Tax Controversies: Understanding How to Navigate Disputes with the IRS and State Tax Authorities

What This Video Covers

When you receive a notice from the IRS or a state tax authority, it can feel overwhelming. In this video, our attorneys walk you through the fundamentals of tax controversies — from the initial notice stage through examination, appeals and, if necessary, litigation.

Key topics addressed include:

• What triggers an IRS or state audit
• The difference between correspondence audits, office audits and field audits
• Your rights as a taxpayer during an examination
• How the appeals process works and when it makes sense to pursue it
• The role of Attorney-Client Privilege in protecting your communications
• When a case may need to proceed to U.S. Tax Court

Why This Matters

Our firm has been handling these disputes since 1983. We have seen how early, informed action changes results — and how inaction compounds the problem. This video is designed to give you the foundational knowledge you need to make smart decisions at each stage of the process.

Video Transcription

Hi, I’m Benjamin Goldburd, and I’m a tax attorney, but I’m not a regular tax attorney. I’m a cool tax attorney. In under two minutes in my videos, I am going to try and explain to you not just how the tax code works, and not just how the IRS works when they are coming after you for a tax issue, but I’m also going to try and explain to you why you need a tax professional to help guide you through these matters. So clock starts now. We are going to go through in under two minutes how an IRS tax controversy starts.

Now, the IRS does not call you. They do not call you. They use snail mail in order to send you notices about an issue that they may have found. So that goes with whether you owe them money or whether there’s going to be an audit on your tax return, whether it be business or personal, they will not reach out by phone to you. So anyone that is reaching out to you by phone is a scammer. Unless you are already engaged with the IRS and have given them permission to contact you via phone, the IRS may though, show up at your door, but be sure that when they do show up at your door, you ask for ID and a card so that you can call them back — hopefully with a tax professional. Now, that’s not to say that every time somebody knocks on your door it is an IRS person that is legitimate. But, most of the time, scammers do things from afar so that they can be in the relative safety of different countries with no extradition.

So, why do you need a tax professional when the IRS reaches out to you, either by mail or by a visit? Well, the two things go hand in hand. Would you go and speak to the police without a lawyer if you did or didn’t do something wrong? No. Most of television has taught you by now that you do not speak to the police, or the FBI, or anyone without a lawyer present. So, why would you do so in a game with the IRS? I can assure you that the deck is stacked against you. The IRS is trained in the tax code and most people are not. Most taxpayers know the bits and pieces about their business that they’ve been told by their accountant or tax filer. They do not know the ins and outs. So you do want a tax professional to help guide you because you need equal ammunition against the IRS.

Now, what can happen in some of these situations? The IRS can ask for information that goes back at least six years. The IRS can keep coming back for more and more information on the things that you have filed asking you for your paperwork, your payroll information, your previous filed documents in other states, what have you, chits and chits of paper that you were supposed to have kept for six years or even more. Now, not having this is not an excuse. I can’t tell you how many times a client has come to us and said, “Well, we threw it out. We had a fire. We had a flood.” Most of these excuses are not good enough for the IRS. But, if you have a tax professional that can guide you through what information is critical in an IRS request, you will be able to then solve those missing issues when you come to submit information to the IRS, because you may have a lot of information that you don’t realize you have. For instance, your bank statements are easily accessible from your bank. Your credit card statements are easily accessible from your credit card institution. So while you may not think that you have as much information, being guided by a tax professional for what is acceptable as information to be given to the IRS is going to be critical.

So that’s it. Less than two minutes. Your introduction to the tax world and dealing with the IRS. We covered that: the IRS will ask you a lot of questions, they will ask you for a lot of documentation, they can show up at your door but they will not call you, and they will mostly use the mail. But the most important part is that as soon as you are contacted by the IRS, or any other state tax agency, call a tax professional immediately so that you don’t have the case stacked against you.

About the Presenter

Frequently Asked Questions About Tax Controversies