If you are self-employed, you may earn less money in your initial days. Each state has special programs for their low-income taxpayers, such as LITCs. LITCs (Low-income Taxpayer Clinics) is a specific program to offer representation to taxpayers with low income in federal tax disputes. These clinics are working as a part of huge programs like tax counseling of elderly (TCE), volunteer tax assistance (VITA), and tax clinics for students. The Low-income taxpayer clinic grants (LITCs) offer different tax services to underserved populations. Moreover, you have to cover yourself with suitable health insurance. Sites like Careful Cents can be a good start for you to pick coverage.
The LITCs is a grant program to provide national funds to particular organizations so they can offer LITC services to low-income taxpayers or ESL taxpayers (people who speak English as their second language). Clinics that participate in these programs offer:
- Representation: for people in disagreements with IRS (Internal Revenue Service), such as national tax litigation, collection matters, appeals, and audits. LITCs may help taxpayers react to the notices of IRS and correct their account issues.
- Education: They are responsible for providing training to taxpayers about their responsibilities and rights.
- Advocacy: They have to provide support on behalf of ESL taxpayers and taxpayers with low income.
These clinics started in the middle of 1970s when different law schools were established programs for pupils who want to participate in tax services. Law students with proper certification were responsible for representing a client before the tax court of the USA and the Internal Revenue Service. These students work under the supervision of tax instructors. The clinics for student taxes were responsible for dual goals, such as encouraging students for their contribution to tax good and educating student lawyers.
First independent clinic for the low-income taxpayer was formed in 1992 when the Tax Law Community Project gained independence. This project is developed after customary authorized aid societies. This clinic hires the in-house professionals and tax preparers along with an active board. The board consists of accountants, enrolled agents, and volunteer attorneys who accept the cases based on pro bono.
Restructuring IRS Legislation
Director of National Tax Clinic, the Janet Spragens appeared before Federal Commission in 1997 to restructure IRS. He was a professor at Washington Law College American University. The professor advocated for national funding of LITCs. The commission had adopted his proposal as a recommendation for modernization of IRS. Congress held several hearings from 1997 to 1998 that lead to the IRS Reform and Restructuring Act 1998. The 1st executive director and founder of CTLP, Nina Olson, testified the oversight means and ways subcommittee and finance committee of Senate about the significance of clinics for low-income taxpayers. Congress noticed these pleas for equal access to the depiction in tax arguments.
The IRS Reform and Restructuring Act 1998 enacted the code section 7526. This section authorizes the PA of Treasury to offer similar funds for endowments to qualified clinics of the low-income taxpayer. These grants can’t exceed $100,000 annually per clinic. The clinics should match the funding of the IRS on $-for-$ basis. However, in-kind contributions may be a part of this match. IRS can award multi-year allowances for almost three years.
Clinics for Low-income Taxpayer
Qualified clinics have to represent taxpayers with low-income in different controversies involving the IRS. They must operate programs for the assistance of people who speak your language (English) as a 2nd language (ESL). They have to increase the awareness of taxpayers about their responsibilities and rights. Qualified clinics should receive nominal fees for these services.