Restructure
60%
lower daily payment
IRS Form 941 Resolution
Resolve 941 payroll tax liability before TFRP attaches personally
Unpaid employment taxes — Form 941 — are the most dangerous business debt the IRS collects. We negotiate Installment Agreements, Offer in Compromise, and TFRP defense for owners and responsible parties.
941
payroll tax
TFRP
§6672 penalty
IA
installment plans
OIC
offers in compromise
THE PROBLEM
941 tax is personal
TFRP DEFENDED
$285K → $0 personal
TFRP successfully challenged · CA owner
Once TFRP attaches, bankrupting the business does not extinguish the personal liability.
When a business doesn't remit payroll taxes, the IRS treats it as theft from the trust fund. The Trust Fund Recovery Penalty (TFRP, IRC §6672) attaches the unpaid trust portion to every "responsible person" — owners, officers, sometimes bookkeepers — personally.
Once TFRP attaches, bankrupting the business does not extinguish the personal liability. That's the trap most owners don't see coming.
The window to influence outcome is at the Letter 1153 / Form 4180 stage — before the assessment is final. After that, defenses narrow.
WHAT WE HANDLE
6 scenarios, opened up
01
Negotiate a structured payment plan with the IRS that the business can actually sustain.
How we run it
- 01Confirm balance, ASED, and CSED
- 02Build ability-to-pay analysis (Form 433)
- 03Negotiate IA terms with Revenue Officer
- 04Document and execute IA
Typical outcome
Avg outcome: monthly payment within actual cash capacity
02
Settle the liability for less than full amount based on documented inability to pay.
How we run it
- 01Confirm OIC eligibility per RCP
- 02Build Form 656 + 433-A/B package
- 03Submit and negotiate counter-offers
- 04Close on accepted offer
Typical outcome
Avg outcome: 10–35% of balance, 6–12 month process
03
Challenge the "responsible person" or "willfulness" determination at the Letter 1153 / Appeals stage.
How we run it
- 01Calendar Letter 1153 protest deadline
- 02Build responsible-person + willfulness defense
- 03Submit protest to Appeals
- 04Litigate or settle TFRP at Appeals
Typical outcome
Avg outcome: TFRP eliminated, capped, or apportioned
04
Pause IRS collection while the business stabilizes, with documented hardship support.
How we run it
- 01Document hardship per IRM 5.16
- 02Submit Form 433 with substantiation
- 03Negotiate CNC determination
- 04Maintain CNC through compliance
Typical outcome
Avg outcome: collection paused 12–36 months
05
First-time abatement and reasonable-cause arguments to reduce penalty stack.
How we run it
- 01Identify FTA eligibility and reasonable cause
- 02Build penalty abatement request
- 03Submit and follow up with IRS
- 04Document penalty removal
Typical outcome
Avg outcome: 25–50% of penalty stack abated
06
Withdraw, subordinate, or release federal tax liens; stop wage and bank levies.
How we run it
- 01Identify lien filings and levy threats
- 02Negotiate withdrawal, subordination, or release
- 03File CDP if needed
- 04Restore banking and credit access
Typical outcome
Avg outcome: levies stopped, liens managed
“
FROM THE DESK
The Trust Fund Recovery Penalty turns business tax debt into personal tax debt — and bankrupting the company doesn't make it go away. The Letter 1153 stage is where 941 cases are won or lost.
Our process
From
same-day
intake
to
closeout
Most cases hit resolution between months 3 and 6. We move on day one because deadlines don't wait.
01
Map the unpaid quarters, accrued penalties, and Trust Fund Recovery Penalty exposure to responsible persons. Pull IRS account transcripts for every relevant period.
Account transcripts · Trust-fund vs non-trust split · TFRP exposure map
02
Get current on subsequent quarters first (IRS will not negotiate prior periods otherwise). File 433 financial disclosures and request collection hold during workout.
Compliance reset · 433-A/B · Currently Not Collectible review
03
Negotiate Installment Agreement, prepare Offer in Compromise, OR defend the TFRP assessment when the responsible-person determination is wrong.
Installment Agreement · OIC · TFRP defense · Form 4180 interview
04
Signed agreement, lien withdrawal where qualified, and a compliance plan so the business stays current going forward.
IA acceptance · Lien withdrawal · Compliance plan
“Delancey Street walked us through every step. The settlement saved the business — and our credit.”
WHERE WE WORK
IRS 941 Tax Resolution cases in all 50 states
FAQ
Common questions
What is TFRP and why does it matter?
The Trust Fund Recovery Penalty (IRC §6672) makes individuals personally liable for the trust fund portion of unpaid employment taxes — the employee withholding the business held as trustee for the IRS. It survives business bankruptcy. It's the single most important reason to address 941 debt early.
Who is a "responsible person"?
Anyone with authority over which bills get paid when payroll tax is short. Typically owners and officers, but it can extend to controllers, bookkeepers, and even some outside advisors. The IRS uses a multi-factor test on Form 4180.
Can I just pay it off slowly?
Often, yes — the IRS will accept Installment Agreements on 941 debt. But the agreement terms matter, the business has to stay current on new deposits, and the personal TFRP exposure has to be managed in parallel. It's rarely a one-decision case.
What if I already got a Letter 1153?
Call us today. Letter 1153 is the IRS proposing TFRP assessment — you have 60 days to protest. After 60 days the assessment is final and your defenses narrow dramatically. The 60-day window is where TFRP cases are won.
Will I lose my house?
TFRP can result in federal tax liens, which attach to real estate. Whether that becomes a forced sale depends on the case. Our job is to keep the file out of that posture by resolving the liability through IA, OIC, or successful defense at the assessment stage.
RESOURCES
Read more on irs 941 tax resolution
Guide
Negotiation flow
1 Demand
2 Counter
3 Term sheet
4 Settled
How does business debt settlement work?
Step-by-step explanation of the negotiation, timeline, and what changes for your business.
Read article
Defense
VS
Fight
$0
if you win
When to settle vs. when to fight
Not every creditor responds to negotiation. Here's how to read the situation.
Read article
Strategy
Avg. payment reduction
54%
Best business debt settlement companies (2026)
How we compare on track record, pricing, and outcomes.
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GET IN TOUCH
Talk to a strategist about your irs 941 tax resolution case
Free initial review. We'll look at your contracts, the creditor mix, and what's actually triggerable in the next 30 days. No commitment, no sales pitch — just a real read on your situation.
Direct line
212-210-1851
Picked up by an actual case manager — no phone tree.
Email
info@delanceystreet.com
Replies within 4 business hours, 24/7 for COJ emergencies.
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