The Form 4180 Interview: What the Revenue Officer Is Really Asking

A Revenue Officer calls. The business is behind on Form 941 deposits. They want to "sit down and go over a few things." Maybe they want to meet at the office. Maybe they want to do it over the phone right now.

What they want is a Form 4180 interview. And what you say in that interview will likely be the single most important piece of evidence in any Trust Fund Recovery Penalty case against you.

What Form 4180 Is

Form 4180 is titled Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes. IRM 5.7.4.2.4 describes it as the form used for conducting TFRP interviews, intended as a record of a personal interview with a potentially responsible person.

The IRM is candid about the purpose. The interview is meant to secure direct, detailed information about your involvement in the business to determine whether you meet the criteria for responsibility and willfulness, the two elements of liability under IRC 6672. The questions on the form are a guide, not a limit. The Revenue Officer can ask more.

In other words: this is not a financial intake form. It is a liability interview.

How the IRS Runs It

The IRM tells Revenue Officers exactly how to handle Form 4180, and knowing those rules helps you prepare.

• You do not get the form in advance. IRM 5.7.4.2.4 says the Revenue Officer should not give or mail Form 4180 to the potentially responsible person or representative to complete or review before the interview. It must be completed in person or over the phone.
• It can be scheduled by letter. The IRM references Letter 3586, Meeting Scheduled with Individual for TFRP Interview.
• It can be compelled. The IRM notes a summons may be necessary to require a potentially responsible person's attendance.
• "Unknown" is an allowed answer. If you cannot answer a question, the Revenue Officer enters "unknown." If it does not apply, "not applicable."
• It is designed to scale. Page 1 holds the core responsibility and willfulness questions. In a simple business with one obvious decision maker, page 1 may be the whole interview. If you say others had authority, or that a payroll service provider was involved, the form directs the Revenue Officer into additional sections.
• You sign it. After the interview, you are asked to sign. The Revenue Officer signs too. The IRM says to give you a copy when feasible. Ask for it.
• It can be corrected. A statement can be updated later, with the changes initialed by the Revenue Officer and you.

What Comes With the Interview

Under IRM 5.7.4.2.3, during the initial contact the Revenue Officer is supposed to:

• give you Publication 1, Your Rights as a Taxpayer;
• explain the TFRP;
• show you the TFRP calculation and the ATFR calculation sheet breaking down transactions by period;
• give you Notice 784, Could You be Personally Liable for Certain Unpaid Federal Taxes?, plus copies for other people associated with the business who may be liable; and
• advise you of the proper actions to take to avoid liability.

IRM 5.7.4.2.4 adds that Notice 609, Privacy Act Notice, should be provided during the interview.

That last bullet on the first list matters. The Revenue Officer is supposed to tell you how to avoid liability. Usually that means paying the trust fund portion on behalf of the business, or making sure current deposits are made. Our guide to designating payments to trust fund taxes explains how to do that correctly.

Your Rights in the Room

IRC 7521 gives you real protections in any IRS interview about the collection of tax.

The right to stop and get help. Under section 7521(b)(2), if you clearly state at any time during an interview that you want to consult with an attorney, CPA, enrolled agent or other authorized representative, the IRS employee must suspend the interview, even if you have already answered some questions. IRM 5.7.4.2.3 repeats this instruction for TFRP interviews. The exception in the statute is an interview initiated by an administrative summons.

The right to send your representative. Under section 7521(c), a representative with a written power of attorney can represent you in the interview, and the IRS may not require you to accompany the representative unless you have been summoned. As a practical matter, though, the Form 4180 is about your personal knowledge, and many Revenue Officers will want to hear from you directly. That is a discussion to have with counsel before the meeting, not during it.

The right to record. Section 7521(a) lets you make an audio recording of an in-person interview, at your own expense, if you request it in advance.

The right to an explanation. Section 7521(b)(1) requires the IRS to explain the collection process and your rights before or at an initial in-person collection interview.

What They Will Ask About

You will not see the form beforehand, but the IRM tells you what the Revenue Officer is trying to establish. IRM 5.7.3.4.1 says a responsible person has the duty to perform, the power to direct the act of collecting trust fund taxes, accountability for and authority to pay trust fund taxes, and authority to determine which creditors will or will not be paid. It directs Revenue Officers to identify who:

• are officers, directors, or shareholders;
• hire and fire employees;
• exercise authority to determine which creditors to pay;
• sign and file employment tax returns, such as Form 941;
• control payroll and disbursements;
• control the voting stock; and
• make federal tax deposits.

On willfulness, the focus is knowledge and choice. When did you learn the taxes were not being paid? After you knew, who got paid? IRM 5.7.3.4.2 says willfulness requires that a responsible person was aware, or should have been aware, of the outstanding taxes and either intentionally disregarded the law or was plainly indifferent to its requirements.

Expect questions about bank accounts, signature authority, online banking credentials, payroll service providers, and specific payments made during the quarters at issue.

The Interview Is Only Part of the Evidence

IRM 5.7.4.2.7 lists the core evidence that usually supports a TFRP recommendation: Form 4180 interviews, articles of incorporation, bank signature cards or electronic PIN and password assignment information, and a sampling of canceled checks, or bank statements for electronic payments, showing other creditors were paid in preference to the government.

Notice what that means. The Revenue Officer will compare what you say against signature cards and checks. If you say "I never signed checks" and the bank produces checks with your signature, your credibility on everything else just took a hit. IRM 5.7.6.7.1 even uses that example to illustrate a protest that raises no new information.

Accuracy beats advocacy in the interview. Save the arguments for later.

Do Not Sign Form 2751 in the Same Meeting

Sometimes a Revenue Officer will ask whether you agree to the proposed assessment and offer Form 2751 for signature during or right after the interview. IRM 5.7.4.2.4 contemplates exactly that. It also says a Form 4180 interview must still be completed even if the person signs Form 2751, and that the signature does not extinguish appeal rights until the response period after Letter 1153 has passed.

Even so, do not sign on the spot. You have not seen the computation in detail. You have not reviewed the bank records. You do not know whether other people will also be assessed. There is no advantage to agreeing in the room that you cannot get later.

How to Prepare

1. Get representation before the interview, not after. Have a Form 2848 that covers you individually for the Trust Fund Recovery Penalty, separate from any authorization for the business.
2. Reconstruct the timeline. When did you start? What was your title? When did your authority change? When did you first learn deposits were missed? What did you do?
3. Pull your documents. Bylaws, operating agreement, minutes, signature cards, online banking user lists, payroll service contracts, emails about which bills to pay, resignation letters.
4. Identify others with authority. The IRM directs Revenue Officers to consider every potentially responsible person. If someone else made the payment decisions, say so plainly and be ready to show it.
5. Be precise. "I don't know" and "I don't remember" are acceptable answers when true. Guessing is not.
6. Ask for a copy. Before you leave, ask for a copy of the signed Form 4180.

Third Parties Will Be Interviewed Too

The Revenue Officer may also contact your bank, your bookkeeper, or former employees. IRM 5.7.4.2.5 requires advance notice, usually Letter 3164-A, before those third-party contacts. Our guide on third-party contacts and summonses in TFRP investigations explains that process and your rights.

For a general overview of how the firm approaches payroll tax investigations, visit the main site's payroll tax page.

The Form 4180 interview feels routine to the Revenue Officer. It should not feel routine to you. Prepare for it as carefully as you would prepare for a deposition. Call (813) 229-7100 before the interview is scheduled. Let's talk.