Volunteering at low income taxpayer clinics can provide CPAs valuable experience.

• Author: Hunt, Marshall
• Position: Certified public accountants

Many CPAs are likely aware of the IRS's Volunteer Income Tax Assistance (VITA) program, but they might not be as familiar with another major IRS grant program, Low Income Taxpayer Clinics (LITCs). The IRS funds LITCs under a matching grant program authorized by Sec. 7526, which was passed as part of the Internal Revenue Service Restructuring and Reform Act of 1998, P.L. 105-206. LITCs are a valuable part of the Taxpayer Advocate Service's programs.

National Taxpayer Advocate Nina Olson, along with the late Janet Spragens, championed the legislation that created the grant program. Spragens was a tax professor at American University's Washington College of Law. Both were leaders in the establishment of tax clinics for low-income taxpayers.

As reported in IRS Publication 5066, Low Income Taxpayer Clinks Program Report (December 2014), representation efforts produce tangible results. According to the report:

During 2013, LITCs working controversy cases brought over 4,300 taxpayers into filing compliance and over 4,600 taxpayers into collection compliance. Moreover, clinics helped their low income clients to secure more than $5.2 million in tax refunds and to eliminate more than $51.3 million in proposed or outstanding tax liabilities, penalties, and interest. [p. 12] Volunteering for an LITC pro bono panel gives a CPA a chance to provide valuable community service outside busy season and obtain additional experience in tax representation.

A CPA is likely to be approached by a VITA program to provide pro bono tax preparation assistance; however, many VITA programs operate only during tax season, and the demands on the CPA are too great to accept the request. On the other hand, LITCs operate year-round.

LITCs represent low-income taxpayers in IRS controversies and inform low-income individuals for whom English is a second language (ESL) about their rights and responsibilities. While there is no strict income limit on consultations and ESL outreach, at least 90% of cases accepted by a clinic for representation must be for taxpayers with incomes that do not exceed 250% of the federal poverty level. There is also a limit of $50,000 in dispute per tax period, unless there are extenuating circumstances.

The focus is on IRS controversies, but the clinic can also address related state controversies.

LITCs do not prepare returns unless necessary to resolve a tax controversy. As a result, clinics look to VITA programs as well as CPAs and other...