IRS & State Tax Representation

The first thing I tell clients who arrive in my office with an IRS letter or a NY DTF notice is that it’s almost always less catastrophic than it feels in the moment. The second thing I tell them is to stop responding directly. Once a client engages me, the IRS and state correspondence comes to me, the agents talk to me, and the client goes back to running their life while I work the case. Most of the damage in tax controversy comes from clients trying to handle it themselves and saying things to agents that close off options they didn’t know they had.

I’m Lawrence Israeloff. I’m a tax attorney and a CPA, and for over two decades I’ve been representing clients across Long Island and the New York City metro before the IRS and the New York State Department of Taxation and Finance. The work covers the full range – audits, notices, collection matters, appeals, and where necessary, U.S. Tax Court litigation.

Where most people are when they call

Tax representation work tends to start in one of a few places, and what to do depends on which:

  • A correspondence audit or CP-series notice. The IRS sends about 70% of its audit-related correspondence by mail rather than face-to-face. CP2000 notices (proposed adjustments based on document matching), CP501/503/504 notices (collection escalation), and similar letters arrive looking alarming and contain deadlines that matter. Most are resolved in writing without a meeting if the response is structured correctly and submitted on time. Missing the deadline is what turns a manageable issue into a serious one.
  • A scheduled examination. Office audits and field audits begin with a letter scheduling an appointment and listing the items the IRS wants to review. The right move is to engage representation before the appointment, not after, so the documentation can be assembled, the issues understood, and the representation properly authorized via Form 2848 (Power of Attorney). The audit then proceeds with the agent dealing with the representative, not the taxpayer directly.
  • A NY DTF residency or income audit. New York is one of the most aggressive states in the country on residency audits, particularly for high-income clients who claim to have changed domicile to Florida or another low-tax state. These audits look at primary residence, location of valuables and pets, family ties, business connections, day counts, and a long list of other factors. They’re document-intensive and adversarial; they often go on for months; and the dollar consequences can be substantial. Representation is genuinely valuable here in a way it isn’t always for simpler matters.
  • Unfiled returns or unpaid balances. Clients who haven’t filed for several years, or who owe meaningful balances they can’t pay, often arrive scared that the situation is worse than it actually is. The IRS has structured pathways for resolving these situations (installment agreements, offers in compromise, currently-not-collectible status, penalty abatement for reasonable cause) and the right one depends on the specific facts. The goal is usually getting the client back into compliance and on a payment path they can actually meet.
  • A statutory notice of deficiency or assessment. When the IRS or NY DTF issues a formal deficiency notice, the clock starts running on the right to challenge it. Federal deficiency notices give 90 days to petition the U.S. Tax Court (150 days if the taxpayer is outside the U.S.); NY assessments have their own appeal timelines. Missing these deadlines forecloses the most efficient path to challenge the assessment and forces the dispute into refund litigation, which is more expensive and procedurally harder.

What representation actually involves

The mechanical work depends on the matter, but the recurring elements are: filing Form 2848 (federal) or POA-1 (New York) to formally enter the appearance and direct correspondence to me; gathering and organizing the documentation the agency is asking for; communicating directly with examiners or revenue officers; preparing written responses, position statements, and protests where appropriate; negotiating settlements or proposed adjustments; and pursuing appeals (administrative or judicial) when settlement isn’t acceptable.

Where the work goes if it doesn’t settle: most cases that don’t resolve at the examination level go to IRS Appeals, which is an independent function within the IRS that often produces better outcomes than the examination itself. Cases that don’t resolve at Appeals go to U.S. Tax Court (or, less commonly, to district court via refund litigation). New York has parallel processes – the NY Tax Appeals Tribunal and ultimately the New York courts.

A note on the attorney part of the credential here: only attorneys, CPAs, and Enrolled Agents can represent taxpayers before the IRS, but only attorneys can take a matter to U.S. Tax Court without becoming admitted to its bar through an examination process. For matters that may need to escalate to litigation, having an attorney from the outset preserves the option without the procedural complications of substituting counsel later.

Resolution options the public doesn't always know about

A few avenues that clients are often surprised exist:

  • Penalty abatement for reasonable cause. Penalties (failure-to-file, failure-to-pay, accuracy-related, late-deposit penalties) can often be abated where the client can show reasonable cause for the noncompliance. Documented illness, natural disaster, reliance on professional advice, and other circumstances qualify. The IRS also offers first-time penalty abatement for taxpayers with a clean compliance history, which is essentially automatic if requested.
  • Offers in compromise. Where a client genuinely can’t pay the full liability and meets the qualifying criteria, an OIC can settle the debt for less than the full amount owed. The math is structured (reasonable collection potential calculation) and the application is documentation-intensive, but for clients in genuine financial distress it’s a real option. Most TV-advertised “settle your tax debt for pennies on the dollar” services are predatory and oversell what’s realistic; the right answer for any given client depends on their actual financial picture.
  • Voluntary disclosure. For clients with significant unreported foreign accounts, undisclosed cryptocurrency, or other unreported income that could expose them to criminal referral, the IRS Voluntary Disclosure Practice provides a structured pathway to resolve the issue while substantially mitigating criminal risk. The window for these matters has to be managed carefully – once the IRS opens an examination, the voluntary disclosure option is foreclosed.
  • Innocent spouse relief. Married taxpayers who file jointly are generally jointly and severally liable for the full tax. Where one spouse can show that the underpayment is attributable to the other spouse’s actions and that they didn’t know about the issue, IRC §6015 provides relief from the joint liability, but the standards and procedural requirements are specific.

Who I work with

The recurring patterns: individuals who’ve received an IRS notice or NY DTF assessment and don’t know how to respond; high-income clients facing residency or income-sourcing audits in New York; business owners under examination on entity-level issues (reasonable compensation, classification of workers, deductibility of expenses); executors and trustees responding to estate or fiduciary income tax inquiries; and clients in collection matters trying to get back into compliance with an unpaid balance they need to resolve.

If your situation is a routine notice with a clear response and modest dollars at stake, you may not need representation, and I’ll tell you that. The work I do has the most value where the dollars, the legal exposure, or the procedural stakes justify professional involvement.

A word about what to do right now

If you’ve received a notice or audit letter and you’re trying to figure out the next step: don’t ignore the deadline on the letter, don’t call the IRS or the state to “explain” before you’ve had advice, and don’t pay or sign anything without understanding what it does to your legal position. The right first step is usually a conversation about what the notice actually says and what your options realistically look like.

For general background on taxpayer rights, the IRS Taxpayer Bill of Rights is a useful overview, and the New York State Department of Taxation and Finance maintains its own taxpayer rights guidance. Neither replaces representation tied to your specific matter.

Long Island, NYC, and the surrounding metro

I work out of Melville, NY and represent clients before the IRS and NY DTF from Long Island, the five boroughs, Westchester, and the broader New York metro. New York’s enforcement posture is genuinely aggressive (particularly on residency, sales tax, and withholding matters) and the local representation experience matters.

Let's talk

If you have an IRS or state tax matter that needs attention (a notice, an audit, an unpaid balance, an unfiled return, or anything that’s coming with a deadline you’re not sure how to meet) that’s the conversation. Schedule a consultation and we’ll talk through what you have and what the realistic options are.