---
title: What Is the Trust Fund Recovery Penalty? | TaxTruce
url: https://taxtruce.com/answers/what-is-the-trust-fund-recovery-penalty
updated: 2026-10-29
---

# What is the trust fund recovery penalty?

Updated October 8, 20261 sourceTaxTruce team[Fact checked](/editorial-standards)

The short answer

It is a penalty equal to unpaid trust fund taxes, the income tax and worker's share of Social Security and Medicare a business held back. It is charged to the people responsible. The IRS sends a letter first. You have 60 days to appeal.

## Words to know

[Trust fund taxes](/glossary)
:   Taxes a business holds back from workers' pay, like income tax and the worker's share of Social Security and Medicare.

## Sources

1. [IRS: Employment taxes and the Trust Fund Recovery Penalty](https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp)

Run the numbers with our [free tax tools](/tools), like the penalty and payment plan math.