The Columns

W&L Tax Clinic Helps People in Trouble with the IRS

— by on April 14th, 2009

Some Virginians will have sleepless nights courtesy of the IRS even after the tax-filing deadline.

The Tax Clinic at Washington and Lee University’s School of Law can help alleviate some of those nightmares for individuals living in the Shenandoah Valley and the surrounding area.

Established in January 2008, the clinic is funded partly by the IRS Taxpayer Advocate Service. It helps low-income tax payers having problems with their federal taxes, or state taxes related to a federal problem. They won’t help you file your current tax return, but W&L has another free program that will.

“All of our services are free,” says Michelle Drumbl, assistant clinical professor of law. She is a former attorney with the IRS Office of Chief Counsel’s International group. As director of the Tax Clinic, she mentors nine W&L law students who provide the services. All have taken the Federal Income Taxation of Individuals course. Some will go on to specialize in taxes after graduation, while others enjoy the experience of working with clients.

“It can be overwhelming when the IRS is sending you a letter or challenging you on something,” says Drumbl. “Sometimes just having a student who has the time to do research, look at things objectively and explain how the IRS works can be very helpful. Sometimes there’s a simple option that the taxpayer wouldn’t know about or doesn’t have the time to deal with.”

Drumbl and the students meet face-to-face with all their clients. “It’s great for the students,” says Drumbl. ‘We’ve had some clients who just can’t get their problems straightened out. The students enjoy helping. It’s very educational for them and also is a great example of the law school’s recently heightened emphasis on experiential learning.”

If you haven’t filed a tax return for years, you’ll have plenty of company at the clinic.

Drumbl points to one case where a woman who had not filed a tax return for six years discovered that she was due a few thousand dollars in refunds — all she had to do was file her tax returns. “We were able to get this money back for her and tell her ‘you’re not in trouble’, says Drumbl.

The clinic also handles audits, an experience that Drumbl says can terrify people. “If the IRS wants additional information on charitable donations or earned-income tax credits, we help clients put their case together and represent them,” she says.

Students also see cases where people owe the IRS money. They can’t pay and don’t know what to do about it. “Surprisingly, the IRS will work with taxpayers,” says Drumbl. “They might agree to an installment agreement and let you pay over time. That’s preferable to just putting your head in the sand and ignoring it.”

Drumbl also points out that the IRS has only 10 years after it has assessed taxes to collect them. “We actually see cases where some IRS debts just expire and the client doesn’t owe anything,” she says.

Another alternative, if you’re unemployed or not earning enough to pay your taxes, is to request “currently not collectible” status. This means the IRS will leave you alone and check again in maybe a year to see if your situation has improved. “Instead of facing wage garnishment, you will be able to keep the regular amount of pay check ,” says Drumbl, “and I count that a success.”

One case that stands out is a taxpayer who was trying to deal with his tax issues through the U.S. Tax Court.

“For a number of reasons, he was at a disadvantage in dealing with the IRS,” says Drumbl. “The students eventually worked out what the problem was. All he needed to do was fill out one government form, then submit it to the right place. The IRS conceded the case.”

“He probably couldn’t have worked this out on his own,” says Drumbl, “because he didn’t have the right access to the right people in the right agencies — no fault of his at all. He was so grateful that we were able to make the problem go away.”

The students will also help small business owners. “Sometimes they don’t know what they’re doing with taxes,” says Drumbl, “and it can get complicated fairly quickly. They may be repeating the same problem year after year which can run up huge debts quite easily.”

Overall, Drumbl is happy with the results the students get. “More often than not we have been able to get some level of success for our clients” she says. “We have also had some cases where we have to say there’s nothing we can do for you. In these cases it might be that they have the ability to pay their debt or that they are being unrealistic as to how the IRS works.”

The types of assistance the clinic provides include, but are not limited to: earned income credit; deficiency notices; collection disputes; liens and levies; installment agreements; offers in compromise; failure to file tax returns; audits; appeals; tax court representation; innocent spouse relief; injured spouse claims; identity theft.

The Clinic operates completely independent of, and is not associated with, the IRS or the federal government. It can only provide legal representation to taxpayers whose income does not exceed 250% of the annual Federal Poverty Guidelines. For details please see the Tax Clinic Web site.