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GRANT APPLICATION
Package and Guidelines
IMPORTANT CONTACT INFORMATION
GRANT ADMINISTRATION AND ELIGIBILITY INFORMATION
Grant Program Office
Internal Revenue Service
Office: 202-317-4700
Taxpayer Advocate Service Fax: 877-477-3520
LITC Program Office
Email: [email protected]
Attention:
Hours of Operation: 8:00 a.m. – 4:30 p.m. EST
TA:LITC, Room 1034
1111 Constitution Ave., NW
Washington, DC 20224
LITC Toolkit (only available to funded grantees)
www.litctoolkit.com
LITC Grant Program on IRS.gov
www.taxpayeradvocate.irs.gov/Tax-Professionals/Low-Income-Taxpayer-Clinics
Dun and Bradstreet Data Universal Numbering Systems (DUNS) Number
fedgov.dnb.com/webform
Helpdesk: 866-705-5711
System for Award Management (SAM)
www.sam.gov
Online Grant Application Submission
www.grants.gov
Helpdesk: 800.518.4726
Email: [email protected]
Non-Competitive Continuation (NCC) Entry
www.grantsolutions.gov
Helpdesk: 202.317.3058
Department of Health and Human Services (HHS) Payment Management System
www.dpm.psc.gov
Current Poverty Guidelines
aspe.hhs.gov/poverty
Definition of Income per U.S. Bureau of the Census
www.census.gov/cps/about/cpsdef.html
Civil Rights Reporting
www.irs.gov/Advocate/Your-Civil-Rights-Are-Protected
Office of Management and Budget (OMB)
www.whitehouse.gov/omb/circulars_index-ffm
INTERNAL REVENUE SERVICE INFORMATION
Tax Forms
www.irs.gov/Forms-&-Pubs
Federal Tax Compliance Verification (Internal Revenue Service)
877-829-5500 (tax exempt and government entity returns)
800-829-4933 (business and specialty tax returns)
866-699-4096 (excise tax and Form 2290 returns)
IRS Tax Exempt and Government Entities Customer Service Line
www.irs.gov/Charities-&-Non-Profits/Where-Is-My-Exemption-Application%3F
Helpdesk: 877-829-5500
General IRS Information
www.irs.gov
Helpdesk: 800-829-1040
Becoming an IRS Partner to Help in Your Community
www.irs.gov/Individuals/Become-an-IRS-Partner-to-Help-in-Your-Community
TAXPAYER TOOLKIT
Taxpayer Advocate Service
http://www.taxpayeradvocate.irs.gov
UNITED STATES TAX COURT CONTACTS
United States Tax Court Clinical Program
http://www.ustaxcourt.gov/clinics.htm
How to Gain Admission to Practice Before the Tax Court
See Tax Court Rule 200, available at www.ustaxcourt.gov
MAY 2014
Dear Prospective Low Income Taxpayer Clinic Grant Applicant:
I am pleased to announce the opening of the 2015 Low Income Taxpayer Clinic (LITC)
grant application period, which runs through June 20, 2014. The Taxpayer Advocate
Service (TAS) is committed to enhancing the LITC Program’s quality and coverage.
LITCs provide representation, education, and advocacy on behalf of low income
taxpayers and taxpayers who speak English as a second language. The LITC program
office facilitates this mission by providing guidance and assistance to grantees and
potential applicants.
To improve the application process and reporting for organizations awarded a grant,
we’ve moved to a paperless process through www.grants.gov and www.grantsolutions.gov.
I am aware that effort spent completing applications and reports, while necessary, takes
time that could be spent assisting taxpayers. These changes simplify the application
and reporting process and make them as painless as possible.
Some changes to the program this year include:
• Upcoming Requirement to Provide Controversy Services – Beginning in grant
year 2016, the LITC Program will no longer issue grants to clinics only offering
outreach and education to the English as a Second Language (ESL) community.
All clinics will be expected to offer and report services provided to ESL taxpayers. However, in order to receive a grant, a clinic must provide controversy
representation to low income taxpayers.
• New Policy on Participation in the United States Tax Court Clinical Program –
All LITCs that provide controversy services are encouraged to participate in the
Tax Court clinical program. The LITC Program may require as a condition of the
grant that certain clinics apply to participate.
• Reorganization of Publication 3319 – This year’s Publication 3319 has been reorganized to help users find guidance on the application process and the requirements placed on grantees after receiving an award.
• Increased Use of Grant Solutions – Grantees will now use the
www.grantsolutions.gov website to take all actions regarding their grant (except
for draw down of funds which is done in the Payment Management System).
This includes accepting the notice of award, submitting a revised budget, reporting changes in the program plan or key clinic staff, filing an Interim and Year-End
Report, and submitting non-competitive continuation (NCC) request for funding.
TAS remains committed to achieving maximum access to representation for low
income taxpayers under the terms of this grant program. Thus, in awarding 2015 LITC
grants, we will continue to work toward the following program goals:
• Ensuring that each state (plus the District of Columbia and Puerto Rico) is
served by at least one clinic; and
• Ensuring that grant recipients demonstrate that they are serving geographic
areas that have sizable populations eligible for and requiring LITC services.
To meet these goals, the IRS encourages applications from clinics located in the following underserved areas:
Identified Underserved Areas
States and Territories
Alabama, Alaska, Georgia, Kansas, Mississippi, North Dakota,
South Dakota, and Puerto Rico
Metropolitan Areas
Los Angeles, California,
including these counties:
Los Angeles, Kern, Riverside, Ventura
Sacramento, California,
including these counties:
El Dorado, Placer, Sacramento,
San Joaquin, Stanislaus
Northern Virginia
including these counties:
Arlington, Fairfax, Loudon, Prince William
Notwithstanding the criteria detailed above, applications or NCCs from all areas will
receive serious consideration.
The LITC Program Office may award grants to qualifying organizations to fund oneyear to three-year project periods. Any clinic currently receiving an LITC grant that
does not expect to use all of its funds during the 2014 grant year must contact the
LITC Program Office immediately so that other clinics and taxpayers may benefit from
those funds. Moreover, any clinic currently receiving a grant that does not intend to
apply for a 2015 grant must notify the LITC Program Office immediately so we can
solicit coverage of that service area.
At least 90 percent of the taxpayers represented by a clinic receiving federal funding
to operate a controversy program must have incomes that do not exceed 250 percent
of the Federal Poverty Guidelines. The Department of Health and Human Services
updated the guidelines on January 22, 2014, which can be found in section III.B.ii.a,
Poverty Guidelines of this Publication.
This package contains current program guidelines, eligibility criteria, application
materials, instructions on how to file an application or an NCC, and detailed reporting
requirements. The cost of preparing and submitting an application or an NCC is the
responsibility of each applicant.
To be considered for 2015 LITC Program grant funding, all applications and NCCs must
be submitted electronically by June 20, 2014 via www.grants.gov or
www.grantsolutions.gov, respectively.
The LITC Program Office will notify each applicant whether it will be awarded a grant
by October 31, 2014.
If you have questions about the LITC Program or grant application/NCC process,
please contact the LITC Program Office at 202-317-4700 (not a toll-free call) or by
email at [email protected].
I appreciate your interest in the LITC Program and look forward to working with the
2015 Low Income Taxpayer Clinic grantees to improve the fairness and quality of
federal tax administration.
Sincerely,
Nina E. Olson
National Taxpayer Advocate
GENERAL TABLE OF CONTENTS
I INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A
B
C
D
E
Mission Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
What is Included in Publication 3319? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Contacting the Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
LITC Program Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II QUALIFICATIONS FOR FUNDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A
B
C
D
E
F
Administrative / Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Core Term Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Matching Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Grant Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Startup Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
III OPERATING A CLINIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A Standards of Operation for All Clinics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
B Standards of Operation for Controversy Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
C Standards of Operation for ESL Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
IV COMPLIANCE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
A
B
C
D
E
F
G
Uniform Administrative Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Lobbying Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Civil Rights Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Other Assurances and Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Cost Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Matching Funds Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
OMB Audit Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
V APPLICATION AND SELECTION PROCESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
A
B
C
D
E
F
Completion and Submission of the LITC Program Grant Application Package . . . . 52
Completion and Submission of a Non-Competitive Continuation (NCC) . . . . . . . . 53
Evaluation and Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Selection of Grant Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Submitting a Revised Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
VI POST-AWARD REQUIREMENTS OF GRANTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
A
B
C
D
General Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Notification Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
Managing Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
VII
LITC PROGRAM OFFICE RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
A General Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
B Assitance and Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
C Suspension or Termination of a Grant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
TABLE OF CONTENTS
DETAILED TABLE OF CONTENTS
I INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A Mission Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B What is Included in Publication 3319? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
C Contacting the Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
D What’s New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
E LITC Program Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
i History of the LITC Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ii Overview of IRC § 7526 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II QUALIFICATIONS FOR FUNDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A Administrative / Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B Core Term Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
C Matching Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D Grant Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
E Start-up Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
F Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
III OPERATING A CLINIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A Standards of Operation for All Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
i Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ii Infrastructure and Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
a Taxpayer Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
b Physical Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
c Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
d Tax Library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
e Annual LITC Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
iii Outreach and Community Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
a Focused Outreach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
b Publicity Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
c Community Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
d Identifying Successful Outreach Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
iv Networking and Mentoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
a Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
b Mentoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
c Technical Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
v Systemic Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
vi Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
a Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
vii
viii
ix
x
xi
xii
b Training Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
c Media Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Volunteers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
a Quality Assurance Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
b Pro Bono Panel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
c Referrals of Taxpayers to Volunteers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Preparing Tax Returns and ITIN Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Recordkeeping and File Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
a Grant Expenditure Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
b Client Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
c Case Management Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
d Recommended Back-Up File System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
e Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
f Records Retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Tax Compliance and Federal Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Name or Organizational Status Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Client Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
B Standards of Operation for Controversy Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
i Controversy Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ii Low Income Taxpayers and the 90/250 Requirement . . . . . . . . . . . . . . . . . . . . . 24
a Poverty Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
b Definition of Income for Purposes of the 90/250 Requirement . . . . . . . . . 26
c Definition of Family Unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
iii Amount in Controversy Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
iv Student Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
v Preparing Tax Returns and ITIN Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
vi Participation in the United States Tax Court Clinical Program . . . . . . . . . . . . . . 30
vii Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
C Standards of Operation for ESL Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
i Identifying an Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ii Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
iii Preparing Tax Returns and ITIN Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
IV COMPLIANCE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
A Uniform Administrative Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
B Lobbying Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
C Civil Rights Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
i Civil Rights Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ii Civil Rights Division Contact Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
D Other Assurances and Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
i Trafficking Victims Protection Act of 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ii
iii
iv
v
Federal Funding Accountability and Transparency Act (FFATA) . . . . . . . . . . . . . 41
Corporate Felony Convictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
System for Award Management, Employer Identification . . . . . . . . . . . . . . . . . . 42
Other Applicable Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
E Cost Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
F Matching Funds Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
i Valuation of Matching Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ii Volunteer Services Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
iii Volunteer Services of a Qualified Representative . . . . . . . . . . . . . . . . . . . . . . . . . . 47
iv Documentation of Matching Funds Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
G OMB Audit Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
V APPLICATION AND SELECTION PROCESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
A Completion and Submission of the LITC Program Grant Application Package . . . . 52
B Completion and Submission of a Non-Competitive Continuation (NCC) . . . . . . . . 53
C Evaluation and Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
i Eligibility Screening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ii Evaluation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
a Technical Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
b Program Office Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
D Selection of Grant Recipient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
E Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
F Submitting a Revised Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
VI POST-AWARD REQUIREMENTS OF GRANTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
A General Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
B Notification Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
i Significant Changes in LITC Program Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ii Adjustments to Program Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
iii Non-Use of Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
iv Changes in LITC Contact information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
v Withdrawl from LITC Program or Terminatin of Grant . . . . . . . . . . . . . . . . . . . . . 61
C Managing Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
i Accessing Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ii Maintaining Funds in an FDIC Insured Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
iii Interest on Advances of Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
D Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
i Interim Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ii Year-End Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
VII LITC PROGRAM OFFICE RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6ċ
A General Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
B Assistance and Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
i Site Assitance Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
C Suspension or Termination of a Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
i Grounds for Suspension or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii Notification to Grantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii Objections and Reconsideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iv Post-Termination Responsibilites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Paperwork Reduction Act Notice:
This application package is provided for awards under the Low Income Taxpayer Clinic Grant Program. The
information is requested from the applicants in order to determine their eligibility for an LITC grant and
evaluate their grant proposals. Applicants are not required to respond to this collection of information unless
it displays a currently valid OMB number. The estimated average burden associated with this collection
of information is 60 hours per respondent for program sponsors and 2 hours for student and program
participants. Comments concerning the accuracy of this burden estimate and suggestions for reducing
this burden should be directed to the IRS, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP,
1111 Constitution Ave.NW, IR-6526, Washington, DC 20224. Do not send grant application forms to this
address.Grant applications should be sent to: Internal Revenue Service, Taxpayer Advocate Service, LITC
Program Office, TA:LITC, Room 1034, 1111 Constitution Ave., NW, Washington, DC 20224.
