IRS Notice · Letter 1153 · Trust Fund Recovery Penalty

Letter 1153: the IRS proposes to assess your business's payroll tax against you

A Letter 1153 is a proposal, not an assessment — and the 60 days it gives you run from the day it was mailed or handed to you, not from the day you read it. The $25,000 test is on the total of all quarters, and signing Form 2751 has not ended your appeal.

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A Letter 1153 is a proposal, not an assessment. It starts a period in which the proposal can be contested, and this page is about what that period is, what it is measured from, and the three details inside it that decide most outcomes.

Nothing has been assessed against you yet. That is the first true thing and it is the one the letter's tone works against.

What has happened is that a revenue officer has recommended, and a group manager has approved, a proposal that the trust fund portion of your business's unpaid payroll tax be assessed against you personally. The letter is the notification and it opens a window.

Three things inside that window decide most outcomes, and all three are commonly got wrong:

The 60 days run from the date the letter was mailed or personally delivered — not from the day you read it. If the 60th day falls on a Saturday, Sunday or legal holiday, the next business day counts.
The $25,000 threshold that decides which kind of appeal you file is measured on the total of all periods, not on each quarter.
If you already signed the enclosed Form 2751, you have not given up your appeal rights. The IRS's own manual says so twice.

One thing that may already have happened without warning: a freeze on your personal refunds, applied when the letter was delivered.

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Key takeaways

•A Letter 1153 proposes the trust fund recovery penalty against a person. Nothing is assessed until the period runs.
•60 days from mailing or personal delivery — 75 if the letter was addressed to you outside the United States — to file a written appeal.
•The penalty is the trust fund portion only: withheld income tax plus the employee's share of FICA. Not the employer's matching half, and not the business's penalties and interest.
•$25,000 or less: a Small Case Request. More than that: a Formal Written Protest. The test is the sum of all periods on the notice.
•Signing Form 2751 does not extinguish appeal rights until the restriction period expires.
•Missing the 60 days ends the route to Appeals. It does not end the argument — Form 843 after assessment, and a refund suit, both remain.

What a Letter 1153 is

A Letter 1153 is the preliminary notice that the IRS intends to assess the trust fund recovery penalty against you as an individual. The Internal Revenue Manual describes what it does:

“Notifies the responsible person of the proposed assessment; Contains a description of the available appeal rights; Affords the responsible person the opportunity to agree to or to appeal the assessment.” — Internal Revenue Manual 5.7.4.7(2)

It is a required step, and the requirement is statutory. Section 6672(b)(2) provides that the mailing of that preliminary notice “shall precede any notice and demand of any penalty under subsection (a) by at least 60 days.” The IRS cannot bill you for this until it has told you and waited.

With one exception, which the statute states and the manual repeats twice. Section 6672(b)(4): “This subsection shall not apply if the Secretary finds that the collection of the penalty is in jeopardy.” The manual is blunter — “The 60-day rule does not apply to a jeopardy assessment” — and a jeopardy assessment is one of only three things that lets the process move before the period expires, the others being the period expiring and a protest arriving. It is uncommon and it is not nothing, and a page that promises you sixty guaranteed days has overstated it.

What it is not. It is not a bill, it is not a lien or a levy, and it is not the business's debt being transferred. The trust fund recovery penalty is a separate assessment against a separate taxpayer — you — for a defined slice of the business's liability. The business still owes what it owes.

And the letter goes to the person, not to the business. More than one person can receive one for the same quarters, and each is proposed at the full amount.

One category of person is taken out by the statute itself, and it is worth naming because these people are routinely frightened by this letter. Section 6672(e) exempts an unpaid, volunteer member of the board of a tax-exempt organization who “(1) is solely serving in an honorary capacity, (2) does not participate in the day-to-day or financial operations of the organization, and (3) does not have actual knowledge of the failure on which such penalty is imposed.” All three, together. The manual applies it and adds that willfulness is difficult to establish against such a person in any event.

Sources: IRM 5.7.4 (revision 1 July 2025), IRM 5.7.6 (revision 5 June 2025), IRC 6672 — read 6 September 2026.

What is actually in the envelope

Five documents, and knowing what each does saves a great deal of guessing.

