Tax Controversies in New York: Protecting Your Rights Against the IRS and State Authorities

August 26, 2025

Tax Controversies in New York: Protecting Your Rights Against the IRS and State Authorities

Facing a tax controversy can be one of the most stressful challenges for individuals and businesses. Whether you’re under IRS audit, dealing with civil tax disputes, or facing allegations of criminal tax violations, the consequences can be serious and long-lasting. Acting quickly — and with the right legal guidance — is critical.


At Auerbach Law Group, P.C., we help clients throughout New York confront tax controversies with clear strategies, strong advocacy, and a commitment to protecting both their rights and their financial future.


What Is a Tax Controversy?

A tax controversy arises whenever you have a dispute with the IRS or the New York State Department of Taxation and Finance. These disputes can take many forms, including:


  • IRS or state tax audits
  • Disputed tax returns or unpaid taxes
  • IRS collection actions, such as liens and levies
  • Civil tax violations and penalties
  • Criminal tax investigations or charges
  • Accusations of tax fraud or evasion


Because tax controversies often involve complex regulations and strict deadlines, working with an experienced attorney is essential.


Navigating the Complexities of Tax Disputes

Both individuals and businesses may encounter situations where the IRS or state tax authorities question filings or pursue collections. Some common examples include:


  • Eggshell Audits: Highly sensitive audits where even a small error can trigger serious consequences.
  • Appeals: Challenging the results of an IRS audit or other determination.
  • Collections: Addressing IRS collection efforts, including liens and wage garnishments.
  • Offers in Compromise (OIC): Negotiating to settle tax debt for less than the full amount owed.
  • Currently Not Collectible (CNC) Status: Temporarily halting IRS collection actions if you cannot afford to pay.
  • Forensic Accounting Investigations: Ensuring the accuracy of the government’s numbers and challenging inflated claims.


Without the right legal representation, taxpayers risk financial penalties, loss of assets, and — in the most severe cases — criminal charges.


Civil vs. Criminal Tax Controversies

Not all tax controversies are the same.


  • Civil Tax Controversies
    Typically involve unpaid taxes, penalties, or disputes over filings. The consequences often include fines, interest, and collection actions.
  • Criminal Tax Controversies
    Involve allegations of willful misconduct, such as tax fraud, evasion, or filing false returns. These cases can lead to severe penalties, including imprisonment.


At Auerbach Law Group, we represent clients in both civil and criminal tax matters, tailoring our defense to the seriousness of your case.


How Auerbach Law Group Protects You

Our approach is thorough, strategic, and focused on achieving the best possible outcome for each client. We provide:


  • Detailed case assessment to understand your unique situation
  • Defense strategies tailored to civil or criminal proceedings
  • Accurate financial analysis with the help of forensic accountants, when needed
  • Negotiation with tax authorities to reduce penalties or settle debts
  • Aggressive representation in state and federal tax disputes


With open communication and a focus on your peace of mind, our attorneys guide you through every step of the process.


Take Action Today to Protect Your Financial Future

The longer you wait to address a tax controversy, the more difficult the situation can become. Whether you’re facing an IRS audit, state tax investigation, or allegations of fraud, immediate action is your best defense.

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Filing a false tax return is a serious offense that can lead to severe penalties, including fines and imprisonment. However, individuals accused of this crime may have legal defenses that can help challenge the charges. Understanding these defenses is essential for anyone facing allegations of tax fraud. Lack of intent to deceive One of the strongest defenses in a false tax return case is proving a lack of intent. The prosecution must show that the taxpayer willfully misrepresented information. Honest mistakes, such as miscalculations or misunderstandings of tax laws, do not meet the legal standard for fraud. If errors were made without intent to deceive, this defense may apply. Reliance on a tax professional Many taxpayers seek assistance from accountants or tax preparers. If an error occurred due to a professional’s mistake, this could serve as a defense. Demonstrating reliance on a tax expert , especially if the taxpayer provided accurate information, may help argue against willful wrongdoing. Insufficient evidence The burden of proof lies with the government. Prosecutors must present clear and convincing evidence that a taxpayer knowingly submitted false information. If the evidence is weak, inconsistent, or based on assumptions rather than facts, the defense can challenge the case’s credibility. Statute of limitations Tax fraud cases have a limited time frame for prosecution. Generally, the Internal Revenue Service (IRS) has six years to bring charges for criminal tax violations. If authorities pursue a case after this period, the defense can argue that the charges should be dismissed. Correcting the mistake If a taxpayer voluntarily corrects errors before the IRS begins an investigation, it may demonstrate good faith. Filing an amended return or paying the owed amount can help reduce penalties and weaken the prosecution’s case. Allegations of filing a false tax return require a strong legal strategy. Understanding the available defenses and acting quickly can help those accused of tax fraud challenge the charges effectively.