Civil Tax Controversies & Trials

Whether facing an IRS audit, contesting a tax assessment, or resolving a dispute through the appeals process, Kostelanetz attorneys guide corporations, organizations, and high-net-worth individuals through the process of a broad variety of civil tax controversies. Kostelanetz attorneys advise our clients on the best options for presenting their case to tax authorities with the aim of resolving the case quickly, favorably, efficiently, and in a manner that aims to protect their financial interests. 

Our firm’s nearly 80 years of experience with tax controversy and tax fraud matters is the cornerstone of our success. We have more tax controversy and tax fraud attorneys than most large firm practice groups. 

Large firms often call on our attorneys as co-counsel in some of the most challenging, complex, and sensitive tax controversy cases because there are very few issues or fact patterns that we have not encountered. Our firm has the expertise and resources to respond to any challenge by both federal and state tax authorities through negotiation or, if necessary, litigation. 

Approximately half of the firm’s legal team has significant government experience, including a former Acting Assistant Attorney General of the Department of Justice (DOJ) Tax Division, several attorneys with experience in the IRS Office of Chief Counsel, a former Special Trial Attorney for the IRS Office of Chief Counsel in New York, several attorneys with criminal and civil DOJ Tax Division experience, and several former Assistant United States Attorneys. Also part of the Kostelanetz team is a former Chief of the IRS Criminal Investigation. As a result, Kostelanetz attorneys are fully familiar with the practices of the IRS, the DOJ, and other taxing authorities.

Kostelanetz regularly represents clients who hope to limit their civil liability for past failures to file accurate tax returns or who failed to file tax returns. 

The firm has negotiated hundreds of voluntary disclosures with the IRS, and state tax authorities, thereby both avoiding criminal prosecution for alleged tax evasion and limiting civil penalties on behalf of clients with foreign bank accounts worth hundreds of millions of dollars (some of which were held by foreign trusts, foundations, corporations, and nominees), and on behalf of clients who failed to report tens of millions of dollars of income earned from United States businesses and investments.

The firm also has represented scores of taxpayers with alleged abusive tax shelter investments and has resolved favorably hundreds of millions of dollars in potential liability arising from these investments. Kostelanetz also has successfully defended tax promoters against IRS audits and investigations.

Our firm’s objective in tax matters is to resolve issues quickly, efficiently, and successfully. We seek inventive ways to resolve tax controversies prior to litigation, while always being prepared to take a matter to trial when it is to the client’s tactical advantage.  Kostelanetz attorneys frequently try cases in the United States Tax Court, the United States District Courts, and the United States Court of Federal Claims. 

Our experience encompasses all facets of negotiation with tax authorities and all phases of tax litigation. We also represent clients faced with demands for documents or testimony in connection with examinations of other taxpayers. 

The firm regularly obtains abatements of penalties, acceptances of offers in compromise, and innocent spouse relief. In addition, the firm is experienced in handling estate and gift tax audits and examinations.

Our expertise extends beyond federal tax matters to include New York State and City tax issues. We have successfully represented numerous clients in these matters, demonstrating our in-depth knowledge of local tax laws and our ability to secure favorable outcomes for our clients. Indeed, we regularly represent corporate and individual clients in connection with state tax issues, including corporate franchise, sales, payroll, and personal income taxes.    In particular, the high rate of taxes imposed by New York State and City frequently drives taxpayers to seek to change their legal residences. These attempts are often challenged by the authorities, and we have extensive experience in litigating these issues and have successfully defended many individuals in residency cases.