I just wrote a blog post about incorporating and if it will relieve a business owner of unpaid employment taxes. It included debunking some ideas about payroll. This was one of the myths. Read the entire blog post, but here’s my answer to this question.
The trust fund recovery penalty is only for the taxes that were withheld from the employee’s payroll. That portion of the employment taxes that the corporation is required to pay is dischargeable in bankruptcy of the corporation or LLC. You will not be held personally liable, period. Further, the trust fund recovery penalty is only for responsible parties as defined by the IRS and the courts.