September 24, 2019 | A case handled by the Pepperdine Low Income Tax Clinic was included by National Taxpayer Advocate Nina E. Olsen in her yearly report to the U.S. Congress. The report on the Low Income Taxpayer Clinic (LITC) Program, which unites a nationwide network of independent organizations under a shared mission to protect taxpayer rights, is titled “Providing Access to Justice for U.S. Taxpayers.” The Pepperdine Low Income Tax Clinic case involved a successful audit reconsideration on behalf of a disadvantaged widow.
Excerpt from “Providing Access to Justice for U.S. Taxpayers”
An LITC successfully used an audit reconsideration to reduce a taxpayer’s tax liability by over $1 million. The taxpayer, a widow who prior to her husband’s passing had never handled financial matters, was living on her husband’s fixed pension of several thousand dollars per month. She was desperate for help when she walked into the clinic. The taxpayer owed over $800,000 to the IRS and over $200,000 to a state tax agency. The clinician working the case discovered she had been taken advantage of by almost everyone from whom she had requested help. Her CPA charged her $10,000 to help her with a tax return when the fair market value for the services would have been $900, and he still completed it incorrectly. The LITC requested an audit reconsideration due to the mishandling of the original tax return and the subsequent audit. This request resulted in a reduction of the IRS balance to under $4,000 and the state balance to $0, resulting in over $1 million in tax reduction for the taxpayer.
The complete report may be found here (Pepperdine case on page 9)