Unexpected audits, bankruptcy complications, and misunderstandings about tax law are what bring many low-income clients to the Neighborhood Christian Legal Clinic’s Low-Income Taxpayer Clinic. The LITC staff – one tax attorney, one paralegal, and one outreach coordinator fluent in English and Spanish – helps clients understand how to handle complicated tax issues.
LITC does not prepare taxes. But the non-profit organization can help people determine what credits they may be entitled to claim. Elizabeth Wiley, LITC outreach coordinator, said that immigrants, in particular, may not be aware of certain tax credits. They also may fall victim to predatory tax preparers, who make false claims on returns in order to boost their own income.
“It’s a problem for immigrants – taxpayers get slammed a few years later with an audit,” she said.
Wiley said about 80 percent of all IRS audits are conducted via mail, and the people who are being audited may not be able to make sense of the lengthy IRS documents that arrive in their mailboxes.
“It can be hard to navigate a problem with the IRS,” she said. “They may have had a debt forgiven that was reported to IRS, and they have to pay taxes on that.”
Wiley expects a surge in clients needing assistance soon, and she said LITC would welcome attorneys interested in assisting with the workload.
”We anticipate there being quite a bit (of new clients) in the next year or so. Because of the First-Time Homebuyer Credit, there could be several exams and audits popping up.”