Catalog of Federal Domestic Assistance Number: 21.008 OMB Approval No. 1545-1648
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LOW INCOME TAXPAYER CLINIC
INTRODUCTION
I INTRODUCTION
A Mission Statement
Low Income Taxpayer Clinics (LITCs) ensure the fairness and integrity of the tax system by educating low income taxpayers about their rights and responsibilities, by providing pro bono representation to taxpayers in tax disputes with the IRS, by conducting
outreach and education to taxpayers who speak English as a second language (ESL),
and by identifying and advocating for issues that impact low income taxpayers.
Important Dates for 2015 LITC Grantees
Application period
May 5 – June 20, 2014
Program Office review and evaluation
June – September 2014
Notification of selection/non-selection
October 2014
LITC Grantee Conference
December 8 - December 11, 2014
Program period
January 1, 2015 – December 31, 2015
Interim report due
July 31, 2015
Year-End report due
March 31, 2016
B What is Included in Publication 3319?
Publication 3319 outlines requirements for operating a qualified Low Income Taxpayer
Clinic under Internal Revenue Code (IRC) § 7526. This publication contains:
i Eligibility requirements, including mandatory assurances and certifications;
ii Standards of operation;
iii Post-award requirements;
iv Application forms and instructions; and
v Reporting forms and instructions.
This publication, including the accompanying Appendices, should be retained for
future reference.
C Contacting the Program Office
Potential applicants may direct questions concerning the LITC Program or the application process to the LITC Program Office via:
LOW INCOME TAXPAYER CLINIC
1
Email: [email protected]; or
Phone: 202-317-4700 (not a toll-free number); or
Mail:
Internal Revenue Service
Taxpayer Advocate Service
LITC Program Office
TA:LITC, Room 1034
1111 Constitution Ave., NW
Washington, DC 20224.
Current grantees should direct questions about reporting or program requirements
directly to their assigned Advocacy Analyst.
D What’s New
We continue to improve the application, reporting, and administrative process for LITC
grantees based on the comments and suggestions we received from clinics and the
Program Office staff. Some of the changes are:
`` New OMB Uniform Guidance – The Office of Management and Budget (OMB)
released 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards on December 26, 2013. The new guidance supersedes and streamlines OMB requirements affecting LITC grants: OMB
Circulars A-21, A-110, A-122, and A-133, among others. The new guidance applies
to grantees with fiscal years beginning on or after December 26, 2014. The new
guidance, after promulgation of a regulation by the Department of Treasury, will
apply to 2015 LITC grants, except for audit requirements, which will apply to audits
of fiscal years beginning on or after December 26, 2014.
`` Upcoming Requirement to Provide Controversy Services – Beginning in grant year
2016, the LITC Program will no longer issue grants to clinics only offering outreach
and education to the English as a Second Language (ESL) community. All clinics
will be expected to offer and report services provided to ESL taxpayers. However in
order to receive a grant, a clinic must provide controversy representation services
to low income taxpayers.
`` Policy on Participation in the United States Tax Court Clinical Program – All LITCs
that provide controversy services are encouraged to participate in the Tax Court
clinical program. The LITC Program may require as a condition of the grant that
certain clinics apply to participate.
`` Reorganization of Publication 3319 – This year’s Publication 3319 has been reorganized to help users find guidance on the application process, and the requirements placed on grantees after receiving an award.
`` Increased Use of Grant Solutions – Grantees will now use the www.grantsolutions.gov
website to take all actions regarding to their grant (except for draw down of funds
2
LOW INCOME TAXPAYER CLINIC
which is done in the Payment Management System). This includes accepting the
notice of award, submitting a revised budget, reporting changes in the program
plan or key clinic staff, filing an Interim and Year-End Report, and submitting a
non-competitive continuation (NCC) request for funding.
The new OMB uniform guidance mentioned above helps ensure the highest level of
integrity in the financial management and operation of federal grant programs, and
strengthen accountability for federal funds by improving policies that protect against
waste, fraud, and abuse. In addition, the guidance aims to minimize the time applicants and grantees must spend complying with administrative requirements. See 78
Fed. Reg. 78590-78608 (Dec. 26, 2013).
E LITC Program Overview
i History of the LITC Program
As part of the Internal Revenue Service (IRS) Restructuring and Reform Act of
1998, Congress authorized funding for the LITC grant program. The program is
designed to provide access to representation for low income taxpayers, so that
achieving a correct outcome in an IRS dispute does not depend on the taxpayer’s
ability to pay for representation, and to encourage the creation of programs to
inform individuals for whom English is a second language about their rights and
responsibilities as taxpayers.
The IRS created the LITC Program Office in 1999 to provide oversight, guidance,
and assistance to LITC grantees and prospective applicants. The Director of the
LITC Program Office reports directly to the National Taxpayer Advocate.
The IRS is authorized to award grants to provide matching funds for the development, expansion, or continuation of qualified LITCs. In 1999, grants were awarded
to 34 clinics. As of 2014, there are 133 clinics funded through the LITC Program.
ii Overview of IRC § 7526
IRC Section 7526 authorizes the Secretary of the Treasury to award matching
grants of up to $100,000 per year to qualifying organizations that represent low
income taxpayers involved in controversies with the IRS, educate ESL taxpayers
about their rights and responsibilities as taxpayers, or both. Representation, education, and advocacy are the primary functions of LITCs.
Low income status is determined by reference to the Federal Poverty Guidelines,
which are updated annually (usually in late January) by the Department of Health
and Human Services (HHS). The current LITC Income Guidelines can be found in
section III.B.ii.a, Poverty Guidelines, of this publication.
Grant awards may cover periods of up to three years duration. Funding is provided
for one-year periods, subject to the availability of annually appropriated funds.
LOW INCOME TAXPAYER CLINIC
3
The grant year begins on January 1 and ends on December 31. With respect to
multi-year grant awards, the second and third years will be funded subject to satisfactory performance, compliance with grant terms, and availability of appropriated
funds. All grant funds awarded to a grantee must be used for the LITC program
specifically authorized in the notice of award.
The text of IRC § 7526 is reprinted in full below:
§ 7526. Low-income taxpayer clinics.
(a) In general. The Secretary may, subject to the availability of appropriated funds,
make grants to provide matching funds for the development, expansion, or continuation of qualified low-income taxpayer clinics.
(b) Definitions. For purposes of this section—
(1) Qualified low-income taxpayer clinic.
(A) In general. The term “qualified low-income taxpayer clinic” means a
clinic that—
(i) does not charge more than a nominal fee for its services (except for
reimbursement of actual costs incurred); and
(ii) (I) represents low-income taxpayers in controversies with the
Internal Revenue Service; or
(II) operates programs to inform individuals for whom English is a
second language about their rights and responsibilities under this title.
(B) Representation of low-income taxpayers. A clinic meets the requirements of subparagraph (A)(ii)(I) if—
(i) at least 90 percent of the taxpayers represented by the clinic have
incomes which do not exceed 250 percent of the poverty level, as determined in accordance with criteria established by the Director of the
Office of Management and Budget; and
(ii) the amount in controversy for any taxable year generally does not
exceed the amount specified in section 7463
(2) Clinic. The term “clinic” includes—
(A) a clinical program at an accredited law, business, or accounting
school in which students represent low-income taxpayers in controversies arising under this title; and
(B) an organization described in section 501(c) and exempt from tax
under section 501(a) which satisfies the requirements of paragraph (1)
through representation of taxpayers or referral of taxpayers to qualified
representatives.
(3) Qualified representative. The term “qualified representative” means any
individual (whether or not an attorney) who is authorized to practice before
the Internal Revenue Service or the applicable court.
4
LOW INCOME TAXPAYER CLINIC
(c) Special rules and limitations.
(1) Aggregate limitation. Unless otherwise provided by specific appropriation,
the Secretary shall not allocate more than $ 6,000,000 per year (exclusive of
costs of administering the program) to grants under this section.
(2) Limitation on annual grants to a clinic. The aggregate amount of grants
which may be made under this section to a clinic for a year shall not exceed $
100,000.
(3) Multi-year grants. Upon application of a qualified low-income taxpayer
clinic, the Secretary is authorized to award a multi-year grant not to exceed 3
years.
(4) Criteria for awards. In determining whether to make a grant under this
section, the Secretary shall consider—
(A) the numbers of taxpayers who will be served by the clinic, including
the number of taxpayers in the geographical area for whom English is a
second language;
(B) the existence of other low-income taxpayer clinics serving the same
population;
(C) the quality of the program offered by the low-income taxpayer clinic,
including the qualifications of its administrators and qualified representatives, and its record, if any, in providing service to low-income taxpayers;
and
(D) alternative funding sources available to the clinic, including amounts
received from other grants and contributions, and the endowment and
resources of the institution sponsoring the clinic.
(5) Requirement of matching funds. A low-income taxpayer clinic must provide matching funds on a dollar-for-dollar basis for all grants provided under
this section. Matching funds may include—
(A) the salary (including fringe benefits) of individuals performing services for the clinic; and
(B) the cost of equipment used in the clinic.
Indirect expenses, including general overhead of the institution sponsoring
the clinic, shall not be counted as matching funds.
LOW INCOME TAXPAYER CLINIC
5
II QUALIFICATIONS FOR FUNDING
A ADMINISTRATIVE/ELIGIBILITY REQUIREMENTS
To receive an LITC grant, an organization must be a qualified clinic that represents low
income individual taxpayers in controversies with the IRS or operates programs to
inform ESL taxpayers about their rights and responsibilities as U.S. taxpayers. Additionally, qualified clinics must offer services for free or for no more than a nominal fee.
NOTE: Beginning in grant year 2016, the LITC Program will no longer issue grants to clinics
only offering outreach and education to the English as a Second Language (ESL)
community. All clinics will be expected to offer and report services provided to ESL
taxpayers. However in order to receive a grant, a clinic must provide controversy
representation services to low income taxpayers.
A clinic may provide qualifying LITC services within a broader spectrum of activity. A
clinic may represent clients in non-tax matters as well as tax matters as long as LITC
grant funds matching funds are only used to support activities permissible under IRC
section 7526 and the guidance contained in this publication.
A clinic may not make a subgrant of LITC grant funds to another organization or
individual. A subgrant is a payment to carry out a controversy or ESL program, as
compared to a payment for providing goods and services directly to the grantee. For
example, a clinic may not pay another organization to prepare and conduct its ESL
educational activities, although the clinic could pay a firm to translate its educational
materials into another language.
NOTE: Applicants must have a current registration with the System for Award Management,
an Employer Identification Number, and a Data Universal Identifier Number. For more
information, see II.J.viii, System for Award Management, Employer Identification
Number, and Universal Identifier Requirements.
B Core Term Definitions
Clinic means a program or organization that offers representation services to low
income taxpayers. Examples of a clinic include:
`` A clinical program at an accredited law, business or accounting school in which
students represent low income taxpayers in controversies arising under the
Internal Revenue Code; and
6
LOW INCOME TAXPAYER CLINIC
QUALIFICATIONS FOR FUNDING
`` An organization described in IRC § 501(c) and exempt from tax under
IRC § 501(a) that represents low income taxpayers in controversies with the
IRS or refers taxpayers to qualified representatives.
Qualified low income taxpayer clinic means a clinic eligible to receive a matching
grant under IRC § 7526 which:
`` Does not charge more than a nominal fee for services (except reimbursement
of actual costs incurred); and
`` Represents low income taxpayers in controversies with the IRS where the
amount in controversy generally does not exceed the amount specified in IRC §
7463, and meets the 90/250 requirement (see section II.B.ii, Low Income Taxpayer and the 90/250 Requirement); or
`` Operates programs to inform ESL taxpayers of their rights and responsibilities
as taxpayers.
NOTE: Beginning in FY 2016, the LITC program will no longer fund ESL only programs and all
grantees must provide controversy services.
Low income taxpayer means an individual whose income does not exceed
250 percent of the poverty level, as determined in accordance with official
guidance published by the federal government. An individual who owns a sole
proprietorship or who is the sole shareholder of an S-corporation is a low income
taxpayer if his or her income does not exceed 250 percent of the poverty level,
as determined in accordance with official guidance published by the federal
government. Thus, an LITC may provide assistance to the individual regarding
the business’s tax obligations because the individual is solely liable for those
obligations. In contrast, a business entity, such as a partnership, corporation, or
S-corporation with multiple shareholders, is not a low income taxpayer, regardless
of income.
