Collection of Employment Taxes – Info for Employers (Part IV):
Trust Fund Recovery Penalty
The Trust Fund Recovery Penalty is a penalty that is assessed personally against the individual or individuals who were responsible for paying the trust fund taxes, but who willfully did not do so. The amount of the penalty is equal to the amount of the unpaid trust fund taxes. For additional information, please see Notice 784, Could You be Personally Liable for Certain Unpaid Federal Taxes? or visit www.irs.gov/TFRP.
If the Trust Fund Recovery Penalty is proposed against you, you’ll receive a Letter 1153 and Form 2751, Proposed Assessment of Trust Fund Recovery Penalty.
If you agree with the penalty, sign and return Form 2751 within 60 days from the date of the letter. To avoid the assessment of the Trust Fund Recovery Penalty, you may also pay the trust fund taxes personally.
If you disagree with the penalty, you have 10 days from the date of the letter to let the IRS know that you don’t agree with the proposed assessment, have additional information to support your case, or want to try to resolve the matter informally. If you can’t resolve the disagreement with them, you have 60 days from the date of the Letter 1153 to appeal with the Office of Appeals. For more information, see Publication 5, Your Appeal Rights and How to Prepare a Protest if You Don’t Agree.
If you don’t respond to the letter, the IRS will assess the penalty amount against you personally and begin the collection process to collect it. They may assess this penalty against a responsible person regardless of whether the company is still in business.
Next week: Past due tax returns
(IRS Publication 594 and IRS.gov) (TTT 11/12/19)