New IRS guidance says that during an investigation, revenue officers must wait to send proposed assessments of the Trust Fund Recovery Penalty (TFRP). The TFRP is assessed on individuals who are responsible for collecting, accounting for and paying over payroll taxes but willfully fail to do so. The penalty is equal to the amount of the tax that wasn’t collected and paid. When the IRS proposes a TFRP, it sends Letter 1153 and Form 2751. The responsible individual can agree with the assessment by signing and returning Form 2751. But returning it doesn’t remove the taxpayer’s appeal rights and revenue officers shouldn’t treat a signed form as a conclusive waiver. (Memorandum SBSE-05-0323-0024)
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