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One thing that many small business owners do not realize is that if their company does not pay its employment taxes, they can be held individually liable for a significant portion of the unpaid taxes. This assessment is called the Trust Fund Recovery Penalty. While the company’s liability will essentially be forgotten when the business ceases operations, this personal liability will continue to exist, and must be paid, even after the business is closed. I will discuss the circumstances in which the Trust Fund Recovery Penalty can be assessed, and what individuals should do if they think they will, or already have been assessed.
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