Tax Issues and Resources Relevant to Legal Aid Attorneys and Clients

Tax Issues and Resources• CEP Tax Clinic

• General tax issues

• Tax issues related to:

-divorce & domestic violence

-custody

-immigration

-employment law

-consumer law

• Our services

CEP Tax Clinic• A program of the Center for Economic Progress

• Representation, advice and outreach on individual income tax controversies with IRS and IDR

• All clients are within 250% of the poverty level

• We serve > 5000 taxpayers annually

• We serve taxpayers statewide

• One of 150 clinics across the country

General Tax Issues• Who must file a tax return?

-income, filing status, age

-nonresident aliens

-self employed

• Who else may benefit from filing?

-taxpayers with dependents

General Tax Issues• Tax return preparation

-self preparation

-VITA

-tax professionals

-seasonal tax preparation offices

• CEP VITA

-25 communities statewide

-January 22- April 18

Divorce and Domestic Violence• Innocent spouse

• Injured spouse

Custody• Under qualifying child rules custodial parent claims

dependent benefits

• Child support irrelevant

• Noncustodial parent access to dependent benefits:

-Form 8332

-Judgment or agreement and signed statement (for pre 2009 agreements)

• Tie breaker rules

Immigration• Who is a nonresident alien under the tax code?

• Filing requirements for nonresident aliens

• Tax information is not shared with BCIS

• ITINs

• Refunds can be obtained even if SSN/ITIN mismatch exists

Employment Law• Misclassified workers

-Form SS-8

• Recordkeeping for sole proprietors

-written records of income and expenses: a must

-receipts: keep and organize

-formal ledgers: ideal but unnecessary

Consumer Law• Levies: IRS/IDR can garnish:

-paychecks: vast majority (formula based)

-bank accounts: all funds

-social security: 15% (IRS only)

-but not unemployment benefits

• ID theft

-typical scenario: ID thief working under another taxpayer’s SSN; IRS reassesses victim’s taxes using additional income earned by thief

-all victims should review their IRS records

Consumer Law• Liens

• Debt cancellation

-general rule: cancelled debt is taxable

-exceptions:

a) insolvency

b) certain mortgage foreclosures

Our ServicesAll of our services are available statewide

• Full representation

-clinic staff and interns or pro bono attorneys

• Brief advice

-by phone or in person

-we review documents, contact IRS as necessary and create a step by step resolution plan

-available to all taxpayers, regardless of whether they qualify for representation services

Our Services• Referrals

-VITA

-community service organizations

-IRS/IDR

• Outreach

-ITIN events

-fairs/ other tabling events

-presentations

-trainings

Contacting Us• Practitioner questions: Tax Clinic Manager

312-630-0255

• Client referral: Tax Clinic Help Line

312-630-0241

• Center for Economic Progress

312-252-0280

www.economicprogress.org