If you received an IRS letter 1153, Proposed Trust Fund Recovery Penalty Assessment, here is what you should know.
This IRS will send a 1153 letter via Certified Mail to your Last Known Address, which means the last address used on your tax filings, or updated otherwise with the IRS. This letter is related to business taxes only. So, if you are an owner, fiduciary, “officer,” check-signer, at a business that is behind on Form 941 (payroll) taxes you in the cross-hairs of a personal tax assessment because you are deemed a “responsible person.” When this occurs it is called a Trust Fund Recovery Penalty, in which you can be liable for the taxes withheld from employees paychecks but not paid to the IRS.
In order for the IRS to execute this Trust Fund Recovery Penalty, the responsible person must be deemed willful and also be given the opportunity to appeal the Proposed Trust Fund Recovery Penalty Assessment. This is where the Letter 1153 comes in, along with Form 2751, which will details the Trust Fund amount proposed.
In the event that you have received a Proposed Trust Fund Recovery Penalty Assessment, your next best step is probably talking to a licensed tax professional. Once the IRS assesses this tax they will pursue collections.