When a business does not pay over withheld employment taxes, IRC 6672 lets the IRS assess a penalty equal to the unpaid trust fund taxes against responsible persons who acted willfully. That makes a business debt personal.
Responsible and willful
Responsibility is about authority over which bills get paid. Willfulness in this civil penalty is not the same standard as in a criminal case, but the facts overlap.
The 60-day notice
IRC 6672(b) requires the IRS to send a preliminary notice at least 60 days before notice and demand for the penalty. That notice is when you can dispute the proposed assessment.
The criminal version
Willful failure to collect or pay over tax is also a felony under IRC 7202. See the section 7202 guide.
General information only, not legal advice. Reading this page does not create an attorney-client relationship. Laws and IRS procedures change; the sources cited were reviewed on the date shown above.