Employment taxes withheld from employees are held in trust for the United States. Section 6672 permits the government to assess the unpaid trust-fund portion personally against qualifying individuals connected to the business.
What the authority does
A person required to collect, truthfully account for, and pay over a covered tax who willfully fails to do so may be liable for a penalty equal to the unpaid trust-fund amount. Responsibility and willfulness are distinct elements.
Why it matters in a tax controversy
Bank signature authority, control over disbursements, payroll decisions, tax knowledge, creditor preferences, role changes, lender control, bookkeeping access, and efforts to correct nonpayment can all matter. The Form 4180 interview and proposed-assessment letter should be prepared for as evidentiary events.
What it does not answer by itself
Section 6672 generally addresses the trust-fund component, not every employer-side tax, penalty, and interest charged to the company. Payment by one liable person affects the collectible trust-fund amount, but assessments may be pursued against multiple responsible persons.
Research and case checkpoints
- Separate trust-fund amounts from the employer's full payroll-tax balance.
- Map actual authority and payment control for each quarter.
- Identify when each person learned of the unpaid taxes and what payments followed.
- Protect the administrative protest and later refund-litigation paths.
Primary and official sources
Currency note: Check the current text, amendment history, effective date, and the version governing the tax period or agency action before relying on this summary.