Many small businesses are unable to pay their payroll taxes for various reasons. Often, they do not have enough money to pay all of their bills. If they do not pay their rent, they will get evicted. If they do not pay their utilities, they will be shut off. If they do not pay their vendors or suppliers, they will not be able to do business. If they do not pay their employees, they will quit. The easiest creditor not to pay is the IRS because they do not have their hand out at the end of the week. Of course, the IRS believes they should be first in line, so if they do not get paid, they come back with a vengeance, levying bank accounts, credit card processors, and accounts receivables.
If the business is a corporation, it is responsible for all of the income taxes, Social Security, and Medicare withheld from their employees. They are also liable for the Social Security and Medicare that the company must match.
The money that is withheld from employees is held in trust for the IRS. When it is not paid, the government looks to the person or persons who were responsible for turning it over to the IRS and willfully failed to do so. Even though no one actually pocketed the money, the IRS looks at this as stealing and holds one or more persons liable. This amount accounts for about 65% of the total payroll taxes owed.
If the business closes and has no assets, the total payroll tax goes away. What remains is the Trust Fund Recovery Penalty, which is individually owed. As such, when the taxpayer has additional money to pay, that is where we want to designate the payments.