Letter 1153: Proposed Trust Fund Recovery Penalty
Prepared by TaxRZR editorial team · IRS sources checked 2026-10-29 (ET) · professional review pending · This page’s Source Notes
Letter 1153 proposes holding you personally liable for unpaid trust fund taxes. The IRS proposes that you were responsible for collecting or paying those taxes and willfully failed to do so.
What the IRS can do next
After the applicable protest period, the IRS may assess the Trust Fund Recovery Penalty against you personally unless a timely protest or other protection prevents assessment. Business payroll debt can therefore become personal liability.
Generally protest within 60 days of mailing or personal delivery; 75 days if addressed outside the United States.
The period begins the day after mailing or personal delivery, not when you choose to open the letter. Special rules, including jeopardy assessment, may apply. Follow the protest instructions, confirm the final date and keep proof of timely mailing. Do not rely on a generic date calculator.
Review the proposed periods and responsibility and willfulness findings promptly. Consider professional help before signing an agreement or letting the protest window expire.
Steps to work through
- 01Gather payroll returns, bank signature authority records and evidence of who controlled payments.
- 02Read Letter 1153 and any Form 2751 carefully; signing an agreement is different from protesting.
- 03If you disagree, prepare the written protest required by the letter before the applicable deadline.
- 04Separate the company balance from the proposed personal assessment when planning next steps.
Common misreadings
- A corporate entity does not automatically protect a responsible person from this penalty.
- The 60-day domestic rule is not the rule for a letter addressed outside the United States.