by Jim Magary | Apr 4, 2016 | Tax Help
We are an affordable professional tax firm with an expertise in IRS tax problems including trust fund help and expert representation.
As a former IRS agent in teaching instructor, I have worked hundreds and hundreds of cases involving trust fund taxes both the assessments, the appeals and the collections.
The trust fund tax arises when corporations failed to pay back payroll taxes.
Under 6672 of the Internal Revenue Code, the Internal Revenue Service is authorized to set up the trust fund penalty against those who were responsible to pay the payroll tax debt. many times when the IRS contacts the corporate entity they are already out of business and there are no assets remaining.
If the company is still in business, the Internal Revenue Service will need to take the case off the collection computer and it does so by taking a business financial statement and making a determination on how to close the case.
Cases are usually closed by putting them in hardship, monthly payments or acceptance of an offer in compromise. IRS has the luxury of asserting the trust fund penalty against responsible persons and still collecting money from an operating Corporation.
If the corporation is defunct, the revenue officer will be on a hunt to set up the trust fund tax against those responsible.
IRS does not make rash decisions on who is responsible.
They put several man-hours of due diligence and to make sure they have the correct responsible persons.
As you read this blog you will learn more about the trust fund tax penalty.
The key to the trust fund tax penalty is the form 4180 which is one of IRS determining factors to find out who is responsible for the tax.
Each revenue officer is required to secure a 4180 from all those who may be responsible to pay the payroll taxes.
Get Representation
I cannot possibly tell you how many form 4180’s I have filled out.
There are many trick questions on form 4180. Any taxpayer going to this process should seek professional representation unless this is a very simple case and you can be rest assured IRS will not even think about holding you as a responsible person.
Call us today for a free initial tax consultation and I will walk you through the process of getting the best possible result giving the facts and circumstances of your case.
I would caution any taxpayer never give IRS a form 4180 unless they have had a true professional review the answers.
That form is one of the main forms that IRS uses to make a determination the trust fund recovery penalty.
You do not want to do this by yourself because of damaging result the trust fund penalty will have on your life.
This assessment will be individually made against you and IRS has the fertile arsenal to collect the taxes. If possible you want to file an appeal if you have a suitable case.
Filing an appeal will delay the assessment of this case and make sure more importantly that IRS finds responsibility against other parties and the cases all come out at the same time for collection. It also stops the interest from running on this tax debt until an assessment is actually made.
Some cases are very simple and taxpayers can represent themselves.
As a general rule you should know that the IRS wants to make everybody responsible that they can so they can fully collect the tax. IRS will do their best to force the issue on trust fund recovery penalties.
Their philosophy, set up everybody for this tax, the more responsible, the merrier.
Call us today and we will review your case and let you know exactly where you stand and let you know how to get the best possible results.
How IRS will Work the Case
1. Regardless of the amount of the trust fund, revenue officers will make a reasonable attempt to collect the entire liability in full. IRS will conduct a full asset search of the company including bank statements reviewing individual and personal and corporate income tax returns and do a full asset search.
2. Potential for additional liabilities from unfiled returns, IRS will conduct a full compliance check on both business and individuals.
3. IRS will conduct the Taxpayer’s history of non-compliance that extends beyond the open balance due accounts.
4. Responsible person’s history of employment tax non-compliance. IRS will want to know if you are repeat offender. Sometimes repeat offenders are refer to the criminal investigation unit for criminal enforcement.
Some of the determining factors used to find individuals liable for this penalty are as follows:
1. Which individuals determine financial policy?
2. Which individuals authorize payment of bills?
3. Which individuals opens or closes bank accounts?
4. Which individuals signs checks?
5. Which individuals authorizes payroll?
6. Which individuals makes tax deposits?
7. Which individuals sign tax returns?
8. Which individuals oversee the hiring & termination of employees?
9. Which individuals run business on a day-to-day basis?
The IRS will review these answers based on sufficient documentation.
Additional Actions IRS will Consider for the trust fund
The goal of IRS is to collect the money in full many times taxpayers trying to wiggle away at around this tax and start moving assets around. the IRS knows the tricks and secrets that are used by taxpayers and will do a full investigation to find out if this is the case.
1. Certain facts may surface indicating that transfers of corporate stock and/or capital assets have occurred. If this is the case, in addition to pursuing the TFRP, consider recovery of the unpaid corporate liability by recommending:
• Transferee assessment
• Suit to establish a transferee liability
• Suit to set aside a fraudulent transfer
• Examination referral
How the Trust Fund Recovery Interviews and Investigations take place.
