If the IRS has you in their sights for the Trust Fund Recovery Penalty, then a revenue agent will seek a face-to-face meeting. The agent does this in the hope that he'll achieve a spoken or written interview. The IRS then uses your statements in the case against you throughout the process. So, be careful.

You may complete this interview on Form 4180: Report of Interview with Individual Relative to Trust Fund Recovery Penalty or Personal Liability for Excise Taxes.

Responses to the written interview should be thorough and concise. Above all, avoid revealing information that may lead the agent to believe that you’re responsible for the unpaid employment taxes.

Later, after the interview form is signed, the agent will send notices to the parties that they’ve deemed responsible for the unpaid employment taxes. Therefore, you’ll receive a notice if you were found responsible in full or in part.  It’ll explain the assessment and include a due date, as well as payment instructions.

If you’re partly responsible for the penalty, the IRS will demand just your part of the unpaid taxes and penalty. Likewise, if you’re wholly responsible, your demand for payment includes all the unpaid taxes and the 100 percent penalty.

Individuals certainly have the legal right to file an appeal by responding to the notice within 60 days. The individual along with his or her representative may submit the appeal, including a written response and supporting documentation.

Who can help me in my assessment for TFRP liability?

Every taxpayer has the right to have professional representation during the TFRP assessment interview. As a matter of fact, the written or in-person interview should be preceded with extensive preparation by the individual and his or her tax adviser.

Three types of tax professionals have unlimited representation rights with the IRS. These are certified public accountants, enrolled agents, and tax attorneys.

Tax attorneys have a unique skill set that serve taxpayers best in a court of law. A tax attorney makes sense for a defendant in tax court against an accusation of fraud, for example.

On the other hand, an enrolled agent focuses their duties primarily on tax matters. His or her perspective is one-dimensional. An enrolled agent is an appropriate choice for representation during a TFRP assessment.

Finally, certified public accounts have unlimited representation rights with the IRS. Many taxpayers choose to hire accountants with a specialty in tax relief for representation during a TFRP assessment. This tax adviser works in most areas of finance with a focus in tax. Therefore, he or she has a well-rounded perspective with a unique opportunity to maximize the defense of your case.

Regardless of which kind of representative you hire, verify credentials and reputation. In other words, if the tax adviser is an accountant, make sure his certification is current with the Board of Accountancy. Be sure to check in with the IRS about your enrolled agent’s standing.

In addition, confirm a quality reputation by looking at the tax professional’s Better Business Bureau profile. Also, be sure to verify that there are no complaints with their governing entity.