Representation when a taxing authority questions a return: examinations, administrative appeals, penalty defense, and tax litigation, handled with the same care before the IRS and before a state authority.
The IRS generally has three years from filing to assess additional tax, six if a quarter of gross income was omitted, and forever if no return was filed. An examination that nears that date brings a request to extend it, and whether to sign, or to sign a consent limited to the issues under review, is the first decision in the case.
A thirty-day letter opens the protest to the Independent Office of Appeals, where hazards of litigation are weighed for the first time. A notice of deficiency starts ninety days to petition the Tax Court without paying; after that the only route to court is to pay, claim a refund, and sue. An accuracy penalty cannot be assessed without a supervisor's written approval, reasonable cause defeats most, and first-time abatement covers late filing and payment for a taxpayer with three clean years.
We represent clients in matters before the IRS and before state and local taxing authorities; the taxpayer is the client. The file built at the first document request is what Appeals and the court will read, so we build it for them.
Representation through IRS examinations and state audits, managing the scope of the inquiry, organizing the records the examiner is entitled to, and handling communications so the matter stays on a defined track.
Pursuit of administrative appeals within the agency when a proposed adjustment is wrong on the law or the facts. This is the stage at which most disputes are narrowed or resolved before any case reaches court.
Litigation of contested tax matters in the United States Tax Court and other forums where a principled disagreement cannot be settled, with the case built from the record developed during the examination.
Defense and abatement of penalties on reasonable-cause, defensible-position, and first-time bases, and review of the interest that accompanies them, because the dispute is rarely about the underlying tax alone.
Structuring of resolutions that fit the facts: conceding or narrowing adjustments, settling at appeals, installment agreements, and offers in compromise where the criteria are met.
Counsel on voluntary disclosure where a reporting gap exists, weighing the available programs against the facts so a problem is addressed on the taxpayer's terms rather than the agency's.
Representation in matters before state and local taxing authorities, which run their own examination, appeal, and hearing procedures, coordinated with the federal posture when a transaction draws scrutiny at more than one level.
Handling of collection actions, liens, and levies, and resolution of the compliance questions that surface alongside a controversy, so the matter is closed without leaving open exposure.
An Information Document Request has a response date. We answer it in writing, with the documents it names and a cover letter that records what was produced and what was withheld as privileged. Conversations with the examiner are not the record; the IDR responses are, and Appeals reads them a year later.
The examiner may not consider the hazards of litigation; Appeals must. A protest that argues the law and the facts the way a brief would, with the record attached, gives Appeals the material to settle on a percentage rather than send the case back for more development. That is where most contested adjustments are resolved.
An accuracy-related penalty is twenty percent of the underpayment, and it fails if the examiner's supervisor did not approve it in writing or if the taxpayer acted with reasonable cause and in good faith, which reliance on a qualified adviser who had the full facts can establish. We ask for the approval form every time.
Ninety days from a notice of deficiency to petition the Tax Court, one hundred fifty if it is addressed abroad. Thirty days from a lien or levy notice to request a collection due process hearing. Two years from a disallowed refund claim to sue. None of these moves for a phone call.
When an IRS adjustment becomes final, Illinois requires an amended return reporting it within 120 days, and the state's own assessment window reopens for that change. A settlement at Appeals is therefore priced against both bills. We run the state consequence before signing the federal closing agreement, not after the notice arrives from Springfield.
The statutory privilege for accountants covers noncriminal matters before the IRS and in federal court; it does not reach another agency or tax shelter promotion. Where a matter may escalate, we retain the accountant through counsel under a Kovel agreement, so the analysis sits under the attorney-client privilege, which is not so confined.
The examination opens with a notice and Information Document Requests. We fix the scope in writing, weigh any statute-of-limitations extension the examiner requests on its own merits, and produce exactly what the IDR entitles the agent to see, with privilege decisions made before documents move, because this record becomes the case.
When the Revenue Agent's Report proposes adjustments, the 30-day letter opens the administrative window. We answer with a written protest aimed at the IRS Independent Office of Appeals, where an officer weighing the hazards of litigation narrows or settles most disputes.
A statutory notice of deficiency forces the defining choice: petition the United States Tax Court within the deadline without paying first, or pay, claim a refund, and sue in district court or the Court of Federal Claims. Forum drives precedent, procedure, and the question of paying first.
Whether by stipulated decision, settlement, or judgment, the matter closes with penalties abated where reasonable cause supports it, interest verified, collection holds released, and the return positions ahead documented so the same issue does not reopen next cycle.
The case is won or lost in the file you build before anyone mentions court.
Read it for the years under examination, the issues listed, and the response date, and calendar the date before anything else. Do not call the examiner to explain. The response should be in writing, limited to what the notice asks, and sent only after someone has checked how close the assessment period is to closing, because a request to extend it is usually the next thing to arrive. Counsel involved at this stage has more to work with than counsel brought in at Appeals.
An audit or examination is the agency's review of a return. If you disagree with the proposed result, you can generally pursue an administrative appeal within the agency before any case reaches court. Tax litigation is the contested-court stage, which may proceed in the United States Tax Court or other forums depending on the issue and on when the tax is paid. Most matters are resolved at the examination or appeals stage, and litigation is the path when a principled disagreement cannot be settled.
Often, yes. Many penalties can be abated where there is reasonable cause, a defensible reporting position, or a first-time-abatement basis, and the strength of that argument depends on the facts and the documentation behind the original position. We assess which penalties are at issue, whether interest is also in play, and how to present the record so the request stands on its own.
Yes, and the two are rarely separable. Illinois requires a taxpayer to report a final federal change by amended return within 120 days, so a federal settlement reaches Springfield on its own schedule, and the Department of Revenue runs its own protest route, through the Illinois Independent Tax Tribunal for larger assessments and the Department's administrative hearings for smaller ones. We represent clients in both and settle the federal matter with the state consequence already computed.
Resolution can take several forms depending on the facts: conceding or narrowing specific adjustments, settling at appeals, entering an installment agreement, pursuing an offer in compromise where the criteria are met, or, where a disclosure gap exists, using a voluntary disclosure program. The right path depends on the merits of the position, the amount in dispute, and your broader objectives, and we help weigh those trade-offs before committing to one.
Accountants and counsel play complementary roles, and the two often work together. Counsel becomes important when the dispute turns on legal interpretation, when penalties or potential exposure are significant, when an appeal or litigation is on the table, or when the protection of the attorney-client privilege matters to how the matter is investigated and discussed. Bringing counsel in early generally preserves more options than waiting until a position has hardened.
Multi-state tax compliance, nexus analysis, and state and local tax controversy resolution for businesses operating across jurisdictions.
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Explore →Reviewed by Jonathan D. Herpy, Sr., Senior Partner · Last updated October 2026 · Educational overview · Not legal advice
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