The IRS is moving to collect your company’s unpaid payroll taxes from you personally. That is a separate assessment against you as an individual, and it does not go away when the business does.

The Business Owes It. The IRS Wants It From You.

When a company withholds income tax and Social Security and Medicare from its employees’ paychecks, that money is not the company’s. It is held in trust for the government until it is deposited. When the deposits stop, the IRS does not simply wait for the company to recover — it looks for a person to hold responsible.

That is the Trust Fund Recovery Penalty, and the authority for it is IRC §6672. The statute reaches any person required to collect, truthfully account for, and pay over the tax who willfully fails to do so. The penalty equals the full amount of the tax that was not collected, accounted for, or paid over.

An assessment against you personally survives the corporation. Dissolving the company, closing the doors, or filing a business bankruptcy does not remove a penalty that has already been assessed against you as an individual.

What the Penalty Actually Covers

It is narrower than most people assume, and that matters — the amount the IRS first proposes is not always the amount that is correct.

Included: the unpaid income tax withheld from employees, plus the employees’ share of the withheld FICA taxes.
Not included: the employer’s matching share of FICA. That stays a company liability — it is not part of the personal penalty.

Getting that split right is one of the first things worth checking on any proposed assessment.

Two Things the IRS Has to Establish

Both, not one. Where a case is defended, it is usually defended on one of these two.

Responsibility. A responsible person has the duty to perform and the power to direct the collecting, accounting and paying of trust fund taxes. Officers, partners, LLC members, shareholders, controllers, CFOs, bookkeepers, payroll staff and managers have all been looked at. Signing authority on the checks is not the test by itself — the IRS’s own manual treats “they were an officer and could sign checks” as inadequate support for an assessment.

Willfulness. You knew, or should have known, about the unpaid taxes and either intentionally disregarded the law or were plainly indifferent to it. No bad motive is required. Paying other creditors while the payroll taxes went unpaid is treated as an indicator.

“Willful” here is not a criminal standard, and that surprises people. Keeping the lights on and the suppliers paid while the deposits slipped is exactly the fact pattern the IRS treats as willful.

The Interview Comes First — Form 4180

Before the IRS proposes anything, a revenue officer interviews the people who might be responsible. The record of that interview is Form 4180, the Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes. It is evidence-gathering, not an assessment — but it is where the case against you is built.

It covers your title and role, who could sign checks or authorize electronic payments, who could open and close the bank accounts, who decided which creditors got paid, who could hire and fire, your involvement with the 941s and the deposits, when you first knew the taxes were unpaid, what money went out after that, and who else had financial authority.

A procedural point worth knowing: the revenue officer is not supposed to mail you Form 4180 to fill out on your own — or even to look at before the interview. The IRS manual is explicit that it is to be completed in person or over the phone. If someone hands you the form to complete at your leisure, that is not the normal procedure. It is a live interview about your personal liability, and it should be treated as one.

The IRS generally wants to interview every potential responsible person. Where several people could be in the frame, what each of them says shapes who ends up assessed.

Then Letter 1153 Starts a Clock

You have 60 days to file a timely protest — 75 if the letter was addressed to you outside the United States. The period runs from the day after the letter is mailed or handed to you, not from the day you opened it.

Letter 1153 tells you the IRS proposes to assess the penalty against you and sets out your appeal rights. It arrives with Form 2751, Proposed Assessment of Trust Fund Recovery Penalty — the form that lets you agree to the proposed amount. It comes hand-delivered or by certified mail, return receipt requested, which is how the IRS fixes the date the clock starts.

Form 2751 is a form you can sign to agree. There is no obligation to sign it. Signing it is a decision about your personal liability, and it should be made after the record has been looked at, not at the kitchen table.

The statute itself requires that written notice come at least 60 days before any notice and demand for payment. That window is the best opportunity in the whole process. Once it closes, the argument moves to harder ground.

What We Do

We represent the person the IRS is trying to assess. That means we deal with the revenue officer, and you stop taking those calls.

File the authorization and take over communication with the IRS.
Pull the account records and establish what was actually assessed, for which quarters, and against whom.
Test both elements — whether you truly held the duty and the power, and whether the willfulness finding holds up on the facts.
Prepare you for the Form 4180 interview, and attend it — separating your personal facts from the company’s, and not letting conclusory language about “responsibility” or “willfulness” go into the record unchallenged.
Prepare and file the protest inside the 60-day window where the case supports it.
Where more than one person is in the frame, make sure the record reflects who actually controlled the money.
Deal with the underlying 941 liability as part of the same matter.

We do not run payroll and we do not offer payroll processing. This is representation work on a collection matter. If the company is also facing levy or asset seizure or wider collection action, those move alongside it.

How This Starts

1. You retain us. A retainer secures our services, the same way you would retain an attorney. It is not priced against a scope, because at that point the scope is not yet known.

2. Discovery. Authorizations go in and we go to the IRS for the account records. This takes weeks, not days. Anyone who quotes you a plan before seeing the transcripts is guessing.

3. The case gets built on what comes back. Strategy follows the record. Resolution work is scoped and papered separately once we know what we are dealing with.

Questions People Ask

The company is closing. Does this go away?
No. The Trust Fund Recovery Penalty is assessed against you as an individual. It is a separate assessment from the company’s liability and it outlives the company.

I was not an owner. Can they still come after me?
Yes. Ownership is not the test. The test is whether you had the duty to pay the taxes and the power to direct the money. Bookkeepers and controllers have been held responsible; owners have sometimes not been.

I never meant to keep the money.
Intent to steal is not required. The standard is whether you knew or should have known and were at least plainly indifferent. That is a lower bar than most people expect, which is exactly why the facts have to be developed carefully.

A revenue officer sent me Form 4180 to fill out. Should I?
Ask first. The IRS’s own manual says the officer should not give or mail that form to you or your representative to complete on your own, or even to review before the interview — it is meant to be done in person or by phone. Either way, it is an interview about your personal liability, and it is worth having representation in place before it happens.

I was only the bookkeeper. Am I safe?
Not automatically. The test is authority and control, not job title. Controllers, CFOs, bookkeepers and payroll staff have all been considered. Equally, being an officer with check-signing authority is not enough on its own — the IRS manual specifically calls that reasoning insufficient.

More than one of us could be blamed. What then?
The IRS can assess more than one person for the same quarter, and it generally tries to interview all of them. Each person assessed is jointly and severally liable for the entire unpaid trust fund amount — not a share of it. What stops that becoming a double recovery is IRS policy: the full amount is collected only once, whether it comes from the company, from one responsible person, from several, or from a combination. Who actually controlled which bills got paid is still the central question, and it needs to be on the record.
Two limits take the edge off that. The collect-once rule covers the trust fund amount itself — interest can still be collected from each person separately. And a payment is not treated as finally collected until the refund window has run, so for a period the totals paid across everyone can exceed the balance while those rights stay open. Anyone who tells you two owners simply split it in half is describing something the IRS does not do.

What does it cost?
We do not quote a resolution fee on a first call, because the information to price it does not exist yet. You retain us, discovery happens, and the resolution work is scoped after that as a separate engagement.

Talk to an Enrolled Agent, Not a Call Center

Peter Kici is an Enrolled Agent — federally authorized to represent taxpayers before the IRS. If a revenue officer has asked to interview you, or Letter 1153 and Form 2751 have arrived, the clock is already running.

Call (407) 531-8705 or book a consultation.

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