1. During the initial contact with the taxpayer the revenue officer will attempt to conduct interviews with potentially responsible persons. The revenue officer will take the following actions during the interview:
A. IRS must Provide Publication 1, Your Rights as a Taxpayer, and document in the history the publication was delivered.
B. Explain the TFRP to the taxpayer.
C. IRS will present a copy of the TFRP calculation (Page 4 of Form 4183) Pre-Contact) to all potentially responsible persons and advise them the IRS can personally assess the TFRP against those it determines liable for the penalty for the unpaid trust fund amount and collect the liability from their personal income and assets.
D. Provide Notice 784, Could You Be Personally Liable for Certain Unpaid Federal Taxes?, to the person interviewed and provide sufficient copies of Notice 784 to allow distribution to all other persons associated with the business who, based on the interview and other preliminary investigation, may be liable.
E. Advise the person(s) being interviewed of the proper actions to take to avoid such liability.
F. Begin asking questions and securing core documentation items Evidence That May Support Recommendations) from the taxpayer in support of assertion of the penalty.
If the documents are not secured, establish deadlines for the information and documents.
G. Attempt to secure at least one Form 4180, Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes, from a potentially responsible person Evidence That May Support Recommendations).
Note:
Secure additional Forms 4180 from all potentially responsible persons to the extent possible.
What about the IRS Form 4180, IRS use:
Is the form to be used for conducting TFRP interviews.
It is intended to be used as a record of a personal interview with a potentially responsible person. During the initial contact, attempt to personally secure the form from potentially responsible persons.
2. The purpose of the personal interview and completion of Form 4180 is to secure direct, detailed information regarding the individual’s or other person’s involvement in the business in order to determine if he or she meets the criteria for responsibility.
3. IRS will not give or mail Form 4180 to the potentially responsible person(s) or representative for completion by that person or for review prior to the interview. The form must be completed in person or over the phone.
4. A summons may be necessary to require the potentially responsible person’s presence at the interview. IRS will deliver form 2039 in person to the taxpayer.
5. After the IRS revenue officer takes the 4180 interview and during the process they will be securing information from third parties, reviewing bank signature cards, review corporate resolutions, review financial statements and after speaking to a number of people they will make a determination as to those persons who are responsible.
As I said earlier in my blog , it is in your best interest to hire a true tax professional to walk you through this process.
If you think in any way shape or form you have questions as to your responsibility call us today for a free initial tax consultation and we will let you know if you should pursue the assessment or the appeal process.
How the Trust Fund Tax Works + Former IRS + Trust Fund Help
by Jim Magary | Apr 4, 2016 | Tax Help
Former IRS Agents & Managers can settle your IRS Payroll Tax Debt, over 65 years of former IRS work experience. We Know the system, since 1982. *AFFORDABLE*
We have over 65 years of working directly for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service.
We know all the systems, settlement formulas and all the methodology to get you affordable IRS tax debt relief including trust fund debt problem. Do not fool around with IRS payroll tax debt.
Call us for a Free Consult. 1-866-700-1040
Here the truth from Former IRS Agents who have worked thousands of cases. We are the affordable professional firm.
Being a former IRS agent and teaching instructor you should understand that the Internal Revenue Service is tougher on payroll taxes than any other taxes.
The reason for this is very simple, this tax is money held in trust in not an actual tax.
It is one of few taxes that the Internal Revenue Service not only go after the company it can in addition can go after the responsible persons or individuals.
After the IRS creates individual tax assessment for those responsible it often time results in the filing of federal tax liens, bank and wage levy garnishments.
This is a tax that you should not fool around with because it is number one on the IRS to hit list. The Internal Revenue Service will individually engage those responsible under section 6672 of the Internal Revenue Code
Let Former IRS agents and managers get you immediate tax relief via a payroll tax settlement.
We should be able to make sure we can reach a reasonable settlement on your payroll tax liability and you can continue to operate your business without fear and worry from the Internal Revenue Service.
With over 60 years of direct working experience at the Internal Revenue Service we know every possible tax solution that can get you immediate and permanent tax relief for a payroll tax settlement.
IRS does not want to seize your business for back taxes due on payroll taxes, however 941 payroll taxes are a big concern for the IRS.
The Process of receiving a Payroll Tax DEBT Settlement
The Internal Revenue Service will want to fully review your company or corporation before you can obtain in IRS payroll tax settlement.
You will need to provide IRS with the current financial statement along with proof that all payroll tax deposits and 941 tax forms have been filed.