Document	What it is
Letter 1153	The proposal, and the description of your appeal rights
Form 2751	“Provides a report of the business liability ... a breakdown of the proposed TFRP assessment for each quarter ... Allows the responsible person to agree to the proposed assessment”
Publication 1	Your rights as a taxpayer
Page 4 of Form 4183	Part of the officer's recommendation
ATFR calculation sheets	“showing the penalty computation ... so that they are aware of how payments were applied to the account”

The last two are the ones nobody reads and they are the ones that show the working. The calculation sheets show how the IRS applied the business's payments across the quarters — which decides how much trust fund liability remains in each one, and therefore the number being proposed against you.

The amount, and what it does not include

The penalty equals the unpaid trust fund tax: withheld income tax plus the employee's portion of withheld FICA. The IRS: “The amount of the penalty is equal to the unpaid balance of the trust fund tax.”

It does not include the employer's matching share of FICA, and it does not include the penalties and interest on the business account. In practice that means the number proposed against you personally is materially smaller than the business's balance. How much smaller depends on your wage mix and on how the business's payments were applied across the quarters — and the calculation sheets in your envelope show both, which is why they are worth reading before you decide anything.

This is worth checking rather than assuming. A proposal built on the wrong application of the business's payments proposes the wrong number, and the calculation sheets are in the envelope specifically so that you can see how they were applied.

Your 60 days — measured from what

The trigger is the one detail people most often get wrong, and it is not the date you opened the envelope.

“the responsible person has 60 days (75 if the letter was addressed outside of the United States) from the date of the mailing of the notice or the date of personal delivery to respond.” — Internal Revenue Manual 5.7.6.2

Timeliness is measured on the postmark, not on receipt at the IRS:

“A protest is timely if it is postmarked or mailed by certified or registered mail, so that the mailing date can be proven, on or before the 60th day (75th day if the letter was addressed outside of the United States) after the date Letter 1153 was mailed or personally delivered. A private postage meter stamp is not evidence of when a request for appeal was mailed; it merely establishes when it was stamped.”

That last sentence is a free, specific, actionable instruction and it appears on almost no other page about this letter. Send it certified or registered, and keep the receipt.

And the day itself can move. The same subsection continues: “In determining the timeliness of the appeal, the guidelines in IRC 7503 should be followed, which state in part: ‘When the last day prescribed under authority of the internal revenue laws for performing any act falls on Saturday, Sunday, or a legal holiday, the performance of such act shall be considered timely if it is performed on the next succeeding day which is not a Saturday, Sunday, or a legal holiday.'” If your sixtieth day is a Sunday, you have Monday. Which is worth knowing and is not worth relying on.

There is a five-day allowance and it is not yours. The manual instructs the IRS to wait “an additional five days for receipt and processing of timely mailed protests” before issuing notice and demand. That is the IRS's processing margin. It is not an extension and you should not write your deadline as 65 days.

And there is a ten-day invitation on the letter that preserves nothing. The letter tells you that you may contact the revenue officer within ten days of delivery to discuss the matter informally. That is worth doing and it is not a step in the appeal:

“In order to preserve their appeal rights, the responsible person must mail (or fax, if applicable) a written appeal within 60 days of the mailing or personal delivery of Letter 1153.”

Both sentences travel together or neither does. Calling the officer and being told they will look at it again is not a protest.

Which appeal you file, and the threshold that catches people

Amount proposed	What to file
$25,000 or less	Small Case Request
More than $25,000	Formal Written Protest

And here is the sentence that matters, because the notice lists quarters separately:

“A responsible person may contest all of the periods listed in the notice in a single protest. However, If one tax period and/or the sum of all the tax periods is more than $25,000 the responsible person must submit a Formal Written Protest.” — Internal Revenue Manual 5.7.6.4

Four quarters at $9,000 each is $36,000, and a Formal Written Protest is required. Looking at the largest single quarter and reaching for the simpler document is the natural mistake, and it is a mistake about form rather than about time.

Which matters because of what the manual says about timeliness: “A protest filed within the appropriate time frame is considered timely even if it is incomplete.” The clock forgives an incomplete protest. It is the wrong kind of protest, and no protest, that cause the damage.

