As a former IRS Revenue Officer, I ran across a sizable number of Trust Fund Recovery Penalties cases. The Trust Fund Penalty can and can have a damaging influence on taxpayers who were found to be responsible to pay for these taxes. This short article deals with this issue and why?

It had been part of my job was to teach IRS Agents on determinations for the Trust Fund Recovery Penalty. The general rule is, " hold everyone and anyone responsible" by applying this process, the tax could eventually receives a commission in full. Though IRS won't ever admit to this process, the Agent will do exactly that, they will go after everyone they could for the Trust Fund Recovery Penalty. cyber forensics

When an IRS Agent gets a 941 Payroll or Trust Fund case on their schedule, the 1st thing the Agent does, is to create an on-site trip to the corporation, to ask the corporation for full payment. Often the corporation is out of business, and the Revenue Officer must track down responsible officers or those who were expected to pay for the payroll taxes to the IRS. After the IRS has made experience of at least one person who had been associated with the company, they will interview anyone by taking a detailed and lengthy interview with Form 4180 (Report of Interview with Individual Relative to Trust Fund Penalty)

A few of the determining factors used to get 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 predicated on sufficient documentation. IRS will contact banks for information such as bank signature cards, corporate resolutions, copies of checks.

Yet another acid test employed by the IRS Revenue Officer, is always to turn to see who signed checks and took distributions from the company- the bottom line is, follow the money trail.

When working with the Trust Fund Penalty, you need to be represented by a professional tax firm or representative.