Controversy means a dispute between a taxpayer and the IRS concerning the determination, collection, or refund of any tax, additions to tax, penalties, or interest
under the Internal Revenue Code. The dispute with the IRS may arise in a federal
court or a function of the IRS, including, but not limited to, account adjustments,
examination, collection, appeals, or other specialized unit. A controversy also
means a dispute between a taxpayer and a state or local tax agency if the dispute
concerns the same or a related tax matter for which the LITC is representing the
taxpayer in a dispute with the IRS. A controversy includes a dispute related to
the tax provisions of the Affordable Care Act. A controversy does not include a
criminal tax matter, but may include certain civil actions arising under the code, for
example those arising under IRC §§ 7431 - 7435.
LOW INCOME TAXPAYER CLINIC
7
Amount in controversy means the amount in dispute for any taxable year. The
amount includes the tax liability in dispute, plus any penalties, and additions to
tax. Interest is generally not included in the amount in controversy. If, however,
the amount of interest is disputed independently from the associated tax liability,
then the amount in controversy includes interest. The amount in controversy is
not necessarily the entire amount specified in a statutory notice of deficiency or
a notice of determination, as the taxpayer may choose to dispute less than the
amount specified therein. If there are multiple tax years reflected in a notice of
deficiency or a notice of determination, the amount in controversy is the amount in
dispute for a single tax year.
Nominal fee means a fee that is slight, inconsiderable or trifling, taking into account all facts and circumstances, including geographic location. A nominal fee
does not include reimbursement for those costs actually incurred (photocopies,
courts costs, and expert witness fees, for example).
Representing a taxpayer in a controversy means acting as an agent of the taxpayer
in an advocacy capacity in a matter before the IRS, the United States Tax Court,
another federal court, or before a state or local tax authority when the clinic is representing the taxpayer in a related federal controversy. Fact finding or advice alone
is not representation.
Consultation means a discussion with a taxpayer designed to provide advice or
counsel about a specific tax matter that does not result in representation of the
taxpayer.
Program to inform means the conduct of a variety of educational activities for the
ESL population served by the LITC, such as holding workshops or publishing and
distributing information about tax issues and taxpayer rights relevant to ESL taxpayers, answering common tax questions relevant to ESL taxpayers, and consulting with ESL taxpayers on a one-on-one basis.
Program Plan means an outline of a clinic’s planned operations, including a description of the particular services to be offered, how the services will be delivered,
the intended recipients of the services, and numerical goals.
Referral activities for which grant funds may be spent are the referral of low income taxpayers to a pro bono panel for representation or consultation.
Pro bono panel means a group of qualified representatives who do not charge for
representing or advising low income taxpayers.
Qualified representative means an attorney, certified public accountant, or
enrolled agent who is authorized to practice before the IRS or an individual admitted to practice before the applicable court regarding a controversy with the IRS.
See Tax Court Rule 200, available at www.ustaxcourt.gov for information about
gaining admission to practice before the Tax Court. A student working under the
8
LOW INCOME TAXPAYER CLINIC
supervision of a qualified representative is a qualified representative if the IRS has
authorized that student to practice before the IRS pursuant to 31 C.F.R. Part 10
(Treasury Department Circular No. 230) or the applicable court has authorized the
student to appear pursuant to rules of the court.
NOTE: For more information on student representation of taxpayers, see section III.B.iv,
Student Representation.
C Matching Funds
The LITC Program is a matching grant program. All grantees must provide
matching funds on a dollar-for-dollar basis for all federal funds received from the
LITC Program. Only funds that are used in support of the LITC Program qualify as
matching funds.
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards, 2 CFR Part 200.306 provides that all contributions, including cash
and third-party in-kind, shall be accepted as part of the grantee’s cost sharing or
matching when such contributions:
`` Are verifiable from the grantee’s records;
`` Are not included as contributions for any other federally assisted project or
program;
`` Are necessary and reasonable for proper and efficient accomplishment of project or program objectives;
`` Are allowable under the applicable cost principles;
`` Are not paid by the federal government under another award, except where
authorized by the federal statute to be used for cost sharing or matching;
`` Are provided for in the approved budget when required by the federal awarding
agency; and
`` Conform to other provisions of 2 CFR Part 200, when applicable.
NOTE: Grant funds received from the Legal Services Corporation are not considered federal
funds and therefore can be used as a source of matching funds.
For more detailed information regarding the matching funds requirement, see section IV.C, Matching Funds Requirement.
D Grant Period
The LITC Program may award grants for up to a three-year period to clinics evaluated
under the award process. New clinics are only eligible for a single year of grant fund-
LOW INCOME TAXPAYER CLINIC
9
ing; experienced clinics may apply for multi-year grants. Awarding of multi-year grants
is at the discretion of the LITC Program Office. Thus, applicants that apply for a multiyear grant may be awarded a single-year grant. Clinics awarded a multi-year grant
based on acceptance of their program performance plans must submit a Non-Competitive Continuation (NCC) request for continued funding for the second and third
year of the grant period. Multi-year awardees will be reviewed annually for satisfactory performance and progress in meeting goals and objectives as well as compliance
with grant terms. The funding level for subsequent years will be reviewed annually
and may be increased or decreased at the discretion of the LITC Program Office, and is
subject to the availability of funds annually appropriated for the LITC Program.
E Start-up Expenses
Start-up operations qualify for grant funding. A clinic may be awarded an LITC grant
although it anticipates that it will not begin serving taxpayers until after the close of
the grant year for which the grant is awarded. Such applicants still must satisfy the
statutory matching funds requirement during the year covered by the grant and must
meet all reporting requirements to provide information on the status of the start-up. In
addition, LITC grants to these applicants will be conditioned on the conduct of qualifying activities during the immediately succeeding grant year; however, grant funds for
the immediately succeeding grant year are not guaranteed to be awarded.
F Fees
IRC § 7526 provides that a clinic must not charge more than a nominal fee for
clinic services, in addition to reimbursement of actual costs incurred (e.g.,
photocopying and court costs). If a clinic is charging a fee, the clinic must
charge that same fee to everyone, regardless of the services being sought.
Remember: The goal of the LITC Program is to enhance access to legal
services for low income taxpayers. If the amount that a clinic charges results
in fewer taxpayers served, the goal of the Program is not being achieved and
that amount is not nominal.
NOTE: A clinic may not charge a separate or additional fee (even if it is nominal) for the
preparation of a tax return (except for reimbursement of actual costs incurred,
e.g., photocopying).
III
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III OPERATING A CLINIC
A Standards of Operation for All Clinics
A
The LITC Program Office has developed baseline standards of operation for LITC grant
recipients. The standards ensure that all LITCs provide consistent and quality service to low income and ESL taxpayers. Performance measures have been integrated
throughout these standards. All LITCs are responsible for complying with the following requirements:
i Staffing
All clinics are required to fill the following positions:
Qualified Tax Expert (QTE) – The QTE is an attorney, certified public accountant,
or enrolled agent who is currently authorized to practice before the IRS and has
sufficient tax law expertise to oversee technical substantive tax matters. Clinics
receiving controversy funding are required to have a QTE on staff. Clinics receiving ESL funding only are not required to have a QTE on staff, but must identify
a QTE who is available to review all educational materials for accuracy before
distribution.
Qualified Business Administrator (QBA) – The QBA is a staff member with sufficient business administration expertise to oversee the clinic’s business operations.
If a department, as opposed to a single individual, fulfills this requirement, please
provide details about the staff member who oversees the department. The QBA
must demonstrate education or experience with business or program administration, such as, but not limited to, internal controls; management of federal, state or
local grant funding; budget administration and procurement; or the equivalent.
Clinic Director – The Clinic Director is the staff member who has overall management responsibility for the clinic. The Clinic Director may also be the QTE or QBA,
if qualified. The Clinic Director manages day-to-day clinic operations, prepares or
reviews the required clinic reports, and signs reports as the clinic’s authorized representative. The Clinic Director serves as the primary contact person for both the LITC
Program Office and the Local Taxpayer Advocate’s office.
ii Infrastructure and Resources
a Taxpayer Representation
All controversy programs must have at least one staff member who represents
taxpayers before the IRS. That individual must be an attorney, certified public
accountant, or enrolled agent currently authorized to practice before the IRS. In
LOW INCOME TAXPAYER CLINIC
11
addition, all controversy programs must have a staff member or a pro bono panel
member who is admitted to practice before the United States Tax Court to handle litigation matters. All ESL programs must maintain a pro bono panel or have
an arrangement with an LITC that provides representation services to which
taxpayers with controversy matters can be referred.
b Physical Location
All LITCs must maintain a bona fide physical place of business and a permanent
address. A bona fide office means a permanent office space where clients can
be received, files are kept, the telephone is answered, and the LITC staff can be
reached during normal business hours. Clinics with only a virtual office will not
be selected to receive LITC grant funds.
c Training
Each clinic must provide quality training to the clinic staff, volunteers, and other
program participants to increase knowledge and skills necessary to effectively
deliver the services for which the clinic is funded. The QTE will be required to
ensure and document that the LITC staff, volunteers, and other program participants receive appropriate training to enhance skills. The QTE, QBA, and Clinic
Director are encouraged to attend CPE programs run by the IRS and professional
organizations.
d Tax Library
LITCs must have convenient access to an adequate tax library and research
materials including the current version of the Internal Revenue Code and related
Treasury Regulations in hard copy or electronic format.
e Annual LITC Conference
Only clinics currently receiving funding or who have been awarded funding in the
upcoming grant year may attend the annual LITC conference. All clinics must
have at least one staff member attend the annual LITC conference. The Clinic
Director is required to attend the annual LITC conference in its entirety unless
the Director of the LITC Program Office has excused the Clinic Director from
attending all of part of the conference. If the Clinic Director is not the QTE, we
encourage both to attend the annual conference. The QBA is not required to
attend (unless he or she is also the Clinic Director) but may choose to attend. If
a clinic wishes to send more than two staff members to the conference, the clinic
must submit a written request to the Director of the LITC Program Office no
later than two weeks in advance of the conference.
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LOW INCOME TAXPAYER CLINIC
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A request by a Clinic Director to be excused from attending all or part of the
annual LITC conference must be submitted in writing to the Director of the LITC
Program Office no later than two weeks prior to the first day of the conference.
The request should identify the critical reason for the exception request, and the
name, title, and duties of any other clinic staff member who will attend the
annual conference in place of the Director.
NOTE: The Clinic Director and the QBA must attend a mandatory conference call held prior to
the LITC Conference.
The cost of attending the LITC Conference (e.g., transportation, hotel) is an allowable expense under the grant and should be included in an applicant’s budget.
Please note, however, that clinics cannot use LITC grant funds or matching funds
for more than two attendees.
NOTE: For more information on using grant funds to attend the annual LITC conference, see
section IV. E, Cost Principles.
iii Outreach and Community Partnerships
a Focused Outreach
Grantees are responsible for developing an outreach plan to effectively publicize
the LITC Program to low income taxpayers and ESL taxpayers. Outreach activities are efforts designed to provide information about the clinic and its services
directly to low income taxpayers or indirectly through other organizations or
groups that serve the low income taxpayers. ESL programs should identify
linguistic populations; controversy programs may focus outreach on low income
taxpayers in a geographic area or a specific segment of the low income taxpayer
community. Outreach plans should be completed in advance of the start of the
period during which representation and other assistance will be offered. To help
ensure taxpayers have convenient access to low-cost representation, clinics are
strongly encouraged to provide a toll-free number. Clinics may use grant funds
to operate a toll-free number.
b Publicity Materials
Publicity materials and announcements to advertise the services provided by an
LITC must focus on core services: representation in controversy cases or education of ESL or low income taxpayers.
LOW INCOME TAXPAYER CLINIC
13
NOTE: Clinics must include a message in all publicity materials, announcements, and
their website stating that the clinic does not generally provide tax return
preparation services.
Core controversy services to publicize include representation of taxpayers in examinations, appeals, collection matters, litigation or with specialized units of the
IRS that handle such matters as account disputes, identity theft, innocent spouse
relief, worker classification, or ITIN processing. Core ESL services include educational presentations for taxpayers about their rights and responsibilities, and
identification of topics that clinic staff can address during a presentation such as
tax recordkeeping, how to choose a competent tax preparer, or collection alternatives. All clinics should mention that they can provide consultations or advice
to individual taxpayers.
Publicity materials may not advertise tax return preparation services or ITIN
preparation assistance, as LITCs are permitted to provide these services only in
two limited contexts: if necessary to resolve a controversy or as an ancillary part
of an ESL program discussed in sections III.B.v and III.C.iii, Preparing Tax Returns
and ITIN Applications, of this publication, respectively).
BEST PRACTICE: Clinics are encouraged to publicize their program through their
organization’s website and through social networking sites.