One thing a protest costs, and it should be said rather than discovered. The same Note continues: “If a protest is timely filed in a case in which Letter 1153 was properly delivered before the expiration of the ASED, the ASED will not expire before 30 days after Appeals' final administrative determination or 90 days after the date of the mailing or delivery of the Letter 1153, whichever is later.” Filing a protest extends the period the IRS has to assess. That is normally the right trade — an appeal is worth more than a statute that may not have been about to expire anyway — but it is a trade, and this is not a page that pretends otherwise.

The refund freeze that has probably already happened

When the delivery date of your Letter 1153 is entered into the IRS's system, a freeze is applied to your personal account:

“ATFR will systemically upload TC 130, Entire Account Frozen from Refunding, to freeze any potential refunds when a Letter 1153 delivery date is entered on ATFR.” — Internal Revenue Manual 5.7.4.7(2)

Nothing has been assessed against you, you may be intending to appeal and may win, and your personal refunds can be frozen before any of that is decided. The trigger is administrative — the freeze goes on when the delivery date is keyed into the IRS's system, not at the moment of delivery — and it sits on your individual account, where it is visible on your own transcript.

It is reversible, and by the same paragraph. The manual instructs the officer to review the freeze for reversal by a TC 131 where the trust fund liability is paid in full, and again “if the TFRP will not be assessed on any periods.” There is also a Letter 1153-W, which the IRS issues to withdraw the proposal outright when new information changes the recommendation — the mechanism behind the outcome this page's close describes, and one that cannot be issued once a protest has gone to Appeals.

We are stating all of this because it is true and because it is checkable, not to alarm. It is the clearest illustration on the page of why the sixty days should be used rather than watched.

If you already signed Form 2751

This is the most valuable paragraph on the page for anyone who signed at the interview, and the IRS's manual says it twice:

“Do not treat a signed Form 2751 as a conclusive waiver until the 60 or 75-day restriction period (plus five additional days) expires, as a responsible person may change their mind after signing the waiver. A responsible person's signature on Form 2751 does not extinguish their appeal rights.” — Internal Revenue Manual 5.7.4.7(2), and again at 5.7.4.2.4(10)

Read what that is and what it is not. It is an instruction to IRS employees about how to treat a signature during the restriction period. It is not a general right to change your mind at any time, and it does not extend anything: acting on it means filing the protest inside the same sixty days as everybody else.

But if you signed in the room because it seemed like the cooperative thing to do, and you have since had second thoughts, the window is very probably still open. That is a genuinely different position from the one most people in that situation believe they are in.

What happens if you do nothing

After the period expires with no protest, the case is treated as unagreed and the penalty is assessed. From there it is a personal tax debt: notice and demand, then the ordinary collection machinery — a federal tax lien determination, and levy tools — against you rather than against the business.

What you lose is the route to Appeals. What you keep is worth naming, because most pages on this letter stop at the loss:

“Advise the responsible person they may file Form 843, Claim For Refund and Request for Abatement, once the TFRP is assessed.” — Internal Revenue Manual 5.7.6.7

And section 6672(c) provides a bond-and-refund route for stopping collection while the liability is litigated. It is not open-ended and its clock is shorter than the one you just missed: it requires, “within 30 days after the day on which notice and demand of any penalty under subsection (a) is made,” paying at least the minimum amount required to commence a court proceeding, filing a claim for refund, and furnishing a bond of “1½ times the amount of excess of the penalty assessed over the payment.” A further 30 days runs from a refund denial to begin the proceeding. So “longer, harder road” is right about the effort and wrong about the time: the door opens and closes inside a month of the assessment.

One more thing that survives, and it is aimed at co-owners:

“If more than 1 person is liable for the penalty under subsection (a) with respect to any tax, each person who paid such penalty shall be entitled to recover from other persons who are liable for such penalty an amount equal to the excess of the amount paid by such person over such person's proportionate share of the penalty. Any claim for such a recovery may be made only in a proceeding which is separate from, and is not joined or consolidated with— (1) an action for collection of such penalty brought by the United States, or (2) a proceeding in which the United States files a counterclaim or third-party complaint for the collection of such penalty.” — Internal Revenue Code section 6672(d)

Three limits, and the third is in the statute's own second half. It is a civil claim between the people, not something the IRS administers — you cannot ask the IRS to split it. It belongs to a person who has paid, not to one deciding whether to. And it must be brought as a separate proceeding, not folded into the government's collection action against you. Bringing one is a lawyer's question rather than a CPA's, which is worth saying because it is the point at which a lot of this stops being a tax problem. Ask on the free call and you will be pointed toward someone who does that work — it is a short list in Kentucky and there is no reason for you to build it from search results at midnight.

