A business owner who has not paid the payroll taxes of his employees will usually have the trust fund penalty assessed against him, making him personally liable for the federal taxes withheld. Most trust fund cases are not criminal because the IRS recognizes that the employer failed to pay the taxes simply because he did not have enough income to pay all the bills. However, if the IRS determines that he willfully chose not to pay the taxes (e.g. to convert the money to his own use) then IRC Sec. 7202 makes such action a felony with criminal penalties. One can still be prosecuted even if he later pays the taxes after the IRS files the charges. Therefore, one needs to be proactive in providing reasons for the failure to pay before charges are actually filed and an arrest is made.