Form 4180: the IRS trust fund recovery interview

The Trust Fund Recovery Penalty requires the IRS to prove that each person it assesses was responsible and willful. Form 4180 is the main tool for gathering that proof directly from the people involved. The revenue officer usually interviews every potentially responsible person — owners, officers, sometimes bookkeepers — and compares answers against bank records. Under IRM 5.7.4, the interview is expected wherever possible before a recommendation is made.

The form walks through:

• Your relationship to the business: title, ownership share, dates.
• Duties and authority: who signed checks, who determined financial policy, who hired and fired, who could authorize payroll.
• Knowledge: when and how you learned that deposits or returns were missed, whether you saw IRS notices.
• Payments: whether other creditors, net wages or loans were paid while taxes went unpaid, and who made those decisions.
• Other people involved and the business's banks.

It closes with a signature under penalty of perjury, so inaccurate answers create separate risk.

• Gather your timeline: when you joined, what authority you had and when it changed.
• Collect governing documents (operating agreement, bylaws, board minutes) and bank signature cards.
• Identify the date you first knew taxes were unpaid; it's often the pivot point for willfulness.
• Don't guess. "I don't know" or "I'll check records" is better than an inaccurate answer.
• Consider having a representative attend with a Form 2848. You can ask to reschedule to obtain one.

The revenue officer weighs all interviews and documents and recommends who should be assessed. If you're included, the IRS sends Letter 1153 proposing the penalty and offering 60 days to appeal. If the business can still pay, designating voluntary payments to trust fund taxes before assessment directly reduces what can be assessed against individuals.

You have the rights listed in Publication 1, Your Rights as a Taxpayer, including the right to representation and to challenge the IRS's position. The IRS can compel testimony with a summons, but a voluntary interview with a prepared representative is usually the better route. Use our business assessment if a revenue officer is already assigned to see which options may still be open.