§7512 Separate Accounting for Certain Collected Taxes, Etc.

Summary

If a person who must collect taxes under subtitle C or chapter 33 fails to collect, report, deposit, or pay those taxes as required, and someone hand-delivers a notice telling them about that failure, special rules start to apply. For a corporation, partnership, or trust, giving the notice by hand to an officer, partner, or trustee counts as giving notice to the whole business and its people. After that notice, the person must collect any such taxes that become due and, no later than the end of the second banking day after collecting them, put them into a separate bank account (a bank as the law defines it). They must keep the money in that separate account until it is paid to the United States, and the account must be treated as a special trust fund for the United States. The Secretary can cancel the notice later if convinced the taxes will be handled correctly going forward; the cancellation takes effect when the Secretary says.