IRS 1153 letter, in brief, explains that the IRS has made unsuccessful attempts to collect unpaid employment or excise taxes from a business taxpayer. Due to the inability to collect or the failure to respond to the IRS, the IRS now is attempting to collect a portion of the outstanding tax liability from an individual taxpayer.
The IRS can impose a Trust Fund Recovery Penalty (TFRP) levy against the individual taxpayer’s bank account if:
- The person is responsible for collecting and paying tax to the IRS, and
- The person WILLFULLY neglects to pay the taxes.
Typically, the IRS is trying to collect from a responsible individual who has collected payroll/employment taxes on behalf of a business (Social Security or Medicare) and fails to remit such taxes.
Struggling businesses will often use the taxes set aside in trust to pay operating costs to keep the business alive. Although this may seem like a reasonable solution (you can pay the IRS once you can pay your employees and ultimately generate more revenue to pay the IRS) this is NOT a solution!
The IRS will not be forgiving and will potentially levy BOTH your business and personal bank accounts.
If you have received an IRS letter 1153 or have fallen behind with your employment tax liability, call one of our Tax Attorneys today to discuss a Game Plan.