- What it means
- The IRS has assessed the trust fund recovery penalty against you personally for employment taxes a business withheld but did not pay.
- Respond within
- 30 days from the date on the notice
- What to send
- Payment, a payment plan, or a written protest if you were not a responsible person or did not act willfully.
- Write it
- Reasonable cause statement
- When to get help
- Get representation now. This penalty is personal, equals the full trust fund amount, survives bankruptcy, and the appeal windows are short.
What the letter says
The business withheld income tax and FICA from employees and did not pay it over. The IRS has decided you were a responsible person who willfully failed to pay, and is assessing the unpaid trust fund portion against you individually.
Before this notice
There should have been a Letter 1153 proposing the penalty, with 60 days to protest. If you never received it, say so; the assessment may be reversible on that basis.
What to do
If the facts are wrong (you had no authority over payments, or you did not know), a written protest with evidence: bank signature cards, corporate records, who actually made payment decisions. If the facts are right, pay or set up a plan; the failure-to-pay penalty and interest run on this balance too.
What to gather
- The notice and any Letter 1153
- Corporate records showing your role and authority
- Bank signature cards
- Payroll and payment records for the periods
Write back
The Reasonable cause statement tool builds the response in the order the IRS reads it. Fill it in, review it, print it, and send it with copies of the documents above and the notice stub on top.
Before you send anything
This is general information, not tax advice. Situations differ. Check with your tax advisor before you send anything. Nothing on this page creates a client relationship.