Brochures, flyers, or other clinic information distributed in IRS offices must contain language to indicate the following two key principles: (1) Although the clinic
receives funding from the IRS, the clinic, its employees, and volunteers are not
affiliated with the IRS, and (2) A taxpayer’s decision to utilize services from an
LITC will not affect the taxpayer’s rights before the IRS. Such disclaimers need
not be worded exactly as above, but must convey these principles. In addition,
clinics may not use the IRS logo or LITC logo in any advertising materials.
The Supplemental Standards of Ethical Conduct for Employees of the Department of the Treasury (5 CFR Part 3101) prohibit IRS employees from recommending or referring taxpayers to specific attorneys or accountants in connection with any official business which involves or may involve the IRS. See 5 CFR
§ 3101.106(a). In addition, the Office of Government Ethics Standards of Ethical
Conduct for Employees of the Executive Branch (5 CFR Part 2635) prohibit employees, including IRS employees, from endorsing any product, service or enterprise. See 5 CFR § 2635.702(c) and 5 CFR § 2635.101(b)(8).
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Thus, while LITCs are encouraged to distribute their brochures, flyers, or other
clinic information to IRS offices to increase awareness of the LITC program,
LITCs should recognize that the IRS must abide by these ethics rules. Consequently, LITCs should not ask their local IRS office to refer taxpayers to any one
particular LITC. Local IRS offices can, however, provide taxpayers with information about all the LITCs in that geographic area, and can provide taxpayers with a
copy of Publication 4134.
c Community Partnerships
LITCs should develop and maintain relationships with other community-based
organizations that serve low income and ESL individuals. Effective community
partnerships help LITCs to enhance visibility in the community, access taxpayers in insular hard-to-reach communities, better understand non-tax issues that
affect low income individuals and families, and establish a framework for mutual
referrals of taxpayers in need of services. In the application, the applicant must
identify networks within the community or organizations with which it can work
to reach its identified audience.
d Identifying Successful Outreach Strategies
LITCs should also implement a process that tracks how taxpayers seeking
services learn about the program and the services offered. For example this
information could be obtained on the intake or screening form completed by
low income taxpayers requesting controversy representation. For ESL education
activities, the clinic could request that attendees indicate on a sign-in sheet how
they learned about the seminar. The sign-in sheet also allows the clinic to keep
track of the number of attendees served, without requiring individual names or
signatures.
iv Networking and Mentoring
a Networking
All clinics are encouraged to actively participate in a network with other clinics. Networks provide an opportunity for clinics to collaborate on tax issues that
affect low income and ESL taxpayers, discuss case strategies, share ideas on
education and outreach, and get training on tax practice and procedure. Networks can identify best practices and submit them to the LITC Program Office
for sharing with other clinics to improve the overall quality of the LITC Program.
LOW INCOME TAXPAYER CLINIC
15
b Mentoring
Mentors and other sources of technical assistance should be available for clinic
staff and volunteers. The LITC Program Office may ask experienced LITCs to
informally assist less experienced clinics with operational inquiries and technical
matters or issues.
c Technical Assistance
A technical assistance consultation is a discussion with a tax practitioner or
other service provider designed to give brief advice about a tax issues. Clinics
will report the number of technical assistance consultations provided on Form
13424-A, LITC Interim and Year-End Report General Information.
v Systemic Advocacy
One of the stated purposes of the LITC mission is to identify and advocate for
issues that impact low income taxpayers. LITCs may achieve this goal through a
variety of methods, including but not limited to: participating in advocacy projects with professional organizations, commenting on proposed IRS regulations
and guidance, authoring articles or publications, appearing on television or radio,
producing public service announcements, or submitting suggestions to the Systemic Advocacy Management System (SAMS), available through the IRS website (www.irs.gov/Advocate/Systemic-Advocacy-Management-System-SAMS). The
use of grant funds to perform certain lobbying efforts may be limited in regard to
legislation or potential legislation. See section IV. B., Lobbying Restrictions.
vi Confidentiality
a Disclosure
Tax professionals have ethical requirements to maintain client confidentiality.
See, for example, American Bar Association Model Rule of Professional Responsibility 1.6 and IRC §7525.
An LITC’s employees and volunteers generally must not disclose information
relating to the representation of a client unless the client gives informed consent.
The confidential nature of each taxpayer’s information must be respected by an
LITC’s employees and volunteers at all times, and each employee and volunteer
must safeguard taxpayer information against inadvertent or unauthorized disclosure. Thus, an LITC must have adequate safeguards in place to ensure taxpayer
information is secure, and only those who have a need to know to assist the
taxpayer are allowed access to the taxpayer’s information.
While generally a grantee, its employees, and volunteers are not treated as tax
return preparers for purposes of preparer penalties, the Treasury Regulations un-
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der IRC § 7216 define “tax return preparer” more broadly and generally prohibit
a grantee, its employees, and volunteers from disclosing or using a taxpayer’s return information except when the tax return preparer has obtained prior written
consent from the taxpayer in a manner that complies with the procedures set
forth in the regulations and other guidance issued by the IRS. See generally 26
CFR § 301.7216-2. The regulations authorize disclosure or use without consent
only in very limited situations. These situations include disclosures made pursuant to an order of a court or a federal or state agency, and uses for purposes of
preparation or audit of state or local tax returns. For unauthorized disclosure or
use, IRC § 7216 imposes a sanction of up to one year in prison or a $1,000 fine,
or both. In addition, IRC § 6713 imposes a civil penalty of $250 for each disclosure or use, up to $10,000 per calendar year.
b Training Materials
Client information must be removed from materials before being used for training. This includes deletion of names, addresses, taxpayer identification numbers, and any other information that could reasonably lead to identification of
the client.
c Media Requests
If a news reporter approaches clinic personnel to prepare a story about a taxpayer
served by the clinic, clinic personnel should, as a general rule, decline to participate
and refuse to provide details about any particular taxpayer’s case due to confidentiatlity requirements and disclose restrictions. Only those who have a “need to
know” to effect a resolution of the controversy should be allowed access to taxpayer information. A newspaper or other media reporter does not have a “need to
know” taxpayer information.
In those rare instances in which a client approaches clinic personnel and asks the
clinic to participate in a news article, the clinic must obtain a written waiver for the
disclosure of the client’s taxpayer information and be confident that the client fully
understands the possible ramifications that could occur from disclosing taxpayer
information.
In terms of a client discussing with the media the particulars of his or her case,
there is nothing in the LITC Program Guidelines that would prohibit such an
interview. However, this is an area in which clinics should proceed cautiously.
Although a publicized interview may be an effective way to advertise the clinic’s
services, this goal cannot outweigh the best interests of the client.
By suggesting a potential interview to a client, the client may misunderstand and
think the clinic is encouraging him or her to participate in the interview or that he
or she is under an obligation to participate as a way of recompensing the clinic
LOW INCOME TAXPAYER CLINIC
17
for the services provided. Clinic staff should communicate to the client explicitly
that he or she is under no obligation to be interviewed. Make sure the client fully
understands the possible ramifications that could occur from disclosing personal
information to a reporter. The client may be dealing with other nontax issues (e.g.,
custody or support battles, other creditors, immigration) that could be brought to
light as a result of the media coverage.
In summary, any time a clinic receives a request from the media for an article
about a client, clinic staff must act, first and foremost, in the best interests of the
client. If the client chooses to participate in the interview, suggest to the client
that he or she make it a condition of the interview that the story be produced
without photos and names. In order to share any details of a taxpayer’s case with
the media, the client must give voluntary, informed consent in writing.
BEST PRACTICE: A clinic should not seek permission from a client to publicize any details of
a case until after the controversy case has been resolved and the case is closed.
vii Volunteers
a Quality Assurance Process
Each LITC should create written position descriptions for volunteers and a
process to determine the qualification of applicants, such as licensing, training,
educational background, and other qualifications relevant to the services offered
by the clinic.
b Pro Bono Panel
To expand clinic coverage, LITCs may refer taxpayers with tax controversies to
a pro bono panel of qualified representatives who have agreed to provide free
representation or other assistance to taxpayers. Clinics may refer taxpayers only
to individuals authorized to practice before the IRS or the applicable court.
In addition to the required QTE on staff, controversy clinics are encouraged to
maintain a pro bono panel to which they may refer individuals with federal tax
controversies. A clinic can also refer taxpayers to another LITC; however, controversy funding will not be awarded to an organization that is solely making
referrals to another LITC.
ESL programs must maintain a pro bono panel or have an arrangement with an
LITC that provides representation services to which taxpayers with controversy
matters can be referred.
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Examples of pro bono panels to which taxpayers may be referred include:
`` A panel of qualified representatives maintained by the clinic to whom the
clinic refers matters and whose members agree to provide pro bono representation or advice to low income taxpayers;
`` A panel maintained by a state bar association that makes referrals, for free or
for a nominal fee, to qualified representatives who have agreed to provide pro
bono representation; and
`` A panel maintained by a state or local society of accountants that makes
referrals, for free or for a nominal fee, to qualified representatives who have
agreed to provide pro bono assistance to taxpayers.
c Referrals of Taxpayers to Volunteers
LITCs are expected to have adequate procedures and a monitoring system in
place to ensure that referrals are handled expeditiously and that the actual
representation is, in fact, pro bono. Pro bono representatives may not charge any
fees for services (other than reimbursement of expenses such as photocopying
and court filing fees).
An LITC may only refer cases to other pro bono organizations, including a panel
maintained by a state bar association or a state or local society of accountants.
Even if a taxpayer does not meet the LITC’s eligibility requirements, an LITC
cannot refer the taxpayer to a representative who charges a fee; instead, an LITC
should refer such a taxpayer to a state bar association; a state or local society
of accountants or enrolled agents; or another tax professional association that
provides pro bono referrals. If that pro bono organization ends up referring the
taxpayer to a representative who charges a fee, the LITC has still made an appropriate referral.
Generally, no person associated with the clinic should provide representation in
a case the clinic declined to accept. Additionally, no one employed by the clinic
or who serves as a volunteer should continue providing representation for a fee
in an accepted case or represent a clinic client in a subsequent, separate matter
on a fee-for-service basis. For example, an LITC holds an ESL educational activity where an accountant who is the QTE for the clinic serves as a speaker. An
ESL taxpayer who attended the educational activity later seeks to engage the
accountant on a fee-for-service basis. Although the ESL taxpayer did not approach the LITC for representation, the accountant must decline to represent the
ESL taxpayer unless the accountant is willing to represent the ESL taxpayer on a
pro bono basis.
LOW INCOME TAXPAYER CLINIC
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viii Preparing Tax Returns and ITIN Applications
Generally, if low income taxpayers require assistance with tax return preparation or an application for Individual Taxpayer Identification Number (ITIN), they
should be referred to a Volunteer Income Tax Assistance (VITA) program (including a co-located independently funded program) or a Tax Counseling for the
Elderly (TCE) site. Some IRS Taxpayer Assistance Centers will accept ITIN applications and verify taxpayer documents, but they will not prepare tax returns.
Grant funds awarded to an LITC must be used for the LITC activities authorized
in the grant agreement and cannot be used to fund VITA or TCE activities or
staff.
Preparation of tax returns (or any forms or schedules to accompany a return) or
claims for refund by an LITC must be directly related to a controversy with the
IRS or as an ancillary part of an LITC program to inform individuals for whom
English is a second language about their rights and responsibilities under the
Internal Revenue Code. An LITC or an individual associated with an LITC that
adheres to this policy is specifically excluded from the definition of a “Tax Return
Preparer” as set forth in Treas. Reg. §301.7701-15(f). For more detailed guidance,
controversy and ESL clinics should refer to section III.B.v, and section III.C.iii,
Preparing Tax Returns and ITIN Applications, respectively.
ix Recordkeeping and File Management
LITCs must maintain both adequate financial records and adequate client records.
a Grant Expenditure Records
LITCs must create written procedures explaining the process for approving expenditures from grant funds to ensure compliance with the applicable cost rules
and to safeguard assets. The procedures should address which individuals have
approval authority, when written approval is required, and what documentation
must be submitted for an expense to be approved by the approving official. The
approval process may differ based on size and type of expense.
