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US Internal Revenue Code - 26 USC 6672 Failure to Collect and Pay Over Tax, or Attempt to Evade or Defeat Tax (Trust Fund Recovery Penalty)

26 USC 6672 is the Internal Revenue Code provision that imposes the Trust Fund Recovery Penalty (TFRP) personally on responsible persons who willfully…

What US Internal Revenue Code - 26 USC 6672 Failure to Collect and Pay Over Tax, or Attempt to Evade or Defeat Tax (Trust Fund Recovery Penalty) requires

26 USC 6672 is the Internal Revenue Code provision that imposes the Trust Fund Recovery Penalty (TFRP) personally on responsible persons who willfully fail to collect, account for, and pay over trust fund taxes. Subsection (a) provides that any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable. Subsection (b) provides the preliminary notice requirement: no penalty shall be imposed under subsection (a) unless the Secretary notifies the taxpayer in writing by mail to an address as determined under section 6212(b) or in person that the taxpayer shall be subject to an assessment of such penalty. The notice must precede any notice and demand of any penalty under subsection (a) by at least 60 days. The assessment period extends 90 days after the date on which such notice was mailed or delivered in person, or, if there is a timely protest, until the date 30 days after the Secretary makes a final administrative determination with respect to such protest. Subsection (c) provides for extension by claim and bond: a person against whom the penalty is assessed may file a claim for refund and furnish bond within 30 days, preventing collection proceedings during that period; if the claim is denied, suit must be filed within 30 days in federal district court or the Court of Federal Claims. Subsection (d) provides a right of contribution: if more than one person is liable for the penalty under subsection (a), each person who paid such penalty shall be entitled to recover from other persons who are liable for such penalty an amount equal to the excess of the amount paid by such person over such person's proportionate share of the penalty. Subsection (e) provides an exception for voluntary unpaid members of boards of trustees or directors of tax-exempt organizations who serve in an honorary capacity, do not participate in day-to-day or financial operations, and have no actual knowledge of the failure on which the penalty is imposed — unless the exception would result in no person being liable.

Pillar: Tax & Transfer Pricing · Authority: US Congress / Internal Revenue Service / Department of Justice Tax Division · Version: 1.0.0 · Last updated:

Primary source: https://www.govinfo.gov/link/uscode/26/6672

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Primary Citations — 13 traced to source

  • 26 USC 6672 - Failure to collect and pay over tax, or attempt to evade or defeat tax - statutory text at https://www.govinfo.gov/link/uscode/26/6672
  • 26 USC 6672(a) - any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to do so, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over

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