Many times IRS will want a personal or individual financial statement for more responsible persons. For most company’s of the IRS payroll tax settlement may come in three forms.
Review your current financial statement Internal Revenue Service may determine that you are a:
1. hardship candidate,
2. monthly payment agreement candidate,
3.or an offer in compromise candidate and IRS payroll settlement.
Why have Fresh Start Tax contact the IRS:
You never have to talk with the Internal Revenue Service on these PAYROLL TAX DEBT tax matters;
Fresh Start Tax knows what the IRS is looking for;
Fresh Start Tax knows the exact packaging required;
Fresh Start Tax knows the next steps the IRS will take;
You know your case will be handled and resolved as fast as possible.
Other Factors To Consider
IRS has the right to sell your complete inventory at public auction;
IRS can seize all your accounts receivables;
IRS can hold you personally responsible for this tax;
IRS has the right to lock the doors of your business.
Steps to take to work out an affordable payment plan with the Internal Revenue Service:
Immediately stay current on all payroll tax deposits to show the IRS good faith;
Be prepared to give the IRS a current financial statement;
Make sure your personal tax liabilities are filed and paid;
Have all documentation on the financial statement prepared for the IRS.
If you do not pay your Payroll Taxes IRS can collect them from you individually
To encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP.( trust fund recovery penalty )
These payroll taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount.
The TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business.
The business does not have to have stopped operating in order for the TFRP to be assessed
Who Can Be Responsible for the TFRP, that is the individual tax debt?
The TFRP may be assessed against any person who:
Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
Willfully fails to collect or pay them.
A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.
This person may be: (but not limited too )
An officer or an employee of a corporation,
A member or employee of a partnership,
A corporate director or shareholder,
A member of a board of trustees of a nonprofit organization,
Another person with authority and control over funds to direct their disbursement,
Another corporation or third-party payer,
Payroll Service Providers (PSP) ore responsible parties within a PSP
Professional Employer Organizations (PEO) or responsible parties within a PEO, or
Responsible parties within the common law employer (client of PSP/PEO).
For wilfulness to exist, the responsible person:
Must have been, or should have been, aware of the outstanding taxes and either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).
Using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness. You will be asked to complete an interview in order to determine the full scope of your duties and responsibilities.
Responsibility is based on whether an individual exercised independent judgment with respect to the financial affairs of the business.
An employee is not a responsible person if the employee’s function was solely to pay the bills as directed by a superior, rather than to determine which creditors would or would not be paid.
Figuring the Trust Fund Amount for responsible individuals
The amount of the penalty is equal to the unpaid balance of the trust fund tax. The penalty is computed based on:
The unpaid income taxes withheld, plus
The employee’s portion of the withheld FICA taxes. For collected taxes, the penalty is based on the unpaid amount of collected excise taxes.
Assessing the TFRP. If the IRS determines that you are a responsible person, we will provide you a letter stating that we plan to assess the TFRP against you. You have 60 days (75 days if this letter is addressed to you outside the United States) from the date of this letter to appeal our proposal.
The letter will explain your appeal rights. Refer to Publication 5, Your Appeal Rights and How to Prepare a Protest if You Don’t Agree (PDF), for a clear outline of the appeals process. If you do not respond to our letter, we will assess the penalty against you and send you a Notice and Demand for Payment.
Once we assert the penalty, the IRS can take collection action against your personal assets. For instance, we can file a federal tax lien or take levy or seizure action.
IRS Payroll Tax Debt + Settle Payroll Tax Debt + 1-866-700-1040
by Jim Magary | Apr 4, 2016 | Tax Help
If you haven’t filed back employment taxes contact us today about filing, settling and having former IRS agents represent your best interest.
We have over 206 years professional tax experience and over 65 years of working directly for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service.
As former IRS agents and managers, advisors, and teaching instructors.
Let our years of experience work for you and be your best ally, file back 941,940, Employment payroll tax and settle your debt with Internal Revenue Service..
You will never have to speak to IRS.
If you are having problems with back unfiled employment payroll taxes and need to file past-due tax returns contact us today so we can make this a quick, simple and affordable process to resolve your payroll tax problems.
As a former IRS agent, the federal government puts payroll taxes as a high priority on their list of targets.The reason is simple, payroll taxes are not a tax they are in fact monies are held in trust for the federal government.
When a case is in the field, the IRS Service centers send out what are known as FTD alerts those are corporations in the area we the IRS offices are located that have not filed their current federal tax deposits. The local IRS offices will make sure payroll tax cases are worked well before individual tax cases.
