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4180 Trust Fund Recovery Penalty Investigation

Does your business owe back 941 employment taxes to the IRS?  If the answer is yes, the IRS will be looking at you personally as a collection source.  The Service will look at anyone they believe may be a Responsible Person of the delinquent business.  That means they will be conducting an investigation into the business to determine who performs the duties and functions that determine financial policy, authorizes payroll and other payments of bills, authorizes Federal Tax Deposits and other critical decisions for the business.

The IRS will summons bank statements, copies of cancelled checks and bank signature cards from the business’ bank(s).  They may contact other third parties.  And a big part of the IRS Trust Fund Recovery Penalty (TFRP) investigation is Form 4180.

Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes

The Trust Fund interview is conducted by the local IRS Revenue Officer (RO) assigned to collect the back employment taxes from the business.  Your RO will use Form 4180 to ask the interview questions.  The form is designed to determine which individual(s) may be personally responsible for the delinquent tax debt of the business.

Responsible persons aren’t limited to owners, shareholders and officers of the business.  They can be employees of the business, office managers, bookkeepers, accountants, check signers, individuals that authorize EFTPS tax payments, payroll companies, lenders and more.

If you have a looming IRS employment tax debt, it’s important that you and any other possible responsible individuals associated with your business are prepared for the IRS TFRP investigation and form 4180 interview.

If you’re concerned about a Trust Fund debt; if you’re in the middle of the TFRP investigation or if you’ve already been assessed the Trust Fund, contact M&M today!  We can prepare you for the 4180 interview and investigation, represent you and your business in front of the IRS Collections division and negotiate the resolution of your tax debts.



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