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CPA discusses IRS Letter 1153 | Trust Fund Recovery Penalty | Form 2571

Wilmington NC CPA discusses IRS Letter 1153

Gary Bode, CPA: Once you receive IRS Letter 1153, you have only 10 days in which to request a conference with the Revenue Officer. For a free consult call (910) 399-2705.

IRS Letter 1153 is a proposed Assessment for back payroll or excise taxes against you personally, not your company. The IRS thinks you are responsible for the Company’s disbursement of funds and willfully neglected paying these taxes. Letter 1153 is no surprise; the IRS vigorously attempts to collect from the Company before resorting to collecting from you. The “Trust” portion is the  federal withholding and Social Security. You’ve got 60 days to Appeal, no extensions. The penalty is huge and an assessment can last 10 years.

Agree with the Assessment on Letter 1153?

Fill out the accompanying Form 2571 and send it back. Now figure out how to pay. I’d check their calculations first though.

Planning to not Pay?

Inadvisable, but sometimes inevitable as a Company’s cash flow spirals downward. Seek appropriate professional planning advice. Designate your Company’s partial payments to the Trust Fund component before finalizing an Installment Agreement. Delay receiving the Certified delivery of Letter 1153. Be ready to Appeal.

Ask Immediately for a Conference

You have to be quick – within ten days of receipt of Form 1153. Your CPA gets a chance here to review the IRS evidence with the Revenue Officer assigned to the case.

Possible Defenses?

  • Perhaps you didn’t have the authority to designate payments?
  • Maybe the IRS didn’t follow its own procedures?
  • Maybe the amount is incorrect?
  • Note that exact defenses may depend on what tax district you live in.

I’m a Wilmington NC CPA with a virtual office to accommodate long distance clients. For a free phone consult call (910) 399-2705.

 

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