William Schmidt, J.
Photos and graphics by Ryan Purcell, KBA Staff.
The Kansas Legal Services LITC The Internal Revenue Service (IRS) has provided relief for low income taxpayers since the year 1999 through their promotion of Low Income Taxpayer Clinics (LITCs). LITCs are available through law schools, legal aid organizations and other non-profit organizations. While there is a history of LITCs within the state of Kansas, the current setup has only been in place for the past couple years.
Kansas Legal Services began its LITC in 2015, and it is working to build awareness throughout the state about that LITC. The clinic at Kansas Legal Services is the only LITC for the state of Kansas listed by the IRS in Publication 4134. As a 2009 graduate of Washburn University School of Law, I began managing cases for the LITC in 2016 and became Clinic Director in 2017, working to publicize the LITC program throughout the state.
LITCs specialize in resolving disputes with the IRS and represent low income taxpayers by providing free services (though clients would be responsible for court costs or fling fees). To be a qualifying low income taxpayer, the individual must have income at 250% or less of the poverty level. To give a general idea, one qualified individual would have about $30,000 or less in annual income, and each additional family member could increase that amount by about $10,000.
The IRS provides the funding for LITCs to represent taxpayers on federal tax cases. LITCs can also represent clients on state tax issues in coordination with federal tax cases. The Kansas Legal Services LITC can represent individuals who only have state tax issues at lower income levels through funding from sources other than the IRS. The Kansas Legal Services LITC is not a tax preparation clinic, but a tax controversy clinic, so individuals who have not filed tax returns for several years need to find a tax preparer equipped to file multiple years of tax returns.
To begin, a client would sign a power of attorney form, IRS Form 2848, to allow for a representative to discuss tax issues with the IRS or gather transcripts on the client’s case. Transcripts for the client include a transcript of the tax return (called a tax return transcript, different from a copy of the tax return – which is available for a fee), a transcript of forms submitted to the IRS with regard to the client (wage and income transcript), or a transcript of activity related to the particular tax year (account transcript). The account transcript is the main document with information regarding how much a taxpayer owes the IRS for a particular tax year.
People who have gone through hard times have a variety of debts. One part of those debts can be the result of not fling tax returns for several years. Too often, people who have not fled their tax returns do not pay attention if there will be any fallout from avoiding tax fling. That fallout can include penalties and interest for not fling a timely tax return and not paying the tax debt on time.
One resulting issue is that the Internal Revenue Service can file a substitute return for an individual who has not fled a tax return. The IRS prepares that substitute return by looking at past tax returns and also what wages and income were reported to the IRS during that year, then making estimates of income based on that past reporting. It is always better for a person to file a tax return, even if that person will owe the IRS without being able to pay. Getting the tax return fled before the deadline means there will not be a penalty for not fling a timely tax return. It also means the taxpayer...