Low Income Taxpayer Clinics (LITCs)

Of course, if you can afford the fees, a tax professional like a tax attorney can be engaged to take up your case. That is good because those professionals are specialists in the field who keep abreast of the relevant, latest rules and regulations.

But if you can't afford such professional advise, the government has provided another option: Low Income Taxpayer Clinics (LITCs).

Just because the government took the lead in establishing LITCs, it does not mean that they are government offices staffed by government employees.

Low In come Taxpayer Clinics are non-government, independent organizations that represent low income taxpayers in their tax disputes (controversies) with the Internal Revenue Service (IRS). IRS just lists LITCs approved to function in each state. But that should not be considered as a recommendation or endorsement of any of the listed agencies by the IRS.

The government gives only partial funding to these organization in the form of grants. So you may see that only some LITCs provide their service free. Others do it for a nominal fee.

While they usually are not perceived as tax advisers who provide help before filing, there is some exceptions in the case of tax payers whose speak English as a Second Language. In such ESL cases Low Income Taxpayer Clinics are allowed to educate the taxpayer about their federal tax rights and responsibilities. It is more of an outreach effort than an advise service.

Also, not all such tax clinics provide both: controversy representation and ESL outreach.
Most do controversy dispute service. Some provide only ESL service. Still others do both.

Such representation of low income taxpayers can be before the IRS or a tax court and include audit and collection disputes.

Each clinic may have their own guidelines for representing low income taxpayers. But as for deciding who is a Low Income Taxpayer and who is not, the government has issued definite guidelines with a maximum limit of 250% of the poverty guideline. That is because for qualifying for federal funding at least 90% of the taxpayers served by an LITC should be those with incomes not exceeding 250% of the poverty guidelines.

The poverty guidelines are statistics issued by the Department of Health and Human Services (DHHS) for every year. IRS is using it as the standard to decide who are eligible for this free or nominal fee service. Below is a representative sample of the income ceilings for availing LITC services, based on those guidelines:

A. For the 48 contiguous states, District of Columbia and Puerto Rico:

(No. of family members) Income Ceiling
(1) $27,075
(2) $36,425
(3) $45,775
(4) $55,125
(5) $64,475
For each member above 5, add $9,350 to the above. For example,
(6) $73,825
(7) $83,175
(8) $92,525

B. For Alaska:

(No. of family members) Income Ceiling
(1) $33,825
(2) $45,525
(3) $57,225
(4) $68,925
(5) $80,625
For each member above 5, add $11,700 to the above. For example,
(6) $92,325
(7) $104,025
(8) $115,725

C. For Hawaii and Guam:

(No. of family members) Income Ceiling
(1) $31,150
(2) $41,900
(3) $52,650
(4) $63,400
(5) $74,150
For each member above 5, add $10,750 to the above. For example,
(6) $84,900
(7) $95,650
(8) $106,400

It is interesting that some of the LITC organizations are run by accredited educational institutions like schools of law, business, or accounting, where students under the guidance of the faculty serve the taxpayers.

PLEASE NOTE: As an educational article, this is a just a gentle, layman's introduction to the subject and does not deal with all the aspects of the subject. It is not tax advice. Since the rules and regulations are regularly being updated by the IRS, for definitive and the latest information on the subject you should refer to the relevant publications of the Internal Revenue Service (IRS). For legal issues and expert advise you should approach a tax professional like a tax attorney whose local contact information you may find in local business and telephone directories. If you use tax preparation software, remember to update it before filing to include the latest rules and regulations.