Employer had several lump sum distributions that were processed by their investment firm. Investment firm sent entire balance to participant and did not withhold any taxes.

Obviously, in preparing the 1099-R's we would need to show "0" tax withholding, but my question is -

Is the employer required to withhold taxes from the distributions? Meaning, if they do not withhold anything are they on the hook for anything?

Thanks,

Ronnie

I believe this falls under the "trust fund recovery"penalty under IRC 6672. But I also think the penalties can generally be waived if the liability is actually paid by the recipient, but I don't know the details, procedure, or the required timeframe.