Trust Fund Recovery Penalty
Learn the decision pattern the exam can test, then apply it to a realistic taxpayer fact pattern.
What changes the answer?
Job title alone does not establish responsibility, and willfulness does not require an intent to defraud.
A tax-practice scenario
A bookkeeper could sign checks while an owner directed payments to vendors instead of payroll taxes. Analyze each person's actual authority and knowledge.
Identify the taxpayer, entity, transaction, and tax period first. Write the controlling tests in order, apply only the relevant facts, and keep the reporting result separate from any planning recommendation.
Do not take this shortcut.
Treating corporate liability as automatic personal liability for every officer.
Turn the rule into recall.
Build a responsibility timeline from bank authority, decisions, duties, knowledge, and payment choices.
- ExplainState the governing distinction without notes.
- ApplyChange one fact in the scenario and predict the new result.
- RetrieveAnswer an unseen question, then review every option.
Official source and scope
This lesson follows the current PSI content outline and uses the IRS reference below for the underlying tax or practice framework. Always confirm current forms, instructions, thresholds, and effective dates before advising a taxpayer.