Form 843 Basics 2024-2025

Thank you for joining us. We are conducting the trust fund recovery penalty basics course. In this course, we will cover various aspects of trust fund recovery penalty basics, compliance issues, concerns, recent efforts, and new strategies for defense. We will also discuss unfiled and unpaid employment tax issues for employers. Despite the seemingly unrelated strategies, we will explore how they can help eliminate or prevent trust fund recovery penalty risks. To start, it is important to understand what trust fund recovery penalties entail. The IRS and the Department of Justice are deeply concerned as more than seventy percent of all revenues collected by the Treasury comes from employment taxes, with about one-third of that being Medicare and unemployment taxes. If a significant portion of these taxes is left unpaid, it contributes to what is referred to as the tax gap - the difference between what should be paid versus what is actually collected by the Treasury. As of April 2016, the tax gap amounted to $458 billion, with more than $59 billion remaining unpaid in unemployment tax returns alone. The underreporting gap for FICA and employment tax is $15 billion. These figures have made it a top priority for the government to pursue criminal and civil penalties against non-compliant employers. In a report released by the taxpayer advocate office, it was revealed that between 2010 and 2013, an average of $4.2 billion per year in trust fund tax debts is uncollectible. This amounts to roughly one and a half times the amount collected on those debts. Recognizing the need for early intervention, the IRS has conducted research to determine the best course of action. As a result, they have introduced new initiatives, such as working with third-party collection agencies to help recover old debts. Before diving deeper, let's define trust...