IRS can hold individuals responsible for the failure to pay back payroll taxes (unfiled, multiple payroll tax returns )
The IRS has a 6672 penalty which is imposed on persons or individuals who have not filed and paid back payroll taxes. IRS has the right to assess, collect and sees those assets belonging to those parties were responsible to collect the money and turn it over to the Internal Revenue Service.
If you have not paid back payroll taxes and your signature on the bank account of a particular company or corporation you may be held responsible to pay these back taxes. You should contact us today for further details.
How the Process Works of unfiled back unemployment taxes
If you haven’t filed back 941 payroll employment taxes with or without records we can prepare your back tax returns. we have been doing it for years as former IRS agents and private practice. There is a very fast easy and seamless system.
We will send a power of attorney to the Internal Revenue Service letting them know that they may only contact us on your behalf.
We will take a business and personal financial statement and work out the details with you on your individual case. You will need to provide Internal Revenue Service with both financial statements.
Most taxpayers are unaware that the Internal Revenue Service can set up the trust fund penalty against responsible individuals under section 6672.
What that means is the IRS will pass on part of the tax to you as an individual if you are responsible for trust fund taxes.
Who Can Be Responsible for the Trust Fund Taxes, code section 6672?
The trust fund recovery penalty may be assessed against any person who:
Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes; and
Willfully fails to collect or pay them
A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes.
This person may be or had some of the following powers:
An officer or an employee of a corporation;
A member or employee of a partnership;
A corporate director or shareholder or member;
A member of a board of trustees of a nonprofit organization, or anyone deemed to be responsible;
Another person with authority and control over funds to direct their disbursement.
For wilfulness to exist, the responsible person:
Must have been, or should have been, aware of the outstanding taxes; and
Either intentionally disregarded the law or was plainly indifferent to its requirements (no fraudulent intent or bad motive is required).
If you do not file , IRS can prepare these tax returns under 6020 B of the Internal Revenue Code
(a) Preparation of return by Secretary
If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary may prepare such return, which, being signed by such person, may be received by the Secretary as the return of such person.
(b) Execution of return by Secretary
(1) Authority of Secretary to execute return
If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefore, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
(2) Status of returns
Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.H
Haven’t filed back employment taxes 941’s, 940s, call us today for a free initial tax consultation and we will walk you through the process of unfiled 941 payroll taxes.
When you call our office you will speak to a true IRS tax expert.Since 1982 we’ve been true tax expert for those who have IRS payroll and individual tax problems.
Haven’t Filed Back Employment Taxes 941, 940 + Payroll Tax Problems
by Jim Magary | Apr 4, 2016 | Tax Help
Unfiled Back 941 Payroll Taxes, File and Settle all at one time. Former IRS Agents know the system, Since 1982, AFFORDABLE
We have over 206 years professional tax experience and over 60 years of working directly for the Internal Revenue Service in the local, district, and regional tax offices of the Internal Revenue Service.
As former IRS agents and managers, advisors, and teaching instructors. Let our years of experience work for you and be your best ally, file back 941 payroll tax and settle your debt with Internal Revenue Service..
You will never have to speak to IRS.
If you are having problems with back unfiled payroll taxes and need to file multiple past-due tax returns contact us today so we can make this a quick, simple and affordable process to resolve your payroll tax problems.
As a former IRS agent, the federal government puts payroll taxes as a high priority on their list of targets.
The reason is simple, payroll taxes are not a tax they are in fact monies are held in trust for the federal government.
When a case is in the field, the IRS Service centers send out what are known as FTD alerts those are corporations in the area we the IRS offices are located that have not filed their current federal tax deposits. The local IRS offices will make sure payroll tax cases are worked well before individual tax cases.
IRS can hold individuals responsible for the failure to pay back payroll taxes (unfiled, multiple payroll tax returns )
The IRS has a 6672 penalty which is imposed on persons or individuals who have not filed and paid back payroll taxes. IRS has the right to assess, collect and sees those assets belonging to those parties were responsible to collect the money and turn it over to the Internal Revenue Service.
If you have not paid back payroll taxes and your signature on the bank account of a particular company or corporation you may be held responsible to pay these back taxes. You should contact us today for further details.
How the Process Works
If you have back and unfiled back 941 payroll taxes with or without records we can prepare your back tax returns.
We will send a power of attorney to the Internal Revenue Service letting them know that they may only contact us on your behalf.
