TFRP investigations
Trust Fund Recovery Penalty Help
Facing possible personal liability for business payroll taxes? Lynx helps review TFRP interview requests, proposed assessments and your role.
Led by Brandon Lynch, EA — former IRS Revenue Officer and Supervisory Revenue Officer.
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Complimentary 20-minute consultation. Discuss your situation and next step, with no pressure to hire.
No gimmick guarantees. Any paid services and fees are discussed and agreed separately before you commit.
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Understanding TFRP
What Is the Trust Fund Recovery Penalty?
The Trust Fund Recovery Penalty (TFRP) concerns the trust fund portion of unpaid payroll taxes: generally federal income tax withheld from employees and the employee share of Social Security and Medicare taxes. The business owes its payroll tax debt. The IRS may also investigate whether a person should be assessed personally for unpaid trust fund taxes.
Personal exposure depends on responsibility and willfulness; it does not follow automatically from the business balance. The business collection matter and an individual's TFRP investigation may need to be addressed together. See the related Payroll Tax Debt service and IRS TFRP guidance.
Key IRS Issues
Responsibility and Willfulness
The IRS evaluates these two questions for each person and tax period. Records can show how authority and knowledge changed over time.
Responsibility
Who had meaningful authority over collecting, accounting for, or paying the taxes? The IRS may examine bank access, check signing, payroll and deposit decisions, and who could choose which creditors to pay. An officer title or a signature alone does not establish responsibility; actual discretion matters, including for non-owner employees.
Willfulness
What did the person know about unpaid trust fund taxes, when did they know it, and what payment decisions followed? The IRS may review notices, missed deposits, payments to other creditors, and whether a person disregarded a known problem. Willfulness does not require a bad motive, but it cannot be assumed from a title or the existence of debt.
The record matters
Bank records, payroll and tax-deposit history, Forms 941, corporate documents, correspondence, and payment records can support or challenge an account of actual control and knowledge.
Know the Stage
Where Are You in the TFRP Investigation?
The next step depends on what the IRS has done, not just the size of the payroll tax balance.
The IRS examines each person’s actual authority and conduct for the tax periods involved. Being investigated does not establish personal liability.
The interview records evidence about your role, knowledge and decisions. It is one part of the investigation, not an assessment. Read the Form 4180 interview guide.
Letter 1153 notifies you of the proposed assessment and appeal rights. Form 2751 identifies the proposed amounts and allows you to agree. A proposal is distinct from a recorded assessment.
If you disagree, follow the letter’s written-protest instructions and deadline. Informal discussions with the Revenue Officer do not replace a timely appeal request.
After assessment, the IRS has recorded personal liability. Review and collection options depend on the assessment, notices, prior appeal opportunity and payment history. The IRS Collection Appeals guide explains other appeal routes; those procedures do not replace a Letter 1153 protest.
Received Letter 1153? Check the response deadline.
You generally have 60 days from the date Letter 1153 is mailed or personally delivered to appeal, or 75 days if it is addressed outside the United States. Follow the letter’s instructions and send your written protest to the IRS employee named in it. Include a copy of Letter 1153, identify the disputed periods and explain your disagreement, duties and responsibilities. Keep a copy and proof of timely submission. See the IRS instructions for preparing a TFRP appeal and Letter 1153 response procedures.
After Assessment
What if the TFRP Has Already Been Assessed?
Confirm whether the IRS has proposed personal liability or recorded an assessment. The available review path may differ. Bring the periods, assessment and notice records, any prior protest or Appeals decision, and payment history to the review. Those facts and applicable deadlines shape whether an administrative challenge, payment adjustment, or refund-claim route may be relevant.
A request for review does not guarantee abatement, automatically suspend collection, or extend a deadline. LTA can assess the case history and evidence before recommending a response.
Our Process
How Lynx Tax Advisors Helps
We review the individual exposure alongside the business payroll-tax matter when both are in play.
Identify the tax periods, IRS contacts, notices, and current investigation or assessment stage.
Examine IRS account information and the business's banking, payroll, and payment evidence.
Evaluate actual authority, knowledge, timing, and conduct for each relevant period.
Plan the appropriate interview, protest, collection, or resolution response based on the record and deadlines.
Why IRS Collection Experience Matters
Nearly 20 years of IRS experience, including Revenue Officer and supervisory assignments.
That perspective helps LTA organize the facts, understand how a TFRP investigation fits into collection work, and identify when a response or escalation may be appropriate. Experience informs the strategy; it does not guarantee an outcome.
TFRP FAQ
Frequently Asked Questions About the Trust Fund Recovery Penalty
Can a title or check-signing authority alone make someone responsible?
No. The IRS considers actual financial authority and independent judgment. An officer title or ability to sign checks may be evidence, but neither alone decides responsibility.
What does willfulness mean in a TFRP case?
The IRS looks at knowledge of unpaid trust fund taxes and conduct afterward, including payment decisions and disregard of a known problem. A bad motive is not required. Timing and authority matter for each period.
What is a Form 4180 interview?
It is an IRS interview used to document a person's role, authority, knowledge, and payment decisions. It is investigative, not an agreement to assessment. Read the full Form 4180 guide.
What is Letter 1153?
It generally notifies a person of a proposed TFRP assessment and an opportunity to protest. IRS procedures generally provide 60 days after mailing or personal delivery, or 75 days if addressed outside the United States. Check the actual letter and deadline immediately.
Can more than one person be assessed?
Yes. The IRS may investigate and assess more than one person when the facts support responsibility and willfulness. Each person's role and the relevant tax periods need separate review.
Can I appeal a proposed TFRP assessment?
A timely protest of a Letter 1153 proposal may lead to IRS Appeals review. The response requirements and deadline depend on the notice. See the Collection Appeals guide for a broader overview.
What if the TFRP has already been assessed?
Gather the assessment and notice records, periods, prior Appeals history, payments, and evidence about authority and knowledge. Review options differ from a protest of a proposed assessment; a review request does not itself stop collection.
Should I get help before a Form 4180 interview?
Reviewing the periods, records, and your actual role beforehand can help you give accurate information and identify questions for the Revenue Officer. You may discuss representation before the interview.
Related IRS Collection Services
Related Services
TFRP Help
Let’s Discuss Your Trust Fund Recovery Penalty Situation
Bring the IRS notice or interview request, relevant tax periods, and what you know about your role. We can discuss the next step in a complimentary 20-minute consultation, with no pressure to hire.