share of Social Security and Medicare. It does not include the employer's share, penalties or interest. Enter withholding and wages for the unpaid periods to estimate personal exposure.
Educational estimate. The IRS decides responsibility and willfulness case by case; this doesn't say whether you'd be assessed.
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Get a free reviewHow the IRS figures the amount
The IRS describes the TFRP as equal to the unpaid trust fund taxes. Those are the amounts withheld from employees' wages that the business held for the government. The authority is IRC 6672, and the IRS procedures are in IRM 5.7.4.
Reducing personal exposure
If the business can pay something, designating voluntary payments to the trust fund portion lowers what can shift to you personally. If you receive Letter 1153, the 60-day appeal window matters. The free business tax relief assessment flags TFRP risk.
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Start the calculatorFrequently asked questions
What does the Trust Fund Recovery Penalty include?
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Only the trust fund portion of unpaid employment taxes: federal income tax withheld from employees' pay and the employees' share of Social Security and Medicare. It doesn't include the employer's matching share, penalties or interest.
Who can be charged the TFRP?
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Under IRC 6672, any person responsible for collecting, accounting for and paying the taxes who willfully failed to do so — owners, officers, bookkeepers or others with authority over which bills get paid.
Can more than one person be assessed?
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Yes. The IRS can assess the full penalty against each responsible person, but it collects the tax only once in total.
Do designated payments reduce the TFRP?
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A voluntary payment can be designated to the trust fund portion, which reduces the amount that could be assessed personally. Involuntary payments such as levies are applied as the IRS chooses.
What notice starts the TFRP?
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Letter 1153 proposes the assessment and gives 60 days (75 if addressed outside the U.S.) to appeal.
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TaxSettlementCalculator.com is not a tax firm, law firm, CPA, or government agency and is not affiliated with the IRS or any state tax agency. Estimates are for educational purposes only and are not tax, legal, or financial advice. Results vary based on individual circumstances, and no outcome is guaranteed. We connect users with independent tax relief professionals.