We will take a business and personal financial statement and work out the details with you on your individual case. You will need to provide Internal Revenue Service with both financial statements.
Most taxpayers are unaware that the Internal Revenue Service can set up the trust fund penalty against responsible individuals under section 6672.
What that means is the IRS will pass on part of the tax to you as an individual if you are responsible for trust fund taxes.
Who Can Be Responsible for the Trust Fund Taxes, code section 6672
The trust fund recovery penalty may be assessed against any person who:
Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes; and
Willfully fails to collect or pay them
A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be or had some of the following powers:
An officer or an employee of a corporation;
A member or employee of a partnership;
A corporate director or shareholder or member;
A member of a board of trustees of a nonprofit organization, or anyone deemed to be responsible;
Another person with authority and control over funds to direct their disbursement.
For wilfulness to exist, the responsible person:
Must have been, or should have been, aware of the outstanding taxes; and
Either intentionally disregarded the law or was plainly indifferent to its requirements (no fraudulent intent or bad motive is required).
If you do not file , IRS can prepare these tax returns under 6020 B of the Internal Revenue Code
(a) Preparation of return by Secretary
If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary may prepare such return, which, being signed by such person, may be received by the Secretary as the return of such person.
(b) Execution of return by Secretary
(1) Authority of Secretary to execute return
If any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefore, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
(2) Status of returns
Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.
Call us today for a free initial tax consultation and we will walk you through the process of unfiled 941 payroll taxes. When you call our office you will speak to a true IRS tax expert.
Unfiled 941 Payroll Taxes + File & Settle, Affordable Former IRS
by Jim Magary | Mar 31, 2016 | Tax Help
Unpaid 941 Trust Fund Taxes Representation by former IRS agents and teaching instructors.
We Know the Best 941 Penalty Trust Fund Defenses.
Your best source of tax defenses can be provided by former IRS agents and managers who know all the systems, methodologies, and that’s possible tax defenses. we have worked hundreds upon hundreds of cases.
Were true experts and specialists in trust fund penalty defenses and any 941 tax problems.
We have over 65 years of direct IRS work experience in the local, district, and regional tax offices of the Internal Revenue Service. We have over 206 years of professional tax experience and are A+ rated by the Better Business Bureau.
Some on are our staff were former IRS revenue officers, supervisors and teaching instructors who worked the trust fund recovery programs at the Internal Revenue Service.
You will have the aid of our expertise in the matters in knowing the inside secrets of the trust fund penalty investigation and the interview itself.
If you have unpaid 941 taxes
As a former IRS revenue officer I have worked hundreds upon hundreds of cases in which corporations have on paid 941 taxes. If your business is currently operating, the Internal Revenue Service will ask for a business financial statement on form 433B and ask for full documentation of all income, all assets and all expenses.
The goal of the IRS is to have to pay the money in full but realistically many companies or corporations that get behind on unpaid 941 taxes cannot make payments in full and will wind up on an installment agreement or have their case put into a current hardship.
During the course of the investigation, the Internal Revenue Service will look to set up the trust fund penalty against responsible persons whose job it was to pay the tax.
fill out a 4180 tax form. please see my comments below regarding the 4180. No person should give that 4180 form to the IRS unaided without the help of a tax professional.
IRS has the right in the ability to have the company make back payments to the unpaid 941 taxes as well as those responsible for the trust fund tax to make payments also. If this is the case you may want to call us today for free initial tax consultation.
IRS will also ask for personal financial statements for those they may deem responsible.
The best approach to ending your IRS unpaid taxes is to have an exit strategy. There are three different exit strategies we will discuss with you upon your initial consultation.
What is the The Trust Fund Tax Liability
A trust fund tax is money withheld from an employee’s wages (income tax, social security, and Medicare taxes) by an employer and held in trust until paid to the Treasury.
When you pay your employees, you do not pay them all the money they earned. As their employer, you have the added responsibility of withholding taxes from their paychecks. The income tax and employees’ share of FICA (social security and Medicare) that you withhold from your employees’ paychecks are part of their wages you pay to the Treasury instead of to your employees.
Your employees trust that you pay the withholding to the Treasury by making Federal Tax Deposits (PDF). That is why they are called trust fund taxes.
Through this withholding, your employees pay their contributions toward retirement benefits (social security and Medicare) and the income taxes reported on their tax returns. Your employees’ trust fund taxes, along with your matching share of FICA, are paid to the Treasury through the Federal Tax Deposit System.
