Bank Statement for a Trust Fund Recovery Penalty

The Trust Fund Recovery Penalty (TFRP) makes individuals personally liable for a business's unpaid withheld payroll taxes when they were responsible and acted willfully. Bank statements are central to a TFRP case — the IRS reviews who had check-signing authority and which bills were paid instead of the taxes. This guide covers what the statements reveal.

Key Benefits

How It Works

  1. Step 1: Gather the business bank statements for the periods payroll taxes went unpaid
  2. Step 2: Convert them to Excel with Bank Statement Converter to see payment patterns clearly
  3. Step 3: Identify who signed checks and which payments were prioritized over the IRS
  4. Step 4: Provide the organized records to your tax attorney before the Form 4180 interview

Frequently Asked Questions

What is the Trust Fund Recovery Penalty?
A penalty equal to the unpaid trust fund portion of payroll taxes (the withheld income tax and employee FICA) that the IRS can assess personally against responsible individuals when a business fails to remit them.
How do bank statements affect a TFRP determination?
They show who controlled the money and which payments were made instead of the payroll taxes — the two questions (responsibility and willfulness) that decide personal liability.
Can more than one person be liable for the TFRP?
Yes — the IRS can assess the penalty against every responsible person who willfully failed to pay, though it only collects the trust fund amount once in total.
How can I defend against a TFRP assessment?
Bank statements and payroll records showing you lacked signing authority, control, or knowledge of the nonpayment are the strongest evidence you weren't a responsible or willful party.
Convert Your TFRP Case Statements