Students Saved Low-Income Clients Nearly $400K in Hands-On Tax Clinic
A married couple with an IRS bill that amounted to half their income was one of the 110 cases the Low Income Taxpayer Clinic addressed in 2022, 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’s workload included 10 U.S. Tax Court cases, covering 154 separate legal issues.
“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 the past year. The married couple, who each worked as farm laborers while the wife was a part-time student, 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 wage and tax statement W-2 forms reported by a 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,” Sperow said.
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 and tax — volunteered 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.
The LITC is now holding a boot camp for its 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 of whom 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, an LITC student team leader. “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.”
Lead image caption: Kaeley Stelling speaks during a recent student leadership meeting at the Low Income Taxpayer Clinic. Pictured with her are, left to right, Kaleigh Chi, Nathan Nguyen, Hunter Smith and Victoria Lopez.
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