Leap Day poses potential tax withholding issues
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Special clinics help low-income taxpayers resolve IRS issues

Taxpayer-Clinic_Georgia State School of Law
Law schools and their students, like these at Georgia State University College of Law, are major contributors to the success of Low-Income Taxpayer Clinics nationwide. (Photo courtesy Philip C. Cook LITC)

Sometimes, taxpayers encounter issues more serious that just filing their returns.

They discover that the Internal Revenue Service has some questions about a prior return or an appeal of an agency decision isn't going as expected or that the federal tax collector is taking his name to heart and initiating collection procedures.

What to do? Specifically, what to do if you don't have much money?

Find your nearest Low-Income Taxpayer Clinic (LITC).

LITC services, IRS/Advocate connection: LITC Program participants receive IRS grants, but work independently to assist and advocate for taxpayers.

That taxpayer focus and commitment is due to the LITC Program being administered by the Taxpayer Advocate Service, soon to be led by newly appointed National Taxpayer Advocate Erin Collins. Currently, acting Taxpayer Advocate Bridget Roberts is helming this program.

Many of those at LITCs are volunteers. Most recently, more than 1,800 people contributed nearly 57,000 hours of their time at these tax-help clinics. More than two-thirds of these volunteers were attorneys, certified public accountants or enrolled agents.

They used their experience and free time to help low-income individuals who have tax disputes with the IRS, such as the aforementioned audits, appeals and tax collection disputes.

In addition to representing eligible taxpayers before the IRS, LITC personnel can work on taxpayers' behalf in tax-related court hearings.

LITC workers also can provide information about taxpayer rights and responsibilities in different languages for those whose first language is not English.

Earnings limits: LITC services are free or cost eligible taxpayers only a small fee. To qualify for this low- or no-cost assistance, a taxpayer's income generally must be below a certain threshold.

The income cap is earnings that are 250 percent of poverty guideline for the United States. The table below shows the income ceilings for the 2020 that will qualify for LITC help.

 Size
 of Family

48 Contiguous States, Puerto Rico and
Washington, D.C.

Alaska

Hawaii

 1

$31,900

$39,875

$36,700

 2

$43,100

$53,875

$49,575

 3

$54,300

$67,875

$62,450

 4

$65,500

$81,875

$75,325

 5

$76,700

$95,875

$88,200

 6

$87,900

$109,875

$101,075

 7

$99,100

$123,875

$113,950

 8

$110,300

$137,875

$126,825

 For each
 additional
 person, add

$11,200

$14,000

$12,875

Benefits.gov has an interactive option that lets you find out if you're eligible for LITC services.

Note, though, that each clinic will make the final decision as to whether you meet the income guidelines and other criteria before it agrees to represent you.

In addition, the amount of money in dispute with the IRS usually must be less than $50,000.

Locating an LITC: If you need legal help with a tax issue and qualify for LITC assistance, the Taxpayer Advocate Service (TAS) has an interactive online map you can use to find the clinic nearest you.

That's a screen shot below. Of course I clicked on Texas! You can head on over (after finishing this post, I hope!) to the TAS' webpage about LITCs and scroll down to use the TAS map for your state.

LITC map from Taxpayer Advocate Service

If you prefer to get a look at all the LITCs operating in 2020, check out IRS Publication 4134. This PDF list of this year's clinics is alphabetical by state and includes phone numbers and services at each of the LITCs.

If you do need tax help and qualify for LITC services, use them. You are far from alone.

LITC helpful data: During 2018, the last year for which there are complete data and which is detailed in the program's just released annual report, LITCs represented 19,513 taxpayers who faced IRS tax troubles.

They helped taxpayers secure more than $4.7 million in tax refunds and reduced taxpayers' liabilities by nearly $124 million. They also brought more than 4,200 taxpayers back into payment compliance.

That's a lot of good work getting taxpayers to fulfill their proper tax obligations and helping out when things go awry. If you've got some time, give the LITC report a look. It's full of examples of the work the clinic staff do.

I'd love to give all them a By the Numbers nod, but since we've got so many numbers in connection with the program, the one that gets special recognition this week as the highlighted tax figure is the 19,513 people who were helped by LITCs.

It's too bad that that many folks had disputed dealings with the IRS. But it's very good that LITCs were around to help resolve the controversies.

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