For taxpayers without the resources to consult a professional, a letter from the IRS about an audit or an unpaid tax liability can be overwhelming and, left to languish, can lead to compounded problems down the road.
The NH Bar Association Low-Income Taxpayer Project (LITP) part of the Bar’s Pro Bono Referral Program, provides access to free representation in non-criminal tax matters for qualifying taxpayers in New Hampshire. The project matches volunteer attorneys, certified public accountants and enrolled agents with clients who are experiencing a "controversy" with the IRS, explained attorney and LITP coordinator Barbara Stewart. These controversies can range from audits to accusations by the IRS that a taxpayer owes a substantial sum in back taxes.
Like similar clinics across the country, Pro Bono’s taxpayer project is funded primarily by an annual grant from the Taxpayer Advocate Service, a division of the IRS, through its Low-Income Taxpayer Clinic program. Stewart notes that while on the surface it might seem odd that the IRS is funding programs that provide representation for taxpayers to fight against the IRS, the agency benefits from the project, and others like it across the country, in several ways.
"When lawyers are involved, cases move along more quickly and efficiently, and that efficiency is cost-effective for the IRS, even if we help the clients win their cases," Stewart said.
Additionally, the involvement of attorneys helps ensure that tax laws are followed and applied consistently, said Stewart.
There are 114 volunteer attorneys on the special tax project panel, but the availability of these attorneys to handle cases varies widely.
"They’re always willing, but they’re not always available," Stewart said. "Because of this, we keep trying to recruit more volunteers. Every person on the panel has other obligations and duties to existing clients."
In 2012, Pro Bono’s Taxpayer Project opened 68 cases and, following careful screening, referred 44 of those cases to volunteer attorneys. The program closed 76 cases during 2012, and in nine of those cases, lawyers succeeded in reducing client debt.
"The total amount of IRS-calculated tax liability reduced by our volunteers last year was $238,441," said Stewart. "In other words, our volunteers wiped away more than $238,000 in tax debt for their clients."
Stewart, who started in her current role last October, is handling some basic tax cases herself. A former professor of appellate advocacy at Franklin Pierce Law Center (now the UNH School of Law) and a former Concord Monitor columnist, she is new to the practice of tax law, but said she’s grateful to be working in legal services and eager to learn more.
In addition to screening and referring cases, Stewart and the LITP engage in public education and outreach, and provide advocacy regarding systemic tax issues. Stewart said she’s trying to raise awareness about the project and other resources available for taxpayers.
"We’re always looking for more cases and more people we can help," Stewart said. "People can get amazing help through this clinic, so we want to get the word out and get people in here."
To be eligible for assistance from the LITP, taxpayer households can earn up to 250 percent of the federal poverty level, or $27,225 for singles and $36,775 for couples with no children. The upper limit for a household of five is $64,425. This income calculation includes only people in the household who are related to the taxpayer by blood, marriage or adoption.
For more information about the program, visit the LITP page on the NH Bar Association website.