In our recent blog posts like Rush Tax Relief – Trust Fund Penalty and Rush Tax Relief – Trust Fund Penalty Responsibility, we’ve been discussing the Trust Fund Recovery Penalty, also known as the TFRP and why you may want to consider rush tax relief services if you’ve received a letter from the IRS notifying you that you that the TFRP will be assessed against you. The TFRP is a penalty that the IRS wields against a person, or several people, who were or are responsible for the financial decision making of a company and failed to properly pay the expected amount of outstanding trust fund taxes.
As we mentioned in one of our previous posts, Rush Tax Relief – Trust Fund Penalty Assessment, as of Dec. 24, 2020, on the IRS’s Trust Fund Taxes Page, they state that “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.” These trust fund taxes, also referred to as employment taxes or payroll taxes, are collected by a company throughout the year in the form of withholdings and must be paid to the IRS at the correct time and in the correct amount to avoid potentially facing the TFRP.
To determine if a person can be held liable for the financial decision making of a company, and thus eligible to be assessed against the TFRP, the IRS uses two factors in their determination: responsibility and willfulness. In our previous blog post, Trust Fund Penalty Responsibility, we discussed these two factors at length. During the Trust Fund Recovery Penalty Assessment Interview, also known as the 4180 Interview, the IRS will make that determination. In this blog post, we’ll discuss what you can do to avoid the 4180 Interview.
Avoiding the 4180 Interview
On our Trust Fund Penalty Assessment Interview Service Page, we discuss the two main scenarios: how to avoid the 4180 Interview if you’re liable and how to avoid the 4180 Interview if you’re not liable.
How to Avoid the 4180 Interview if You are Liable
From our 4180 Interview Page: “The best way to get out of the interview is to pay the bill and cancel the interview. You could also admit being liable by signing the Form 2751 (Proposed Assessment of Trust Fund Recovery Penalty) and then try to set up a payment plan or apply for a settlement. If the bill is under $25,000, the business should be able to pay it back over a 24-month period. Once a business sets up payments, you no longer have to worry about any personal assets being at risk.”
How to Avoid the 4180 Interview if Not Liable?
Continuing on our 4180 Interview Page: “If you are not responsible for the payment you can argue your liability. However this can be extremely difficult and it’s recommended to get a tax professional to assist you. Then, the tax professional will have to prove that you are not responsible for the unpaid tax even if you were involved with the company finances. Let’s say you accidentally signed off on a tax but you aren’t really liable, a tax professional can assist with that situation as well.”
As you can see, either way, you would probably be better off with the help of an experienced rush tax relief specialist by your side. If you are liable, the tax relief specialist can help you navigate the paperwork and the agreement with the IRS. If you are not liable, then it’s advised that you have a trained tax professional help you prepare to prove to the IRS that you were not responsible.
If you have received a letter of intent from the IRS regarding the TFRP, or you’re in the process of arranging your 4180 Interview, don’t hesitate to contact the team of tax resolution specialists at Bullseye Tax Relief today. We offer a free consultation and transcript analysis for new clients!