Trust fund taxes are employee withholding taxes and their share of FICA and Medicare taxes on salaries, withheld by the employer for each pay period and remitted to the government. This tax typically represents about 65% of the total payroll tax liability that employers pay to the government for each pay period, including taxes on Form 941 on a quarterly basis.

Failed business traps don't work

Businesses fail when operating cash flow is insufficient to meet monthly short-term obligations. As this trend continues over time, debt builds up and costs decrease to keep things going. Debts essential to running a business, such as utility bills and payroll, are paid, but taxes and other government accounts are usually not paid. Because if you don't pay the electricity bill, the electricity will go out and you won't be working the next day. Like wages, skilled workers will also leave and be shut down. You have enough money to pay your net salary each month to keep your employees happy. One of the first things you need to do is payroll taxes, another tax bill the government imposes on small businesses that can be a significant monthly expense.

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Since you have built this business from scratch, you believe that things will change over time and as your sales increase your problem will be solved. Help is inevitable and you borrow money to cover your net salary and other important business expenses until your loan expires. Unfortunately, almost every company that has not paid wages taxes has a sad story. The most important thing a business owner can do in this situation is realize that what you are doing is not working and you are in quicksand. You need a financial professional to advise you on what to do to survive.

Section 6672 Penalty Fund for Collection of Sanctions
As a business owner, you create this separate business entity to protect you from personal liability (corporate veil) and you would not think that you could be personally liable for payroll taxes. Something went wrong and the business you invested in failed.

Enter the IRS Revenue Officer who will ruin your life. Any person who can be considered a responsible person who acts intentionally may face personal sanctions for foreclosure of the trust fund. This civil penalty rating under Section 6672 of the IRC is a 100% personal liability penalty. The next thing you know is that the IRS sent you a letter asking you to pay taxes from the company's trust fund plus penalties and interest. If you fail to pay, you will be debited and your bank account may be withdrawn. Incidentally, this civil law sanction cannot be revoked in the bankruptcy process. If five responsible persons are identified by the IRS, each of them will be awarded a 100% penalty. The IRS doesn't care, they just want their money. Also, foreclosure prevents anyone from taking out a loan to borrow money to pay off company debt, you will die in the water.