The Form 4180 Interview Prep Sheet

What the interview behind this letter tested, what the two findings require, and the statutory rights that applied in the room. First name and email address. The thresholds and the appeal routes on it come from manual sections with their own revision dates, and on a page where a date is the whole subject it would be odd to hand you a sheet with no way of updating it.

[ Download the prep sheet → ]

What to do in the next few weeks

1. Today: find the delivery date and count from it. If it came certified, the date is on the receipt. If a revenue officer handed it to you, that is the date. The officer is instructed to date-stamp or hand-write the date of service on the letter — look for it. This is a five-minute job and everything else depends on it.

2. Add up every quarter on the Form 2751 and compare the total to $25,000. That decides which document you file, and it is the total that governs.

3. Read the calculation sheets against the business's payment history. How the business's payments were applied across quarters decides how much trust fund liability remains in each. This is the arithmetic underneath the number and it is in the envelope.

4. Establish which quarters you actually had authority in. Responsibility is assessed period by period. Someone who joined, or left, mid-way is not exposed on the whole span, and the periods are on the form.

5. File the protest by mail, certified or registered, and keep the receipt. Not a private postage meter. The manual says in terms that a meter stamp is not evidence of when it was mailed.

6. If you signed Form 2751 and want to appeal, do both things at once — file the protest inside the same sixty days, and say in it that the signature is not to be treated as a waiver. The manual already instructs the IRS that it is not, and saying so removes the argument.

The hard part, honestly. The protest is not a letter saying you disagree. It is an evidenced account of your authority — or the absence of it — during specific quarters, and it has to be written knowing what the revenue officer already recorded on Form 4180. That record exists, it is in the file, and a protest written without knowing what is in it can contradict something you said in the room without meaning to. What the Form 4180 interview recorded →

If you want thirty minutes to establish your delivery date, your total and which document you need, that is free and it is the part with a clock on it. (800) 236-3741.

Katherine M. Johnson, CPA, CTRS

Katherine M. Johnson is a licensed CPA with over 30 years of experience and a Certified Tax Resolution Specialist (CTRS). She personally handles every case — representing individuals and businesses before the IRS and state revenue departments nationwide.

Read full bio

The Kentucky note

Kentucky reaches individuals for the entity's tax debts on its own criteria, and a federal outcome does not decide it.

Sales tax the Commonwealth treats as held on its behalf, and Kentucky withholding, both create personal exposures under state law — with their own definitions, their own protest window and their own consequences, including against the licenses a person needs to work. A protest filed federally does not pause any of it, and where both are live the sequencing matters.

When a Kentucky LLC's tax debt reaches its managers →

What we see

By the time a Letter 1153 arrives, the process behind it is further along than the letter sounds: the interview happened months ago, the recommendation has been written, and a group manager has already approved it. What is left is a period with a date on it, and a good part of that period gets spent deciding whether the letter is real. So the first thing we do is find the date of service and count from it, and the second is add the quarters up, because those two facts decide what has to be written and how long there is to write it. The other thing we see is the signature — somebody signed the Form 2751 at the interview because refusing felt confrontational, and has assumed ever since that it was over; on the IRS's own instruction, it is not necessarily over. And the reason this letter gets left on a kitchen table is that it is the first document that names a person rather than the company, which is exactly why the period it starts should be spent on the file instead of on the decision to open it.

Katherine — You're welcome to swap this for what you actually see on a Letter 1153.

Every case here is reviewed and worked by Katherine personally. Not a processing department, and not a case manager relaying messages from someone you never meet.

On the credentials, because the distinction is doing work on this page. The right to represent you comes from the CPA license under Circular 230. With a Form 2848 on file for both the business and you, the transcripts for every period in issue come to the representative, and how the business's payments were applied across quarters becomes something to read rather than infer. The Certified Tax Resolution Specialist credential is a tax-resolution specialism on top of the license, with its own annual continuing education. It is what she has studied; the license is what opens the account.

