Responsible Persons Representation

If you own or work for a company that owes payroll taxes, you may be help personally liable.

In addition to holding a company liable for unpaid payroll taxes, the IRS will hold any person or persons that they determine to have “willfully” chosen to not remit the payroll withholding amounts when due (see Trust Fund Recovery Penalty ).

In creating their “suspects” lineup, the IRS typically begins with the owners of the company and the persons listed in the company’s bank signature card.  The IRS will then broaden their scope to include other persons that willfully decided not to pay the withholding.

Once they compile a list, they conduct interviews to determine who is responsible.  These interviews are referred to as “4180 interviews” because the IRS uses Form 4180 to document the interviewees responses.  If the IRS determines a person was not responsible, they are off the hook personally for the Trust Fund portion due.

Deeming Who is Responsible

If on the other hand the IRS determines a person to be responsible, they will assess the Trust Fund portion of the liability in the form of a Civil Penalty.  Once the determination has occurred, the responsible person has a limited amount of time to appeal the determination before it becomes final.  Once the assessment becomes final, the responsible person is held personally liable.  If this is the case with you, there are other alternatives that may be exercised to address the Civil Penalty assessment including an installment agreement or offer in compromise.

We Can Help

The Tax Resolution Institute has been successful in limiting the amount of people held responsible stemming from 4180 interviews.  In addition, if it is obvious you are going to be considered responsible, we usually can get your company into an agreement and have the IRS leave you alone personally.

Read in detail about responsible person representation…

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