Proposed Trust Fund Assessment Protest and Appeal
Can I Protest the Assessment of the TFRP to Me Personally?Yes. Any taxpayer that receives Letter 1153 may protest the proposed assessment of the Trust Fund Recovery Penalty (TFRP). You must submit a written Protest to your Revenue Officer within 60 of the date of IRS Letter 1153 (DO).
What Reasons Will the IRS Consider NOT Assessing the Trust Fund?The IRS will consider any reason that proves the individual is not Responsible or Willful for collection of the Trust Fund tax and its transfer to the IRS.
Lack of Responsibility is easier to prove than lack of Willfulness. However, successfully proving either will get you out of the Trust Fund assessment.
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2 Common Reasons the IRS considers for non-assertion of the Trust Fund:Ministerial Acts - this refers to a non-owner employee that may perform the act of making federal tax deposits (FTDs), may access the business EFTPS account, may have check signing authority, process payroll, etc., but doesn't possess the power to direct the act of collecting, accounting for or paying over the Trust Fund taxes. In other words, she has to ask the owner which bills to pay when money is low, if and when employees get bonuses or raises and for other permissions regarding the company's finances.
Misapplied payments - the IRS often misapplies voluntary payments designated toward the Trust Fund. This is a great Protest reason as long as you have the proof to back it up. Proper substantiation may include copies of cancelled checks with specific designation instructions written on them, copies of letters including specific instructions to designate the funds to the TFRP which accompanied the payments, etc.
How Do I Appeal the Letter 1153 Proposed Trust Fund Assessment?You have 60 Days from the date of IRS Letter 1153 to Protest the assessment of the Trust Fund. The deadline is increased to 75 days if Letter 1153 is addressed to you outside of the United States. The IRS is very strict about the 60 Day Deadline to Protest.
You must submit your request in writing directly to the Revenue Officer assigned to your case. Her name and contact information will be on the first page of Letter 1153. Your request should state why you are not Responsible and/or Willful for the collection and submission of the Trust Fund tax to the IRS.
Your Protest will then be sent on to IRS Appeals for review.
If you have a specific question about the Trust Fund and a Protest or Appeal, contact us. We'll give you straight answers to your questions.