The withheld part of these taxes is your employees’ money, and the matching portion is their retirement benefit. For additional information, refer to Employment Taxes and the Trust Fund Recovery Penalty (TFRP).
Congress has established large penalties for delays in turning over your employment taxes to the Treasury. The longer it takes to pay that money, the more it will cost you.
The trust fund tax liability in fact is not a tax but it is a pass-through liability because employers did not pay the required withholding and Social Security to the Internal Revenue Service.
Under 6672 of the Internal Revenue Code the IRS has the right to pass through a taxable withholding and one half of the social security amount to the individual or persons that should have been held responsible for this penalty.
The goal of the Internal Revenue Service is to have as many persons responsible for this penalty because that will provide the best chance to collect the money.
The IRS philosophy is, the more the merrier.
A seasoned IRS revenue officer will conduct the investigation and many times want a face-to-face meeting with the person or persons they believe are responsible for the tax.
In days past you used to be able to send the 4180 form out but now is an IRS requirement that they fill out the form themselves.
it does not take long for revenue officer to make a determination as to who is responsible. after spending a couple of hours on the case when the dust settles determinations are easy to make.
It’s all about control, who had the power and who control the money and who made decisions.
No matter what your duties were within a company or corporation there are always defenses.
As a general rule, the Internal Revenue Service will have certain documents available before the 4180 interview is held.
They will usually have bank signature cards, copies of checks and the corporate resolutions and many times will have the 4180 trust fund interviews of other persons that they think may be responsible. You want to make sure you are very truthful because IRS has done some due diligence before they call you when to the interview.
Bank signature cards and canceled checks are a great way that IRS has to determine who they think is responsible.
As a general rule, whoever has the power over the money has the right to make decisions. Many times are to direct decision-makers that are set up for the trust fund penalty.
There are many cases were secretaries and employees have been trusted by management to make these decisions and often time these are great tax defenses.
Do not be bullied by the Internal Revenue Service by making them think you are responsible for trust fund liabilities.
The revenue officer interview of the 4180.
As a former IRS agent and teaching instructor I would train new IRS employees on how to conduct the 4180 interview. One of the major teaching points was to secure documents ahead of time so you had some knowledge of the company, corporation and its persons. It was one of the fastest and quickest ways to know if an employee was lying.
Many times when we interviewed employees they said they knew nothing about the company yet answered all the questions. I would urge those taking the interview to answer unknown or I don’t know and not to guess. Sometimes guessing shows that you may have had actual knowledge of what was going on.
Each case is different and every facts are different and are uniquely shaped by the events.
It is best to have a seasoned and trained representative who knows the system go through the 4180 interview go over the questions and make sure your answers are both truthful and honest and provide your best defense.
Here are the questions the IRS revenue officer may focus on:
Did you determine the financial policy for the business?
Did you direct or authorize payment of bills?
Did you open or close bank accounts for the business?
Did you guarantee or co-sign loans?
Did you sign or countersign checks?
Did you authorize or sign payroll checks?
Did you authorize or make federal tax deposits?
Did you prepare, review, sign, or transmit payroll tax returns?
Who would you hold as being directly responsible for these taxes?
Did you have ownership of this business?
This forms the basis for their initial questions but will ask many more.
The Statute of Limitations on Trust Fund Assessment
Pursuant to IRC 6501(b)(2), employment tax returns filed for any period ending within a calendar year are considered filed on April 15 of the succeeding year.
Employment tax returns for all four quarters of 2007 are considered filed on April 15, 2008.
The IRS has three years (beginning April 15, 2008 and ending on April 15, 2011) to complete its trust fund investigation for the 2007 returns.
WATCH OUT Single Member L L C’s
The owner of a single member limited liability company who is taxed as a disregarded entity and files a Schedule C (Profit or Loss from Business) will be held responsible for both trust and non-trust fund payroll taxes.
For any payroll tax liability resulting from wages paid before January 1, 2009, the owner of the LLC (rather than the LLC itself) is considered the taxpayer for payroll tax purposes.
The IRS collection of all unpaid employment taxes from the owner of a single member LLC was recently litigated and upheld by the U.S. Tax Court in Medical Practice Solutions, LLC v. Commissioner, 132 T.C. 7 (2009).
There is no trust fund recovery penalty process for a single-member LLC.
If you have any questions regarding the trust fund penalty call seasoned and experienced IRS revenue officer’s who can help provide your best trust fund tax defense.
Unpaid 941 Taxes + Trust Fund Tax Penalty Help/ Adviser + Former IRS
