Salt Lake City, Utah – I have missed the last couple of days on posting about payroll tax issues. Why may you ask? Too much pickleball and bad knees. Why did that affect my ability to type? I don’t know, but it did. So, with that, back to pay roll taxes and when the IRS starts an investigation. If payroll tax issues exist with a taxpayer, the IRS Revenue Officer assigned to the taxpayer’s case will investigate the taxpayer to determine who was responsible for the company’s failure to pay the payroll taxes. The IRS uses IRS Form 4180 to investigate. The goal of IRS Form 4180 and the investigation is to identify who is responsible for the employer’s failure to pay the payroll taxes.
When we represent clients during a trust fund investigation, we never allow our clients to participate in the Form 4180 Interview. IRS Form 4180 has, over the years, become shorter and the questions loaded. As a tax attorney, we will complete the form with our clients and submit it, with the appropriate documents, so we can explain the answers. For example, in Section II, Letter C, the Yes/No question reads: “State whether you performed any of the duties/functions . . . prepare, review, sign, or authorize transmit payroll tax returns?” What if you prepared them but had no authority to sign them or send the payment? A “YES” answer could mean personal liability. Better to check “NO”, write in “See Attached” and submit the appropriate documents explaining the client’s role.
It is my experience, that it ends up being these small items that protect a taxpayer during the trust fund investigation. Tomorrow, I will explain the payroll liability assessment process.
Tax problems are legal problems, and we solve both. If you or someone you know has an issue with paying their federal or state taxes and needs help to end their IRS nightmare, please contact Kent Brown at Strong & Hanni by either phone at (801) 532-7080 or email at: kbrown@strongandhanni.com or go to my personal Strong & Hanni webpage at: https://strongandhanni.com/attorneys/attorney-kent-brown/
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