TRUST FUND TAXES
Trust fund taxes are taxes withheld from others to be paid to a taxing authority. They include income and payroll taxes withheld from employees, and state sales taxes collected from customers. Section 6672 of the Internal Revenue Tax Code provides that the responsible officers of a taxpayer is personally liable for any taxes that should have been withheld from employees and paid over to the IRS. If you are in the position of making spending decisions for a failing business, early planning is important to limit trust fund liability. This is not something that should be done without competent and disinterested advice. Trust fund liability cannot be discharged in bankruptcy.