Under guidance provided under Notice 2020-65, the responsibility of payment of the deferred amounts is placed on the shoulder of the employer. If the employer does not pay in the deferred amounts by April 30, 2021, they will be subject to interest and penalties, including the onerous “trust fund recovery penalty.” This responsibility still applies even if the employee’s pay is not sufficient enough to cover the deferred amount or if the employee is no longer working for the employer in 2021.
In addition, the “responsible party” rules allow the IRS to collect unpaid taxes from corporate officers, partnership members, employees, and other people responsible for collecting and depositing taxes withheld. Trust fund taxes are non-dischargeable in bankruptcy.
It is for these reasons and limited guidance available at this time that we do not recommend opting into the program at this time.
If you have any questions, please call our office – someone in our Tax Department will be able to help.