The Internal Revenue Service is pointing to some of the successes with pro bono clinics that represented nearly 20,000 taxpayers in 2020 who faced a tax dispute with the agency, despite the pandemic.
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The report arrives at a time when taxpayers of every income level are struggling to do their taxes amid changes in the tax laws through the various pandemic relief packages of recent years like the CARES Act and the American Rescue Plan Act. The IRS’s chronically underfunded agency has been especially short-staffed and has tried to cope with a backlog of millions of unprocessed tax returns and amended tax returns from last year, with little availability to answer phone calls or respond to correspondence from taxpayers worried about the tax collection notices they are receiving. Under pressure from lawmakers and tax professionals, the IRS announced Wednesday that it would be suspending many of the automated notices that its computer systems have been sending to taxpayers about collections, balances due and unfiled tax returns (
The LITC Program is a federal grant program administered by the Taxpayer Advocate Service, led by National Taxpayer Advocate Erin Collins, who had also called on the IRS to stop the automated notices during a congressional hearing Tuesday (
The clinics struggled during the pandemic, but nevertheless managed to help nearly 20,000 taxpayers in 2020. “In March 2020, shutdown orders went into effect across the United States, requiring clinics to change how and where they operated,” Collins wrote in the report. “The IRS sent workers home, causing much of the IRS to shut down and making resolution of taxpayer cases even more difficult. Compounding the challenges, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, giving the IRS the responsibility to deliver more than 160 million economic impact payments (EIPs). LITCs suddenly needed to be experts in the new law and to resolve the conflicts that arose when taxpayers did not receive the benefits to which they were entitled. LITCs continued to provide top quality representation and education services to taxpayers despite these circumstances.”
During 2020, LITCs helped taxpayers get more than $5.8 million in tax refunds and reduced or corrected taxpayers' liabilities by over $116 million. They also brought more than 2,900 taxpayers back into payment compliance.
Through outreach and education activities, LITCs tried to ensure individuals understood their rights as U.S. taxpayers by conducting more than 1,000 educational activities that were attended by nearly 134,000 individuals. Approximately 1,500 volunteers contributed to the success of LITCs by volunteering more than 42,000 hours of their time. Nearly 65% of the volunteers were attorneys, certified public accountants or enrolled agents.
LITCs used different approaches to advocate for taxpayers, including collection alternatives to resolve issues administratively within the IRS, litigating cases in the U.S. Tax Court and other federal courts, and elevating systemic issues through the Taxpayer Advocate Service's Systemic Advocacy Management System.
The report cites an example of how an LITC helped a taxpayer in need. A low-income taxpayer who was working in a local grocery store earning minimum wage was the sole breadwinner for her family of four but had never filed a federal income tax return. The IRS sent her Statutory Notices of Deficiency for four tax years, informing she owed several thousands of dollars based on unreported income. Uncertain what she could do to address the issue, she asked for help from an LITC. The clinic evaluated the case and explained that she needed to contest the notices in the U.S. Tax Court. The LITC helped her file a Tax Court petition and argued that the taxpayer did not owe tax but instead was due refunds, as she was eligible for the Earned Income Tax Credit and Child Tax Credit. She ultimately received over $16,000 in tax refunds.