LITCs must have written procedures to track the clinic’s fixed assets and tangible
personal property.
b Client Records
Clinic records should be sufficiently detailed to substantiate a claim for an attorneys’ fee award. In certain situations, attorneys’ fees (including fees for pro
bono services) may be awarded in a judgment or settlement of an administrative or judicial proceeding concerning the determination, collection, or refund of
tax, interest, or penalty. See IRC § 7430. Thus, a clinic doing controversy work
should keep detailed contemporaneous records so that if the situation arises, the
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LOW INCOME TAXPAYER CLINIC
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clinic has adequate records to support an award for attorneys’ fees. The records
must identify the date on which the services were performed and must describe
the nature of those services in detail. Records should include all time spent by
employees, volunteers, and students of the clinic. The records should describe
what work was performed by each individual, the position of the individual (e.g.,
paralegal, attorney, student), and the amount of time spent on each task. The
services provided by the clinic should be described in sufficient detail to enable
the IRS and the court to assess the reasonableness of the amount of time expended in relation to the service performed and to identify duplicated efforts by
multiple clinic personnel. The use of classifications to describe the services is
strongly encouraged. Suggested classifications include:
`` Initial client interview;
`` Research (issue described);
`` Pertinent facts gathering (describe subject matter and information sought);
`` Preparation of pleading or other court document;
`` Preparation of letter (identify recipient and subject matter);
`` Analysis of taxpayer or third-party records (identify records);
`` Consultation with tax return preparer (identify preparer);
`` Consultation with or interview of third-party (identify the person); and
`` Telephone conversations (identify the parties and the subject matter).
c Case Management Systems
A case management system can be used to capture intake information, calculate client financial eligibility, track case status and outcomes, input case notes,
maintain timekeeping records, record outreach and educational activities, and
generate data for Interim and Year-End reports. Clinics are strongly encouraged
to use professional case management software to maintain client files. A clinic
may use grant funds to acquire case management software to efficiently track
and report its program activities.
d Recommended Back-Up File System
A clinic should have an offsite back-up file system in place for information stored
on its computers. This is good business practice and enables resumption of
business in case of disaster or other work stoppage. LITC funds may be used to
purchase and develop a back-up file system.
LOW INCOME TAXPAYER CLINIC
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e Security
Client records must be kept in a secure location (e.g., a locking file cabinet or
password-protected electronic files). Before clinic employees or volunteers
leave the office each day, they must make sure that taxpayer information is
stored in a locked area. If it is necessary to take taxpayer information out of the
office, it must be safeguarded at all times.
f Records Retention
Federal award recipients must maintain financial records and supporting documents to substantiate compliance with grant requirements. Generally, such
records must be maintained for a period of three years from the date of submission of the Year-End Report. See 2 CFR § 200.333(b).
Retention policies for client records must comply with all applicable IRS and
state record retention requirements. State bars and other professional licensing
organizations may apply additional recordkeeping requirements for case files.
x Tax Compliance and Federal Debts
A clinic must be in full compliance with its federal tax responsibilities when
applying for an LITC grant and also throughout the grant year. To facilitate the
resolution of any potential tax compliance issues, we strongly encourage each
clinic that is part of a larger organization (e.g., a university) to submit with its application package a completed Tax Information Authorization Form (Form 13424-I)
so that the LITC Program Office may contact the Clinic Director directly without
violating IRC § 6103. For those clinics that are part of a larger organization, the
absence of a completed form may require additional time to resolve any potential tax compliance issues and could result in a delay in the receipt of grant
funds.
Funds will not be awarded to an organization that has any uncontested outstanding federal tax debt. An outstanding federal tax debt is any unpaid federal
tax liability that has been assessed, and for which all judicial and administrative
remedies have been exhausted or have lapsed. An applicant that has entered
into and remains current with respect to an installment agreement or other
payment arrangement with the federal government to satisfy any outstanding
federal tax debt will be considered in compliance and will not serve to make an
applicant ineligible for funding.
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Standard Form 424 (in Appendix A) asks whether the applicant is delinquent on
any federal debt. In general, funds will not be awarded to an applicant with any
outstanding federal nontax debt.
xi Name or Organizational Status Changes
Requests to approve name or organizational status changes must be submitted in writing to the LITC Program Office in advance of the effective dates of
proposed changes with sufficient time to afford program evaluation and legal
review.
xii Client Satisfaction
Clinics should solicit client comments regarding services provided and use such
observations to improve clinic services. Clinics should create a method of soliciting these assessments that is appropriate, depending on the services provided
to the client. Clients should be advised that their participation in surveys is
voluntary.
B Standards of Operation for Controversy Clinics
i Controversy Representation
Controversy clinics represent low income taxpayers in tax controversies with the
IRS or state and local tax authorities when the clinic is representing the taxpayer in
a related federal matter. The representation may take place at any stage, including, but not limited to:
`` Account adjustments;
`` Exam;
`` Collection;
`` Appeals; or
`` Litigation.
LITCs may also represent taxpayers in trust fund recovery penalty cases, tax identity
theft matters, and requests for worker classification determination. A controversy
includes a dispute related to the tax provisions of the Affordable Care Act. A clinic
may also represent taxpayers in certain civil actions arising under the code, for example those arising under IRC §§ 7431 – 7435.
Representation services must be provided by an attorney, certified public accountant, enrolled agent or student currently authorized to practice before the IRS or
before the applicable court.
LOW INCOME TAXPAYER CLINIC
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ii Low Income Taxpayers and the 90/250 Requirement
At least 90 percent of taxpayers represented or referred must have incomes that
do not exceed 250 percent of the Federal Poverty Guidelines. Income is defined
below.
A clinic must use the LITC Program’s poverty guidelines to determine whether an
individual seeking representation is a low income taxpayer for purposes of LITC
Program funding. A clinic must determine whether a taxpayer satisfies the income
requirement based on current income information. The taxpayer must provide
this information on an intake form (or similar form) at the time the taxpayer seeks
the clinic’s assistance. Changes in financial status during representation do not
disqualify clients from continuing to receive clinic representation.
An LITC must obtain information from taxpayers who are prospective clients to
determine financial eligibility in a manner that promotes the development of trust
between qualified representative and client. If there is substantial reason to doubt
the accuracy of the financial eligibility information provided by a client, the LITC
must make appropriate inquiry to verify the information, in a manner consistent
with the attorney-client relationship.
The 90/250 income requirement applies only to taxpayers represented in controversy cases and does not apply to consultations or other LITC activities. Representation of a taxpayer in a controversy means to act as an agent of the taxpayer
in an advocacy capacity in a matter before the IRS, the United States Tax Court,
another federal court, or before a state or local tax authority when the clinic is
representing the taxpayer in a related federal controversy.
A clinic must maintain records of the total number of taxpayers represented or
referred in controversies with the IRS and the number of taxpayers represented
in controversies with the IRS who have incomes that do not exceed 250 percent
of the Federal Poverty Guidelines. To determine the total number of taxpayers
represented in controversies with the IRS, include both those who do and do not
meet the income requirements. The requirement is applied against family units
assisted, meaning representation of two taxpayers with respect to a joint liability
— i.e., arising from a married-filing-jointly return—counts as one taxpayer assisted. If only one spouse on a joint return is represented or referred, the represented
spouse counts as one taxpayer assisted.
Satisfaction of the 90/250 income requirement is determined based on the
income of family units, not on the average income of the taxpayers represented.
For example, suppose a clinic has the following clients: 97 unrelated individuals
(i.e., 97 family units) and one family unit of three related taxpayers. For purposes
of determining whether the 90/250 income requirement is satisfied, at least 90
percent of the 98 family units must have incomes that do not exceed 250 percent
of the Federal Poverty Guidelines.
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Example 1: Satisfying the 90/250 Requirement. The LITC receives controversy funding, and opened 120 new representation cases and conducted 92 consultations
during the grant year, thereby assisting 212 taxpayers. The 90/250 requirement
applies only to taxpayers represented. Thus, at least 108 of the 120 taxpayers (90
percent) represented must have incomes which do not exceed 250 percent of the
poverty level, as determined in accordance with official guidance published by the
federal government, to comply with the 90/250 requirement. The 92 taxpayers
who received consultation services are excluded when analyzing whether LITC has
satisfied the 90/250 requirement.
a Poverty Guidelines
The LITC Program Office updates the income guidelines for the LITC Program
annually after HHS publishes the Federal Poverty Guidelines each year. Clinics must adopt the new income guidelines for determining LITC low income
representation eligibility within 30 days from the date of publication of the
HHS Federal Poverty Guidelines in the Federal Register (generally in late January).
Based on the Federal Poverty Guidelines published at 79 F.R. 3593-94 on
January 22, 2014, the current LITC income ceilings for controversy representation are as follows:
LITC Income Guidelines
(250% of Federal Poverty Guidelines)
48 Contiguous
Size of Family Unit
States,
Alaska
D.C., and Puerto Rico
1
$29,175
$36,450
Hawaii
$33,550
2
39,325
49,150
45,225
3
49,475
61,850
56,900
4
59,625
74,550
68,575
5
69,775
87,250
80,250
6
79,925
99,950
91,925
7
90,075
112,650
103,600
8
100,225
125,350
115,275
10,150
12,700
11,675
For each additional
person, add
LOW INCOME TAXPAYER CLINIC
25
b Definition of Income for Purposes of the 90/250 Requirement
“Income” is defined in accordance with the definition used by the U.S. Bureau of
the Census. See http://www.census.gov/cps/about/cpsdef.html for the complete
list of items included in the definition of income.
Income includes total annual cash receipts before taxes, subject to the
exceptions provided below. For example, income includes:
`` gross salaries before payroll deductions;
`` net earnings from self-employment (gross receipts less business expenses);
`` alimony;
`` child support;
`` federally funded and other public assistance;
`` social security;
`` pensions and retirement income;
`` unemployment benefits;
`` workers compensation;
`` rents;
`` royalties;
`` scholarships;
`` dividends;
`` interest;
`` net gambling winnings; and
`` survivor benefits or annuity payments.
Income does not include:
`` proceeds received from the sale of property (including stocks, bonds, a house,
a car);
`` withdrawals from a bank account;
`` tax refunds;
`` gifts;
`` loans;
`` lump sum inheritances;
`` insurance payments; or
`` noncash benefits (e.g., employer-paid or union-paid portion(s) of employee
fringe benefits).
26
LOW INCOME TAXPAYER CLINIC
OPERATING A CLINIC
NOTE: The definition of income for purposes of the 90/250 test is not the same as the
definition of gross income under IRC § 61, but rather is more closely aligned with the
definition of income used by the United States Census Bureau.
Grantees should generally determine program eligibility based on the client’s
current annual income. In the case of seasonal workers or taxpayers whose financial situation has recently changed, grantees may use a reasonable method
to estimate the client’s current income, and then annualize that amount.
Example 1: Determining a Taxpayer’s Annual Income. A taxpayer seeking representation was unemployed for a year but began working again three months
ago at a full time job. The clinic should count a taxpayer’s income for the immediately preceding three month period and multiply by four to determine if
the taxpayer meets the LITC income guidelines.
Example 2: Determining a Taxpayer’s Annual Income. A taxpayer seeking assistance works seasonally for eight months each year, and cares for family members during the remainder of the year. The taxpayer earns no other income.
The clinic should use the amount earned over the eight month period as the
taxpayer’s annual income to determine if the taxpayer meets the LITC income
guidelines.
c Definition of Family Unit
For purposes of this grant program, a family unit is generally defined as an unrelated
individual or a family. An unrelated individual is a person 15 years old or over not
living with persons related by birth, marriage, or adoption. A family is a group of two
or more persons related by birth, marriage, or adoption who live together. However,
if related individuals live together, but the person seeking assistance from the clinic
is financially independent, then that person may be treated as a family unit. If two
unrelated individuals live together, they constitute two family units.
Subject to the general rules outlined above, clinics have discretion on a case-by-case
basis to include an unrelated individual as part of a given family unit if that individual
could be claimed as a dependent for federal tax purposes in the current year by the
taxpayer or another member of the family unit. Income of any dependents included
in a family unit must be included in the computation of the taxpayer’s income for
purposes of determining eligibility. Example: A husband and wife seeking LITC
controversy services care for two foster children who can be claimed as their dependents. The clinic may determine whether or not to treat the foster children as
part of the family unit or as a separate family unit. However, if the foster children are
treated as part of a single family unit with the husband and wife, any state support
payments received on behalf of the foster children must be included in the taxpayer’s
LOW INCOME TAXPAYER CLINIC
27
income for purposes of determining LITC income eligibility. If the foster children are
treated as a separate family unit, those support payments would be excluded from
the taxpayer’s income computation.
iii Amount in Controversy Limit
The amount in controversy for any taxable year generally should not exceed the
amount specified in IRC § 7463 (currently $50,000). The amount in controversy includes additions to tax, and penalties, but does not include interest unless the amount
of the interest is separately disputed. A clinic may represent a taxpayer in a case in
which the amount in controversy for a given taxable year exceeds $50,000. However,
the clinic must disclose the number of such cases and an explanation of why each case
was accepted for representation in its Interim and Year-End reports.
Example 1: Calculation of the Amount in Controversy – Notice of Deficiency. Taxpayer A
receives a Notice of Deficiency showing additional tax due of $49,000 and penalties
of $3,000. Taxpayer A disputes the entire penalty amount, but only $42,000 of the
tax set forth in the Notice of Deficiency. Thus, the amount in controversy is $45,000
($42,000 + $3,000).
