§7501 — Liability for taxes withheld or collected
25 cases·3 followed·1 overruled·21 cited—12% support
Statute Text — 26 U.S.C. §7501
Whenever any person is required to collect or withhold any internal revenue tax from any other person and to pay over such tax to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the same provisions and limitations (including penalties) as are applicable with respect to the taxes from which such fund arose.
For penalties applicable to violations of this section, see sections 6672 and 7202.
25 Citing Cases
may constitute reasonable cause for nonpayment of income taxes may not constitute reasonable cause for failure to pay over taxes described in section 7501 that are collected or withheld from any other person.”).
Commissioner, 144 T.C. at 46. Thus, the withheld taxes are referred to as "trust fund taxes". Pollock v. Commissioner, 132 T.C. at 25 n.10. The employer is liable to the government for the payment ofamounts required to be withheld. Sec. 3102(b) (FICA tax); sec. 3403 (income tax). Ifan employer fails to withhold the amounts require
The term "trust-fund taxes" is used to describe these withheld taxes. See Weber v. Commissioner, 138 T.C. 348, 357-359 (2012); Pollock v. Commissioner, 132 T.C. 21, 25 n.10 (2009). Under section 6672, a person responsible for collecting and paying over trust-fund taxes who willfully fails to do so is personally liable for a TFRP equal to
Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986, as amended and in effect at all relevant times, and all Rule references are to the Tax Court Rules ofPractice and Procedure. Petitioner resided in New Jersey when he filed his petition. Background Petitioner is a licensed engineerwho has worked f
Contrary to petitioner's assertion that the "trust fund theory" is "embodied" in section 7501, we find that section 7501 neither explicitly nor implicitly prescribes a hierarchy for application of payments to trust fund and non- trust-fund taxes.
for the United States under section 7501(&) .' Slcdov v .