Where this sits

Document	What it is
Form 4180	The interview whose record this proposal rests on.
▶Letter 1153You are here	The proposed personal assessment, and the 60 days it starts.
Letter 903	The separate employment tax warning issued to the business.
CP161	The business's own balance, which continues regardless.

All notices: The IRS notice index → On personal exposure generally: What the Trust Fund Recovery Penalty reaches → What we do at this stage: IRS collection defense →

Frequently asked

Does a Letter 1153 mean I have been assessed?

No. It is a proposal, and the statute requires the IRS to wait at least 60 days after mailing it before issuing notice and demand. Assessment follows the period; it does not precede it.

When exactly do my 60 days start?

From the date the letter was mailed to your last known address, or the date it was personally delivered. Not from receipt and not from the day you read it. The revenue officer is instructed to record the date of service on the letter itself.

I signed the Form 2751 at the meeting. Is it too late?

Probably not. The IRS's manual states that a signed Form 2751 is not treated as a conclusive waiver until the restriction period expires, and that the signature does not extinguish appeal rights. You would still need to file the protest inside the same 60 days.

Is the penalty the same as what my business owes?

No, and it is generally a good deal less. It is the trust fund portion — withheld income tax plus the employee's share of FICA — and it excludes the employer's matching share and the penalties and interest on the business account.

Two of us got one for the same quarters. Do we each owe the full amount?

Each proposal is for the full trust fund amount, and the IRS collects the total once rather than twice. Section 6672(d) gives a person who has paid more than their proportionate share a right to recover the excess from the others — which is a claim between you, not something the IRS administers, and it is a question for a lawyer rather than for us.

What if I miss the 60 days?

You lose the route to Appeals. You do not lose the argument: the IRS's own instruction in that situation is that you may file a Form 843 claim for refund once the penalty is assessed, and section 6672(c) provides a bond-and-refund route as well. Both are longer.

If you would rather not do this alone

We represent individuals in trust fund recovery penalty matters from our office in Georgetown, Kentucky.

The first call is free, carries no obligation, and is a review rather than a pitch. Thirty minutes. On this letter it is a dating exercise before it is anything else. You end with: the date your 60 days actually started and the date they close, whether your total puts you above or below the $25,000 line and therefore which document you file, which quarters you are plausibly exposed on and which you are not, and whether a signature on Form 2751 has changed anything.

Some of this can be done alone, and it is worth knowing when. If the total across all quarters is under $25,000 and your facts are clean — no signing authority, or you left before the quarters in question, and the documents show it — a Small Case Request is a form and a letter, and the IRS publishes what it needs.

It is a different piece of work where the facts are mixed rather than clean:

Authority in some quarters and not in others.
A signature on an account you never used.
A date you learned about the shortfall that you cannot now establish.
A signed Form 2751 you have had second thoughts about — the appeal is still open, but only inside the same period, and the protest still has to be filed inside it.
A total above $25,000, which makes this a Formal Written Protest rather than a Small Case Request.

Those are decided on the record the interview created, and reading that record before writing against it is most of the work. It is also why the period matters more than it looks: the protest is a piece of drafting, and drafting takes longer than deciding to draft.

So do not spend the 60 days deciding whether to find out. They run from the day the letter was mailed to you or handed to you — not from the day you read it — and thirty minutes settles your dates, your total, and which document you file.

The first call is free, it runs thirty minutes, and there is no obligation.

(800) 236-3741 — answered 24 hours a day, seven days a week. After hours you reach our AI receptionist rather than voicemail: it answers the common questions, takes your date of service and your details, and books the first available thirty minutes. Book a time →

Have three things in front of you on the call: the letter with its date of service, the Form 2751 with its quarter-by-quarter totals, and the ATFR calculation sheets that came in the envelope with them.

Call (800) 236-3741 Book a time

Next Level Tax Resolution is an independent CPA firm. It is not affiliated with, endorsed by, or acting on behalf of the Internal Revenue Service or any government agency. This article is general information, not tax advice for your situation. Every account is different, and the options described here are not available to everyone.

The NLTR Office ·

Reviewed by Katherine M. Johnson, CPA, CTRS