Example 2: Calculation of the Amount in Controversy – Interest. Taxpayer B files a request
for interest abatement under section 6404 for $12,000 in interest that had accrued
but had not been paid. The interest is separately in dispute and is therefore included in
the amount in controversy. Thus, the amount in controversy is $12,000.
Example 3: Calculation of the Amount in Controversy – Notice of Determination. Taxpayer C receives a notice of determination concerning collection actions pursuant to
section 6330. The notice of determination reflects a $40,000 liability for tax year
1, a $30,000 liability for tax year 2, and a $20,000 liability for tax year 3. Although
Taxpayer C is disputing the entire $90,000 liability ($40,000 + $30,000 + $20,000),
each tax year must be reviewed separately to determine the relevant amount in controversy. Thus, for tax year 1, the amount in controversy is $40,000; for tax year 2,
the amount in controversy is $30,000; and for tax year 3, the amount in controversy is
$20,000.
Example 4. Calculation of the Amount in Controversy – Balance Due. Taxpayer D receives
a bill from the IRS for $55,000 for a single tax year. The bill is composed of $40,000
tax, $6,000 penalties, and $9,000 interest. Taxpayer D wants to submit an offer in
compromise in the amount of $4,000, which represents D’s reasonable collection
potential. The amount for which Taxpayer D is seeking assistance is $55,000. Thus,
the amount in controversy is $55,000.
iv Student Representation
Clinics intending to use students to represent taxpayers before the IRS must obtain authorization for a special appearance for those students. The LITC Program
Office handles requests for special appearance authorizations. Information about
28
LOW INCOME TAXPAYER CLINIC
OPERATING A CLINIC
how to request an authorization for a special appearance is available on the LITC
Toolkit. The special appearance authorization is limited to practice before the
IRS. With respect to practice before any court, the court itself handles requests to
authorize student representation.
The appointment of a student as a taxpayer’s representative under a special appearance authorization lasts for 130 days from the time the taxpayer signs Form
2848, Power of Attorney and Declaration of Representative, after which it automatically expires as to the student, but not as to the supervising attorney or certified
public accountant (usually the Clinic Director) who must also sign the Form 2848.
Only the student’s authority to act as a representative is subject to the 130 day
limit; the power of attorney remains in force with regard to the supervisor until
withdrawn or revoked.
If a case remains open for longer than 130 days and representation of the taxpayer
by the LITC continues from one semester to the next, the LITC should let the
student’s appointment as representative naturally expire unless the representation must be ended for some reason other than the passing of 130 days. Sending a
withdrawal notice to the Centralized Authorization File (CAF) unit as to the student is not necessary and doing so runs the risk of the supervisor being removed
as appointed representative as well.
If a taxpayer checks the box on line 5 of Form 2848 delegating authority to the
representative to substitute or add representatives, and a new student representative is substituted, the LITC should send in a copy of the original 2848 showing
the taxpayer authorizing the delegation, along with a new Form 2848 showing the
substitution. This will not impact the validity of the supervisor’s authority to represent the taxpayer throughout the process. Up to two substitute representatives
may be listed on each Form 2848.
The form listing the substitute representative need not be signed by the taxpayer
and should be submitted to the CAF unit, along with a student practice authorization letter, issued by the LITC Program Office. However, if the taxpayer has not
checked the box on line 5 of Form 2848 delegating authority to the representative
to substitute or add representatives, the supervisor must have the taxpayer sign a
new Form 2848 and submit it the CAF unit each time a new student representative is added.
After the expiration of the 130 period, the supervisor should remain a validly appointed taxpayer representative pursuant to the still valid Form 2848 unless he or
she withdraws the representation by submitting a Form 2848 copy clearly indicating “withdrawal.”
LOW INCOME TAXPAYER CLINIC
29
If clinic students encounter difficulty with getting Forms 2848 processed or with
getting IRS personnel to recognize students operating under a special appearance authorization, please contact Susan Kideckel in the LITC Program Office at
212-298-2295.
BEST PRACTICE: American Bar Association Model Rule 1.7 provides that a lawyer should
not represent a client if the representation involves a concurrent conflict of interest.
Students authorized to practice before the IRS are treated as lawyers for purposes
of analyzing ethics issues. Thus, students participating in an LITC who plan to seek
employment with the IRS should be wary of a potential conflict of interest. A student
has an obligation to inform clients that he or she is seeking employment with the IRS.
Clients may consent to have the student continue the representation. If a client does not
consent to having the student continue the representation, the student must withdraw
the employment application, or the Clinic Director must assign a different student to the
case who does not have a conflict of interest.
v Preparing Tax Returns and ITIN Applications
A controversy clinic can provide assistance with a federal tax return, a claim for refund,
or an ITIN application if such assistance is necessary to resolve a dispute with the
IRS. The clinic may not charge a fee (even if it is a nominal fee) for the preparation of
a tax return. Also, the clinic is prohibited from including tax return or ITIN application
preparation among a list of services provided in any advertising materials. See section
III.A.iii.b, Publicity Materials for more information.
Example 1: Permissible Tax Return Preparation - Controversy. . LITC Q is representing Taxpayer E with an offer in compromise. Before the IRS can consider Taxpayer E’s offer, he
must be current with all tax filing requirements. LITC Q may prepare any of Taxpayer
E’s tax returns needed to process Taxpayer E’s offer in compromise request. If the offer
is accepted, Taxpayer E will have an obligation to timely file returns for the five-year
period beginning with the date of acceptance of the offer. LITC Q cannot prepare any
of Taxpayer E’s returns due in that five-year period after the offer is accepted, as those
returns are not necessary to resolve the current controversy. If, however, Taxpayer E
fails to file a return in that five-year period, LITC Q could prepare the delinquent return;
in order to be eligible for reinstatement, Taxpayer E must be current with all tax filing
requirements. The delinquent return is necessary for LITC Q to get the offer reinstated.
vi Participation in the United States Tax Court Clinical Program
Controversy clinics are strongly encouraged to participate in the United States Tax
Court Clinical Program. The Court recognizes that low income taxpayer clinics
provide important advice and assistance to many otherwise unrepresented taxpayers who have disputes with the IRS. The Court permits approved participating
clinics to submit a letter containing the clinic’s contact information which will be
30
LOW INCOME TAXPAYER CLINIC
OPERATING A CLINIC
included in Tax Court mailings. Procedures for participating in the United States
Tax Court Clinical Program can be found at www.ustaxcourt.gov/clinics.htm.
NOTE: All LITCs that provide controversy services are encouraged to participate in the Tax
Court clinical program. The LITC Program may require as a condition of the grant
that certain clinics apply to participate.
vii Education
Controversy clinics are encouraged to offer education to low income taxpayers
about their rights and responsibilities as federal taxpayers and also on issues of
particular significance to the intended audience. Clinics may address a wide range
of substantive tax issues in their educational programs and materials, including:
`` tax recordkeeping;
`` filing requirements and due dates;
`` eligibility for various deductions and credits;
`` tax provisions of the Affordable Care Act;
`` worker classification;
`` identity theft;
`` innocent spouse relief;
`` the audit and appeals process; or
`` collection alternatives.
LITCs are responsible for creating, printing, and distributing the educational program
materials used to inform individuals of their taxpayer rights and responsibilities.
Whenever possible, clinics are urged to use face-to-face contact (whether in consultations or in a group workshop), as it is an excellent method for educating taxpayers.
Controversy clinics are also encouraged to provide education to staff and fellow
practitioners on issues impacting low income taxpayers. Offering presentations
that award Continuing Professional Education (CPE) or Continuing Legal Education
(CLE) credits can be a valuable tool for recruiting clinic volunteers.
C Standards of Operation for ESL Clinics
i Identifying an Audience
ESL clinics must identify an audience to whom educational and outreach activities
will be directed. LITCs receiving funding for qualifying ESL activities must
advertise and promote themselves as providing education and information to help
ESL individuals understand the federal tax system. For example, an LITC could
LOW INCOME TAXPAYER CLINIC
31
advertise and conduct a community meeting to acquaint ESL individuals with their
rights and responsibilities under the federal tax system.
ii Education
ESL clinics must identify targeted linguistic populations and develop an education
strategy to reach that audience. Educational activities are designed to instruct
ESL taxpayers about their federal taxpayer rights and responsibilities. Clinics are
encouraged to address a wide range of substantive tax issues in their educational
programs and materials, including:
`` tax recordkeeping;
`` filing requirements and due dates;
`` eligibility for various deductions and credits;
`` tax provisions of the Affordable Care Act;
`` worker classification;
`` identity theft;
`` innocent spouse relief;
`` the audit and appeals process; or
`` collection alternatives.
LITCs are responsible for creating, printing, and distributing the educational
program materials used to inform individuals of their taxpayer rights and
responsibilities. Materials should be prepared in languages appropriate for the
target audience of ESL taxpayers.
Examples of educational programs include but are not limited to:
`` Making a presentation about federal taxpayer rights and responsibilities to an
ESL class at a local community college;
`` Presenting a workshop for ESL taxpayers on collection alternatives, identity
theft, worker classification, or tax provisions of the Affordable Care Act;
`` Conducting consultations to provide brief advice directly to an ESL taxpayer
about his or her specific tax matter;
`` Setting up a booth or staffing a table at a community event and handing out clinic
brochures and educational materials about various tax issues, and then answering questions and scheduling appointments for interested taxpayers; and
`` Holding a weekly discussion series at a community center during the filing season to educate ESL taxpayers about choosing a competent tax return preparer,
family and education credits, refund anticipation loans, Individual Taxpayer
Identification Numbers (ITINs), and other related issues.
32
LOW INCOME TAXPAYER CLINIC
OPERATING A CLINIC
Whenever possible, clinics are encouraged to use face-to-face contact
(whether in consultations or in a group workshop), as it is an excellent method
for educating taxpayers.
iii Preparing Tax Returns and ITIN Applications
An ESL clinic can provide assistance with a federal tax return, a claim for refund, or
an ITIN application only if such assistance is an ancillary part of the clinic’s program. The term “ancillary” means incidental. That is, the LITC’s program must focus on education and outreach and not tax return preparation. Clinics that engage
in ancillary tax return preparation or ITIN application preparation cannot charge
a separate fee (even if it is a nominal fee) for this service. Clinics are prohibited
from including tax return or ITIN application preparation among a list of services
provided in any advertising materials. See section III.A.iii.b, Publicity Materials for
more information.
Example 1: Permissible Tax Return Preparation - ESL. LITC S is conducting an educational event to inform taxpayers about required record keeping for tax filing purposes. At the conclusion of the event, one of the attendees, Taxpayer F, asks LITC
S to review her self-prepared tax return for accuracy. Taxpayer F brought all of
her supporting documents with her to the educational event. After reviewing the
return and all the supporting documents, LITC S determines that Taxpayer F made
a number of errors in calculating her tax liability. LITC S may correct the return
for Taxpayer F because the return preparation is ancillary to LITC S’s purpose of
informing Taxpayer F about required record keeping.
Example 2: Impermissible Tax Return Preparation - ESL. LITC T holds a monthly
workshop about the Earned Income Tax Credit (EITC). At the end of each workshop, LITC T personnel offer to prepare a tax return for attendees eligible to claim
the EITC. LITC T cannot prepare the returns under these circumstances, as preparing multiple returns is not incidental to the purpose of the workshop. LITC T’s
resources should be dedicated to education, not return preparation.
V
LOW INCOME TAXPAYER CLINIC
33
IV COMPLIANCE REQUIREMENTS
A UNIFORM ADMINISTRATIVE REQUIREMENTS
Grant award administrative requirements are set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR
Part 200.
The electronic CFR is updated regularly and is located at
http://ecfr.gpoaccess.gov. In addition, the new uniform guidance can be found at
https://federalregister.gov/a/2013-30465. All applicable OMB guidance is incorporated into these program requirements and into all LITC grant awards made by the
IRS to clinics.
NOTE: The Office of Management and Budget (OMB) released 2 CFR Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards on December 26, 2013. The new guidance supersedes and
streamlines OMB requirements affecting LITC grants: OMB Circulars A-21, A-110,
A-122, and A-133, among others. The new guidance, after promulgation of a
regulation by the Department of Treasury, will apply to 2015 LITC grants, except for
audit requirements, which will apply to audits of fiscal years beginning on or after
December 26, 2014.
B LOBBYING RESTRICTIONS
Lobbying activities: There are two types of lobbying activities – direct lobbying and
grassroots lobbying.
Direct lobbying includes contacting a member of Congress, a state or local legislator, or any of their staff members to influence the legislator to take a position or
action on a specific piece of legislation or potential legislation.
