Tax Issues and Resources Relevant to Legal Aid Attorneys and Clients

1. Tax Issues and Resources Relevant to Legal Aid Attorneys and Clients

2. 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

3. 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

4. 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

5. General Tax Issues • Tax return preparation • -self preparation • -VITA • -tax professionals • -seasonal tax preparation offices • CEP VITA • -25 communities statewide • -January 22- April 18

6. Divorce and Domestic Violence • Innocent spouse • Injured spouse

7. 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

8. 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

9. 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

10. 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

11. Consumer Law • Liens • Debt cancellation • -general rule: cancelled debt is taxable • -exceptions: • a) insolvency • b) certain mortgage foreclosures

12. Our Services • All 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

13. Our Services • Referrals • -VITA • -community service organizations • -IRS/IDR • Outreach • -ITIN events • -fairs/ other tabling events • -presentations • -trainings

14. 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