Yes. To encourage the prompt payment of withheld income and employment taxes, Congress passed a law that provides for the Trust Fund Recovery Penalty (also known as the TFRP or 100% penalty). The IRS may assess this penalty against anyone who is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and who willfully fails to collect or pay them. For willfulness to exist, the responsible person must have known about the unpaid taxes and have used the funds to keep the business going or allowed available funds to be paid to other creditors. This penalty may be applied whether or not the business is out of business.
Once this penalty is assessed against the individual responsible person or persons, the IRS will proceed with collection efforts against the individual. Individuals considered responsible persons include but are not limited to: owners, officers, directors, accountants and payroll clerks. Additionally, this penalty is assessed at 100% of the outstanding liability to each responsible person. For example, if $100,000 is owed and there are 10 responsible people, each responsible person is assessed $100,000 (not their proportionate share of $10,000 as you would expect).
Responsible individuals to whom the penalty is assessed are therefore joint and severably liable for the full amount. Therefore the IRS will pursue the responsible individuals who have assets to collect against, starting with the easiest to get first. It frequently occurs that the IRS collects the full penalty from one “wealthy” responsible individual, who is then left to sue the other responsible individuals to gain back his or her proportionate shares.
Additionally, the threshold for “willfulness” is very very low when it comes to payroll taxes. It is not uncommon for beneficial owners or directors of closely held corporations or small family businesses, who no longer participate in day to day operations, to find themselves facing a TFRP, because current management failed to make payroll tax deposits. http://getirshelptoday.com