Low Income Taxpayer Clinic Worked Over 110 Cases in 2022

A married couple with an IRS bill that amounted to half their income was one of several recent cases the Low Income Taxpayer Clinic successfully addressed, according to the LITC’s recent annual report.

The LITC, which has been helping the community since 2010, enlists accounting students to assist people with tax conflicts, affording the students valuable Learn by Doing experiences while having a positive impact on the community. Last year, according to its annual report, the clinic addressed 110 cases, including 10 cases pending in the U.S. Tax Court, covering 154 different legal issues.

Members of the leadership discuss events for the upcoming quarter. Pictured here are Nathan Nguyen, left, and Hunter Smith. (Photo: Pat Pemberton)

“Many of our clients are frightened of what might happen to them and unable to afford representation,” said LITC Director Lisa Sperow. “We are able to step in and help them understand their rights and responsibilities and let them move forward with their lives in a happier state.”

Overall, the clinic saved clients nearly $380,000 in decreased liabilities and obtained nearly $8,000 in refunds in 2022. Meanwhile, 2023 is off to a busy start: In the first six months, the LITC worked on a total of 50 cases. Three cases in 2023 have been resolved in tax court with a total concession from the IRA, the LITC has obtained over $18,000 in withheld refunds, and has recorded over $180,000 in reduced liabilities for clients.

The married couple, who each worked as farm laborers while the wife attended school part-time, had a taxable income under $12,000 but received a 2021 bill from the IRS for $6,000. After investigating, the clinic learned the IRS had audited them for $30,000 of unreported income, which was based on W2s reported by an limited liability company the couple had never heard of.

“We filed a petition on their behalf in tax court disputing the liability and an affidavit with the IRS claiming that the husband was the victim of identity theft,” said Lisa Sperow, director of the LITC.

The clinic successfully argued the case during an IRS Appeals conference, and the liability was dropped.

In addition to assisting people with tax conflict, the clinic also performs outreach and advocacy functions, including recent reports seeking IRS and congressional changes on issues unfairly treating low-income taxpayers. Meanwhile, a panel of pro bono workers – including several alumni and  David Chamberlain, an assistant professor of accounting – volunteer to assist. Last year, pro bono workers volunteered 57 hours.

Students who work in the clinic are enrolled in BUS 463 – the clinic course – and their work helps fulfill their senior project requirements. Team leaders, who have completed the course, are paid positions.

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The LITC is currently holding a boot camp for the next round of student workers.

“Boot Camp is where the students learn everything they need to know to work in the clinic,” Sperow said.

The camp, which occurs the first two weeks of each quarter, covers confidentiality issues, tax research, identity theft, earned income tax credits and more before the newest recruits begin assisting locals – many who have troubling tax problems.

While the students work with numbers, they are also trained to work with people in distress.

“Students in the LITC tackle real legal cases for real people, dealing with complex issues in tax law while also providing empathy and support to those in need,” said Hunter Smith, currently a team leader for the LITC. “Far more than providing students with practical accounting knowledge and a mastery of the tax dispute system, the LITC under director Lisa Sperow teaches students how to be people.”