Need help understanding IRS trust fund penalty.?

Question

1. If 2 people qualify for at trust fund penalty, do they both get penalized for the full amount?
2. Do the penalties have to be paid for in after tax dollars

Answer 1

1. The penalty should be collectible only once, and federal law gives the person from whom the penalty is collected a right of contribution from others who are liable for the penalty. IRC sec. 6672.

2. The penalties are not deductible, so yes, they are paid in after-tax dollars. IRC sec. 162(f).

This information is general in nature and your situation may require a different answer. You really should see an attorney if you are raising questions like this.

Answer 2

Yes and Yes.

Each person is fully liable for the penalty but the penalty can only be collected once from both or either of the debtors.