Grassroots lobbying includes activities that encourage third parties, members
of special interest groups or the general public to contact federal, state, or local
government officials in support of or in opposition to a legislative policy or appropriations matter. This applies to activities both before and after introduction of
the legislation.
General rule: No federal grant funds or matching grant funds may be used, either
directly or indirectly, to support the enactment, modification, or adoption of any
law, regulation, or policy at any level of government. Some exceptions to this
general rule may exist pursuant to an express authorization by Congress.
NOTE: Any entity receiving grant funds from another federal source, either directly or
indirectly, may be subject to additional restrictions on lobbying.
34
LOW INCOME TAXPAYER CLINIC
COMPLIANCE REQUIREMENTS
Grantees are prohibited from using federal grant funds and matching funds to:
a. Visit or send letters to members of Congress or state or local legislators, urging
them to favor or oppose specific legislation pending under their jurisdiction;
b. Develop materials designed to advocate for the enactment or repeal of any legislation or provide such materials to anyone;
c. Draft or assist in the drafting of legislation or provide comments on draft legislation;
d. Pay, directly or indirectly, for any efforts intended to or designed to influence a
member of Congress or a state legislature to favor or oppose any legislation or appropriation, whether before or after introduction; or
e. Engage in any legislative liaison activities, including attendance at legislative
sessions or committee hearings, gathering information regarding legislation, or
analyzing the effect of legislation, when such activities are carried out in support
of or in knowing preparation for an effort to engage in unallowable lobbying
NOTE: Employees are prohibited from engaging in any lobbying activities during the portion
of time that their salaries are paid from federal grant funds or matching funds.
Grantees are permitted to use federal grant funds and matching funds to:
a. Educate the public or constituents on legislative issues, so long as the education is
not part of a broader effort to directly or indirectly (grassroots lobbying) influence
legislators on a specific piece of legislation or legislative issue;
b. Expend non-federal funds (i.e., neither federal grant nor matching grant funds) on
lobbying activities. However, under the Byrd Amendment (31 USC § 1352), grantees may still be required to disclose lobbying activities conducted with non-federal
funds if the activities relate to lobbying regarding the making or awarding of a
grant and the organization receives more than $100,000 in federal grant funds;
c. Respond to documented requests from members of Congress, state legislatures or
other officials;
d. Interact with agency liaisons, such as the National Taxpayer Advocate or Local
Taxpayer Advocates, regarding program-related issues;
e. Respond to a personal or public invitation from the IRS for comments on proposed
tax regulations or guidance that impact low income and ESL taxpayers;
f. Partner with professional organizations in efforts to identify and propose solutions
for issues impacting low income and ESL taxpayers (however, such effort may not
attempt to influence the introduction, enactment, or modification or any federal or
state legislation);
LOW INCOME TAXPAYER CLINIC
35
g. Contact government officials regarding broad social, economic, or other issues, so
long as the contact is not part of an effort to influence Congress or the state legislature on an actual or potential specific piece of legislation; or
h. Discuss broad social, economic, or other issues on listservs or blogs, so long as the
contact is not part of an effort to influence Congress or the state legislature on an
actual or potential specific piece of legislation.
Sources of guidance on lobbying activities: The table below details the main sources
of authority that regulate lobbying by LITCs:
2 CFR Part 200
Byrd Amendment
- 31 USC § 1352
Publicity and
Propaganda/
Appropriations
Laws Restrictions
Federal Grant
Funds and
Matching Funds
Restriction applies to Federal Grant
Funds and Matching Grant Funds. Although the restriction does not apply to
non-federal grant funds, contacts with
members of Congress may need to be
disclosed.
Federal Grant
Funds and
Matching Funds
Lobbying
topics covered by
Restriction?
All subject
matters
Limited to lobbying regarding the making or awarding of a grant; it does not
appear to apply to lobbying on general
program legislation (i.e., to expand the
subject matter of the program, as opposed to the amount of money awarded
for program purposes which may
increase the award to the grantee).
All subject
matters
Stage of
legislation covered
by restriction
All stages,
including
before
introduction
All stages, including
before introduction.
Legislation
pending before
Congress
Applies to Grassroots Lobbying?
Yes, it is
prohibited
No, it is not prohibited, so long as no
federal funds are used for the grassroots
lobbying effort.
Yes, it is
prohibited
Applies to
advocating at the
state level?
Yes, prohibition
applies to state
level activities
No, prohibition does not apply to state
level activities.
No, prohibition
does not apply
to state level
activities
Exception for
when information
is specifically
requested by
member of
Congress?
Yes, there is
an exception
which permits
a response to
a documented
request
Yes, there is an exception which permits
a response to a documented request.
Not applicable
Source of
Restriction
Type of Funds
Affected by
Restriction
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LOW INCOME TAXPAYER CLINIC
NOTE: The preceding table describes restrictions on the use of federal grant funds and
matching grant funds for lobbying. In addition, IRC § 501(c)(3) organizations
are subject to lobbying limits (using different lobbying definitions) under the
Internal Revenue Code. In general, an IRC § 501(c)(3) organization may conduct
an insubstantial amount of lobbying and still maintain its tax-exempt status. For
additional information, see Publication 4221-PC, Compliance Guide for 501(c)(3)
Public Charities: http://www.irs.gov/pub/irs-pdf/p4221pc.pdf.
Examples of activities with possible lobbying implications:
A grantee sends an email to the American Bar Association sponsored LITC listserv
to gather support or opposition for legislation. Although such an email is an attempt
to influence legislation, so long as appropriated grant funds are not used, the grantee
has not violated Title 31 or Title 18. If the grantee has a requirement under Title 31 to
report lobbying activities, the email activity would need to be disclosed, including any
research or background work performed in connection with the email to the listserv.
For purposes of IRC § 501(c)(3), sending a single e-mail to the listserv would likely
constitute an “insubstantial” amount of lobbying. The grantee likely should not have
substantial expenditures or have expended substantial time in connection with the
sending of a single email. Keep in mind that if a grantee anticipates devoting, or having volunteers devote, a large amount of time to the endeavor (e.g., researching the
issue, drafting proposed legislation, responding to comments on the listserv about the
proposal), the activity could rise to the level of being more than insubstantial, in which
case the grantee may choose to make a lobbying election under IRC § 501(h). IRC §
501(h) measures the permitted/prohibited level of lobbying solely by expenses.
For more information about making a lobbying election, refer to:
`` IRC § 501(h) and IRC § 4911;
`` Treas. Reg. §§ 1.501(h)-1 through 1.501(h)-3;
`` Treas. Reg. §§ 56.4911-1 through 56.4911-10; and
`` Publication 557, Tax-Exempt Status for Your Organization.
NOTE: LITCs receiving Legal Services Corporation (LSC) funds should not confuse the above rules
on lobbying with LSC restrictions. There may be some lobbying activities that are acceptable
under LITC guidance that are prohibited under LSC requirements and vice versa.
NOTE: The LITC Program recognizes that this list of prohibited and permitted activities will not
answer every situation that arises. Accordingly, if a grantee has any question as to whether
an anticipated activity could be implicated under these rules, it should contact the LITC
Program Office prior to engaging in such activity.
LOW INCOME TAXPAYER CLINIC
37
C CIVIL RIGHTS COMPLIANCE
This section describes the data collection and reporting obligations required of LITC
grant applicants by the IRS to meet its responsibilities under these laws. This information is required pursuant to the civil rights statutes and the regulations of the Department of Justice and the Department of the Treasury.
Applicants must provide information necessary to comply with Title VI of the Civil
Rights Act of 1964 (Pub Law 88-352), as amended, which prohibits discrimination on
the basis of race, color, or national origin; Section 504 of the Rehabilitation Act of 1973
(Pub Law 93-112) as amended which prohibits discrimination on the basis of disability;
Title IX of the Education Amendments of 1972 (Pub Law 92-318), as amended, which
prohibits discrimination on the basis of sex in education programs or activities; and
the Age Discrimination Act of 1975 (Pub Law 94-135), as amended, which prohibits
discrimination on the basis of age; and Executive Order 13166, Improving Access to
Services for Persons with Limited English Proficiency, which sets forth the compliance
standards that recipients of Federal financial assistance must follow to ensure that their
programs and activities normally provided in English are accessible to those with limited English proficiency, including through oral and written translation when necessary.
Reprisal - No recipient or other person shall intimidate, threaten, coerce, or discriminate against any individual for the purpose of interfering with any right or privilege or
because the individual has made a complaint, testified, assisted, or participated in any
manner in an investigation, proceeding, or hearing.
Civil rights reporting, completed on Form 13424-M, is mandatory and required of every
applicant or current grantee submitting a request for continued funding annually.
i Civil Rights Reviews
The Civil Rights Division (CRD) of the IRS may request additional data only to the
extent that it is readily available or can be compiled with reasonable effort, and is
found to be necessary to make a civil rights compliance determination. Examples of
data and information which to the extent necessary and appropriate for determining compliance with applicable civil rights statutes and implementing regulations
may be requested include, but are not limited to:
`` The manner in which services are or will be provided by the program and related
data necessary for determining whether any persons are or will be denied such
services on the basis of prohibited discrimination;
`` The population eligible to be served by race, color, national origin, age, sex, or
disability;
`` Data regarding covered employment, including use or planned use of bilingual public
contact employees serving beneficiaries of the program where necessary to permit
effective participation by beneficiaries unable to speak or understand English;
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LOW INCOME TAXPAYER CLINIC
`` The location of existing or proposed facilities connected with the program and
related information adequate for determining whether the location has or will
have the effect of unnecessarily denying access to any persons on the basis of
prohibited discrimination;
`` The present or proposed membership, by race, color, national origin, sex, age,
or disability, in any planning or advisory body which is an integral part of the
program; and
`` Data, such as demographic maps of the racial composition of affected neighborhoods or census data.
Each multi-year grantee shall update the civil rights narrative in its NCC request.
Each grant application and NCC shall be reviewed for its civil rights reporting
requirements by the Civil Rights Division staff member. Upon completion, the Civil
Rights Division will forward a preliminary civil rights determination based on the
information in the grant application or NCC to the LITC Program Office. No LITC
grant funding shall be awarded until the Civil Rights Division has made a preliminary determination of probable or conditional compliance. Department of Justice
regulations state that all federal agency staff determinations of Title VI compliance
shall be made by or be subject to review by the agency’s civil rights office.
The CRD annually conducts selected post-award reviews to ensure civil rights
requirements are in place and to provide technical assistance.
The following are examples of civil rights compliance items addressed during site
reviews:
`` External building accessibility (e.g., accessible entrances, curb cuts, sufficient
parking spaces for persons with disabilities)
`` Interior accessibility (e.g., signage for emergency routes, routes to and within
the service area, sufficient seating in the service area, restrooms, water fountains and elevators)
`` Non-discrimination policies (e.g., Pub 4053 displayed in service areas, the organization’s non-discrimination policy posted and disseminated in marketing)
`` Accommodations for persons with disabilities (e.g., sign language interpreters,
Braille/large print documents)
`` Accommodations for persons with limited English proficiency (e.g., bilingual
volunteers, language interpreters/language line, community resources)
The results from the selected site reviews are compiled into a report and provided
to the Office of the Taxpayer Advocate.
NOTE: Each Low Income Taxpayer Clinic is required to display the Civil Rights Poster,
Publication 4053.
LOW INCOME TAXPAYER CLINIC
39
ii Civil Rights Division Contact Information
For additional information on civil rights requirements, see Publication 4454, Your
Civil Rights are Protected, or contact the Operations Director, Civil Rights Division:
Operations Director, Civil Rights Division
Internal Revenue Service, Room 2413
1111 Constitution Avenue NW
Washington, DC 20224
D OTHER ASSURANCES AND CERTIFICATIONS
i Trafficking Victims Protection Act of 2000
The Trafficking Victims Protection Act of 2000, (22 U.S.C. § 7104) as amended,
requires any agency that awards grants to include a condition authorizing the
agency to terminate the grant if the grantee engages in certain activities related to
trafficking in persons. As part of the implementation of the Act, the Office of Federal Financial Management has established terms that must be included in every
grant agreement. See 2 C.F.R. § 175.15.
The IRS may terminate the award, without penalty, if the grantee or any subgrantee engages in, or uses labor recruiters, brokers, or other agents who engage in:
a. Severe forms of trafficking in persons;
b. The procurement of a commercial sex act during the period of time that the
award is in effect;
c. The use of forced labor in the performance of the award; or
d. Acts that directly support or advance trafficking in persons, including the following acts:
i. Destroying, concealing, removing, confiscating, or otherwise denying an
employee access to that employee’s identity or immigration documents.
ii. Failing to provide return transportation or pay for return transportation costs
to an employee from a country outside the United States to the country from
which the employee was recruited upon the end of employment if requested
by the employee, unless:
• exempted from the requirement to provide or pay for such return transportation by the Federal department or agency providing or entering into the
grant, contract, or cooperative agreement; or
• the employee is a victim of human trafficking seeking victim services or
legal redress in the country of employment or a witness in a human trafficking enforcement action.
