Department of the Treasury 
            Internal Revenue Service 

Notice 784 
(Rev. June 2016) 

Could You be Personally Liable for 
Certain Unpaid Federal Taxes? 
If you are an employer, you must withhold federal income, 
social security (or railroad retirement), and Medicare taxes 
from your employees' wages or salaries. If you provide 
communication or air transportation services, you also may 
have to collect certain excise taxes from people who paid 
you for the services. (Get Publication 510 for more 
information on excise taxes.) These taxes are called trust 
fund taxes and must be paid to the Internal Revenue Service 
through electronic funds transfer of tax deposits or as 
payments made with the applicable returns. 
The trust fund recovery penalty. — If trust fund taxes are 
not collected, or not truthfully accounted for, or not paid, or  
are evaded or defeated in any way, we may impose a trust  
fund recovery penalty. This penalty is equal to the amount of 
the trust fund taxes evaded, not collected, not accounted for, 
or not paid to IRS. We also charge interest on the penalty. 
Who has to pay the penalty? — Any person responsible 
for collecting, accounting for, and paying trust fund taxes, 
and who acted willfully in not performing one or more of 
those responsibilities, can be liable for the trust fund 
recovery penalty. The IRS can collect the penalty from any 
responsible person or persons who acted willfully if the IRS 
can’t immediately collect the taxes from the employer or 
business. 
"Willfully" means voluntarily, consciously, and intentionally. A 
responsible person acts "willfully" if this person knows that 
the required actions are not taking place for any reason. 
Paying other business expenses instead of trust fund taxes, 
including the payment of net payroll, is considered willful 
behavior. 
                                            (Continued on back) 

www.IRS.gov                       Notice 784 (Rev. 6-2016) 
                                  Catalog Number 63994X 

Any person who had responsibility for certain aspects of the 
business and financial affairs of the employer (or business) 
may be a responsible person. A responsible person may be 
an officer or employee of a corporation, or a partner or 
employee of a partnership. This category may include 
accountants, trustees in bankruptcy, members of a board, 
banks, insurance companies, or sureties. The responsible 
person can even be another corporation, a volunteer 
director/trustee, or employee of a sole proprietorship. 
Responsible persons may include those who direct or have 
authority to direct the spending of business funds. 
If we charge you this penalty, we may take your assets 
(except exempt assets) to collect the amount owed. 
Many employers outsource some or all payroll duties to 
third-party payroll service providers (PSP). These providers 
help ensure compliance with the IRS filing and deposit 
requirements. In the event of default by a third party, the 
employer remains responsible for the deposit of the federal 
tax liabilities and timely filing of returns. Depending on the 
facts and circumstances, and the type of third-party 
arrangement, an employer who uses a third party to perform 
Federal employment tax functions on its behalf may remain 
solely liable for Federal employment taxes, or may become 
jointly and severally liable for such taxes. 
Avoid the penalty. —  You can avoid the trust fund recovery 
penalty by making sure that all taxes are collected, 
accounted for, and paid to IRS when required. Make your tax 
deposits and payments on time. IRS employees are 
available to assist you if you need information on tax 
deposits and payments. You may contact the IRS by phone 
toll-free at 800-829-4933 Monday through Friday during your 
local hours of 7 a.m. to 7 p.m. (Alaska and Hawaii follow 
Pacific Time). More information is available online at 
IRS.GOV searching under keywords “Trust Fund”, or 
searching under the “Forms & Pubs” tab for Notice 931, 
Deposit Requirements for Employment Taxes, Publication 
15, Employer's Tax Guide, Publication 3151, The ABCs of 
Federal Tax Deposits, and Form 941, Employer's Quarterly 
Federal Tax Return. 

                                  Notice 784 (Rev. 6-2016)