Low-Income Taxpayer Clinic
By Frances Presma/Photos: Don Hamerman
Low-Income Taxpayer Clinic Handles Disputes With IRS
You want the tax system to be fair, but it isn’t, there are too many low-income taxpayers without legal representation,” says Lecturing Fellow Alan Weinberg, director of Duke Law School’s new Low-income Taxpayer Clinic. “There are many horror stories out there, which means there are many situations where we can assist those who need help but cannot afford it.”
The Low-income Taxpayer Clinic opened in January, with an initial staff of four students who are representing clients in tax disputes pending before the Internal Revenue Service (IRS), under Weinberg’s supervision. Weinberg has almost 40 years experience in tax law, 29 of them as counsel for the IRS and another 10 with Ernst & Young.
“There are many ways to present a client’s case to the Service,” says Weinberg. “Students are learning to negotiate with the IRS, which will provide them valuable skills to bring to a practice.”
The Clinic offers an essential, free service to a group of taxpayers who would not ordinarily be able to afford representation — single individuals with incomes of up to $25,000 and couples with children and incomes slightly more than $38,000. Common disputes handled by the Clinic include collection actions and IRS examination of filed returns.
“Nobody should go to an IRS audit without representation,” says Weinberg. “Effective representation before the Service starts with a thorough client interview, gathering all the facts and documentation, and performing thorough legal research.” If a client further challenges adjustments made by the IRS following an audit, students will handle appeals, first to the Appeals Office of the IRS, where a negotiated settlement is possible, and if necessary, to the United States Tax Court.
Low-income taxpayers are often at a disadvantage when facing an audit, says Weinberg. “Many will have had their returns prepared by storefront preparers, who will have disappeared by the time the taxpayer receives notice of an audit. If, as is often the case, a client hasn’t retained receipts and documentation to support the numbers on the return, it will be up to the students to work with them to develop secondary evidence to the greatest extent possible. The students with then negotiate with the IRS agent to resolve the case quickly.”
Weinberg anticipates that collection cases involving “innocent spouses” will be a significant source of work handled by the Clinic. “The IRS looks to spouses with assets such as houses and bank accounts to satisfy tax levies — in most cases it is a joint and severe liability. When a client comes in with a collection issue, the question is whether that individual is truly liable for the tax. First, students have to assure themselves that the IRS processed the case correctly. If they determine the tax is due, they will have to ferret out whether or not the individual who comes in with a collection problem qualifies for an “innocent spouse defense.”
Students are learning to negotiate with the IRS, which will provide them valuable skills to bring to a practice.
- Alan Weinberg
Weinberg anticipates that another significant part of the Clinic’s caseload will involve IRS challenges to payouts under the Earned Income Tax Credit (EITC), for which $34 billion was claimed in the 2003 tax year.” The IRS challenges the payouts under the EITC because there has been a history of fraud associated with these claims,” he says. “Our students are going to have to understand the complex law which determines whether a taxpayer meets the qualifications for claiming the EITC, understand what documentation is required to prove a claim, and be able to recognize situations where the client could have made a claim but didn’t.”
Douglas Britt ’06 was starting his first assignment with the Clinic at press time. Headed for a litigation practice at Dechert LLP in Washington, D.C. following graduation, Brit is enjoying client contact. “I enrolled in the Clinic because it provides a great opportunity to develop real world lawyering skills while also helping people in the community.”
A grant from the IRS helped launch the Clinic.