Low Income Taxpayer Clinic Update
Tuesday, January 15, 2013
Posted by: Charles Jeane
The following are some recent successes from the Low Income Taxpayer Clinic:
1. Student attorney Laura Duncan, 3L, represented a severely disabled, wheelchair bound woman who was the victim of identify theft. The IRS was levying the client’s bank account because wages from an employer, for which she had never worked, from a state where she had never lived, were reported for her Social Security Number. Ms Duncan quickly filed an identity theft affidavit with the IRS which stopped the levy. The client received a refund for the full amount levied which she used to purchase a much-needed vehicle.
2. Student attorney Byron White, 3L, filed amended returns for an elderly client whose paid tax return preparer did not report the tax withheld from her pension. Byron’s diligent review of the file caught the preparer’s mistake and stopped a pending levy by the IRS. Instead of facing a tax liability of $2,800 and an IRS levy, the client is now entitled to a refund of $680.
3. Student attorney Rachel Huhn, 3L, helped a client have an IRS levy removed from the client’s monthly Social Security check. The levy was making it difficult for the client to meet her monthly living expenses. The client’s tax liabilities are now in Currently Not Collectible status, and she is again able to afford all of her living expenses.
4. Student attorney Sean Carpenter, 3L, settled a client’s outstanding tax liability of $6,187 for $10 through an Offer in Compromise. An Offer in Compromise is an accommodation offered by the IRS in circumstances where paying the tax debt creates a true financial hardship. In this case the tax liability was the result of a distribution from a residuary trust after the death of a distant family member. This unexpected income provided much needed relief to this client who is in poor health, and had lost his home and all of his belongings in an apartment fire.
5. Student attorney Elizabeth Stinebaugh, 3L, successfully settled a case in the U.S. Tax Court for clients who had been audited for claiming the Earned Income Tax Credit (EITC). The client’s adult son is permanently disabled and has lived with his parents since birth. The IRS had disallowed the clients’ claimed Earned Income Tax Credit on the allegation that their son was not permanently disabled and did not live with them. The clients did not want to go to trial but were having trouble substantiating their son was a dependent. Elizabeth worked tirelessly to help the clients substantiate that their adult son was permanently disabled and was the couple’s dependent. The IRS settled the case and agreed with the clinic that the taxpayers were entitled to the EITC and had no outstanding tax liability.