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LOW INCOME TAXPAYER CLINIC
iii. Soliciting a person for the purpose of employment, or offering employment,
by means of materially false or fraudulent pretenses, representations, or
promises regarding that employment.
iv. Charging recruited employees unreasonable placement or recruitment fees,
such as fees equal to or greater than the employee’s monthly salary, or recruitment fees that violate the laws of the country from which an employee
is recruited.
The IRS may terminate the award if the grantee has an employee who is determined by the IRS official authorized to terminate the award to have violated a
prohibition in items a, b, c, or d above through conduct that is either:
• Associated with performance under the award; or
• Imputed to the grantee using the standards and due process for imputing the
conduct of an individual to an organization that are provided in 2 CFR Part 180,
OMB Guidelines to Agencies on Governmentwide Debarment and Suspension
(Non-Procurement), as implemented by the Department of the Treasury at 31
CFR Part 19.
ii Federal Funding Accountability and Transparency Act (FFATA) (2 CFR Part 170)
The Federal Funding Accountability and Transparency Act (FFATA) of 2006, as
amended, is intended to empower Americans with the ability to hold the government accountable for each spending decision. Each applicant must ensure it has
the necessary processes and systems in place to comply with the FFATA reporting
requirements should it receive funding. OMB has issued guidance to establish
requirements for grantees to report information about executive compensation in
certain circumstances. See 2 CFR Part 170.
iii Corporate Felony Convictions
For fiscal year 2014, federal law prohibits the award of grant funds to any corporation that was convicted or had an officer or agent of such corporation acting on
behalf of the corporation convicted of a felony criminal violation under any Federal
law within the preceding 24 months, where the IRS is aware of the conviction, unless the IRS has considered suspension or disbarment of the corporation, officer, or
agent and made a determination that denial of the grant is not necessary to protect the interests of the government. Contact the Program Office for up-to-date
information about this prohibition for fiscal year 2015.
LOW INCOME TAXPAYER CLINIC
41
iv System for Award Management, Employer Identification Number,
and Universal Identifier Requirements
Applicants are required to register with the System for Award Management
(SAM) prior to submitting a grant application and are required to maintain an
active SAM registration with current information at all times during which they
have an active federal award or an application under consideration. SAM is a
web-enabled government-wide application that collects, validates, stores, and disseminates business information about the federal government’s trading partners
in support of the contract award, grants, and electronic payment processes. To
remain registered in the SAM database after the initial registration, the applicant
is required to review and update on an annual basis from the date of the initial
registration or subsequent updates its information in the SAM database to ensure
it is current, accurate, and complete.
Registration in the SAM database typically takes from three to five business days
but may take up to two weeks. If the applicant already has an Employer Identification Number (EIN), the applicant’s SAM registration will take three to five business
days to process.
If the applicant does not have an EIN, then the applicant should allow two weeks
for obtaining the information from IRS when requesting an EIN via phone, fax,
mail, or online. Please take this time into account when preparing LITC grant applications.
Applicants are also required to provide a Data Universal Numbering System
(DUNS) number with each application. For more information, see 2 CFR Part 25.
DUNS is a unique nine-digit identification number provided by Dun & Bradstreet,
Inc. The federal government requires that all applicants for federal grants and
cooperative agreements with the exception of individuals other than sole proprietors have a DUNS number. The federal government will use the DUNS number to
better identify related organizations that are receiving funding under grants and
cooperative agreements, and to provide consistent name and address data for
electronic grant application systems. A DUNS number may be obtained by calling
(866) 705-5711 (for applicants in Alaska and Puerto Rico, (800) 234-3867) or applying online at http://fedgov.dnb.com/webform.
v Other Applicable Laws and Regulations
Programs involving use of federal funds are governed by a wide variety of federal
laws and regulations. These include:
`` Restrictions on political activities at 18 U.S.C. §§ 595, 598, 600-603;
`` The preservation requirements in the National Historic Preservation Act (16
U.S.C. § 470 et seq.) and the Archeological and Historic Preservation Act of
l966 (16 U.S.C. § 469a-1 et seq.);
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LOW INCOME TAXPAYER CLINIC
`` Whistleblower protections at 41 U.S.C. 4712, 4304, and 4310;
`` Environmental requirements of the Clean Air Act (42 U.S.C. § 7401 et seq.); and
`` The non-pollution requirement of the Federal Water Pollution Control Provisions (33 U.S.C. § 1251 et seq.).
Assurances of compliance are required for LITC funding, according to the “common rule” on non-procurement, debarment, and suspension adopted by Department of Treasury at 31 CFR Part 19, Subpart C. An applicant must certify that its
organization and Clinic Director are not presently debarred or suspended from
covered transactions by any federal agency. In addition, an applicant must indicate that within the three-year period before applying for a grant, its organization
and Clinic Director have not been convicted of or had a civil judgment rendered
against them for fraud, theft or certain other offenses, and have not had one or
more public transactions terminated for cause or default. An applicant must also
indicate that its organization and Clinic Director are not presently criminally or
civilly charged with certain offenses.
Additional assurances are required according to the government-wide requirements for a drug-free workplace (41 U.S.C. §§ 8101-06), adopted by the Department of the Treasury at 31 CFR, Part 20, Subpart B and C, and assurance of civil
rights compliance, as specified above. Applicants must also comply with all
additional applicable requirements in OMB Circulars, Department of the Treasury
Circulars and Federal Management Circulars.
When an applicant submits Standard Form 424 and checks the box on line 21
marked “I agree,” the applicant is agreeing to each of the assurance and certification provisions that accompany Standard Form 424. A list of assurances and
certifications is included in Appendix A.
E COST PRINCIPLES
Grant funds must be used for expenses in accordance with the cost principles guidance in 2 CFR Part 200. Generally, for an expense to be allowable, the expense must
be:
`` Reasonable;
`` Incurred to benefit the program; and
`` Consistent with market prices.
LOW INCOME TAXPAYER CLINIC
43
Grantees should refer to 2 CFR Part 200 for detailed rules regarding allowable and
unallowable expenses or contact the clinic’s assigned analyst with questions regarding
expenses. Below is a table that lists examples of some common expenses:
Allowable Expenses
Unallowable Expenses
Salaries, wages, and personnel benefits
Purchase, construction, repair, or
rehabilitation of any building or any portion
thereof
Reasonable office supplies and equipment
costs
Expenses incurred that do not support
or benefit the program or which are
unnecessary in carrying out the program
Rent, utilities, and custodial services
Certain advertising and public relations
costs as described in the OMB Circulars
Non-alcoholic refreshments for community
outreach events or one-on-one consultations
Alcoholic beverages
Printing, postage, insurance
Lobbyist registration fees
Audit services
Costs of goods or services for personal use
(as opposed to business use) of the clinic
staff
Publicity and training costs directly
associated with the program
Costs incurred outside the performance
period of the award, unless specifically
excepted by the Program Office*
Installation of telephone lines, including
a toll-free line, necessary to provide clinic
services to taxpayers
Application fee to become an Attorney,
CPA, or enrolled agent
Travel performed by program staff to
conduct clinic business
Professional dues for attorneys and CPAs
Costs incurred for two individuals to attend
the annual LITC Conference
Enrolled agents’ license renewal fee
Interpreter services for hearing-impaired or
non-English speaking taxpayers
Entertainment costs
Legal research and reference materials
including the IRC and Treasury Regulations
Fines and penalties
Indirect costs as a use of federal funds
Indirect costs as a use of matching funds
*NOTE: The LITC Program Office permits returning clinics to use grant funds awarded for
the current grant year to attend the following year’s grantee conference (e.g., a clinic
may use funds awarded for the 2014 grant year to attend the 2015 annual LITC
conference, which will be held in December 2014).
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LOW INCOME TAXPAYER CLINIC
Tips on Determining Allowable versus Unallowable Expenses
Refreshments
`` A clinic may use grant funds for providing refreshments to volunteers so long as
the costs are reasonable. However, a clinic generally may not use grant funds
to buy refreshments for its employees, unless their workload requires those
employees to work outside the normal hours of clinic operation.
Continuing Professional Education
`` While maintaining professional credentials is generally a personal expense
and therefore unallowable, a clinic may nonetheless use grant funds to pay
for continuing education courses if such courses will increase the vocational
effectiveness of employees. See 2 CFR § 220, J.51 and 2 CFR § 230, Appendix B.49.
Pens, Mugs, and Other Promotional Items
`` A grantee cannot spend grant funds on pens, t-shirts, mugs, or other memorabilia
to promote its services to taxpayers or for the personal use of employees. Grantees
can purchase pens and other office supplies for the business use of clinic staff.
`` Grantees may use federal funds to acquire pens, mugs, and other small items of
memorabilia for pro bono representatives working with the clinic, provided the cost
is reasonable and consistent with market prices.
Tips for Treatment of Indirect Expenses
`` While indirect expenses are an allowable expenditure of grant funds, IRC
§ 7526(c)(5) prohibits clinics from counting donated indirect costs as
matching funds.
`` A grantee must include a copy of its indirect cost rate agreement with its
budget. See Section V.A., Completion and Submission of the LITC Program
Grant Application Package, and V.B., Completion and Submission of a NonCompetitive Continuation (NCC).
`` Unallowable expenses may not be included in the indirect cost rate.
`` Inquiries about obtaining an indirect cost agreement should be directed to
the LITC Program Office.
LOW INCOME TAXPAYER CLINIC
45
F Matching Funds Requirement
All grantees must provide matching funds on a dollar-for-dollar basis for all LITC
Program funds received under this grant. In general, 2 CFR Part 200, provides that
all contributions, including cash and third-party in-kind, can be accepted as matching
funds when such contributions are:
`` Verifiable from the grantee’s records;
`` Not used as a match for any other federally-assisted project or program;
`` Necessary and reasonable for proper and efficient accomplishment of the program;
`` Allowable under the applicable cost principles;
`` Not paid by the federal government under another award, except when authorized by federal statute;
`` Provided for in the grantee’s approved budget; and
`` In conformity with other provisions of 2 CFR Part 200.
If an LITC receives grant funding to provide both controversy and ESL services, the
LITC must have separate funds to support a dollar-for-dollar match for each program.
i Valuation of Matching Funds
Contributions of goods and services provided by a grantee must be valued in
accordance with applicable cost principles. These principles generally limit
values to the amount a prudent person would pay for the goods or services in
an arm’s length transaction under the circumstances prevailing at the time the
cost was incurred or fair market value. Third-party in-kind contributions,
which represent the value of non-cash contributions provided by parties other
than the recipient or federal government, must be valued in accordance with
the principles stated in 2 CFR §200.306. Third-party in-kind contributions
include the value of goods, space, or volunteer services donated to the LITC by
third parties.
NOTE: If an individual on the clinic staff receives an award or fellowship from a nonfederal source
(e.g., the American Bar Association Section of Taxation Public Service Fellowship), the
amount of the award may be included as matching funds to the extent the award proceeds
are used to support clinic activities.
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LOW INCOME TAXPAYER CLINIC
ii Volunteer Services Generally
The rates for volunteer in-kind services, other than certain volunteer services
provided by a qualified representative as explained in IV.F.iii., Volunteer Services
of a Qualified Representative, shall be determined consistent with the principles
stated in 2 CFR § 200.306. In general, the rates used to value volunteer in-kind
services must be consistent with those paid for similar work in the applicant’s
organization and may include a reasonable amount for fringe benefits.
When the applicant does not have staff performing similar work, the rates used
must be consistent with those paid for similar work in the labor market in which
the applicant competes for the kind of services involved. One source of wage
rates by geographic area can be found on the Bureau of Labor Statistics (BLS)
website (http://www.bls.gov/bls/blswage.htm). However, note that the BLS data
represent a wage rate only and can be adjusted upward by a reasonable fringe
benefits amount in determining a volunteer in-kind valuation rate.
If a third-party employer provides one of its employees to work for the applicant at no
cost, those services are valued at the employee’s regular rate of pay (plus benefits but
excluding overhead costs), provided the services are in the same skill set for which the
employee is normally paid.
An employee of the clinic may not be treated as a volunteer for purposes of
valuing in-kind services. For example, if an employee works at the clinic five days
a week, the grantee may not deem the services provided three days per week to be
paid services and the services provided two days a week to be volunteer services.
If an employee is paid for services, the total value of all services he or she provides
to the clinic is the amount paid.
iii Volunteer Services of a Qualified Representative
LITC grantees receiving controversy funding may use the rate found in IRC § 7430
to value certain donated services from qualified representatives. Section 7430
provides for an award of costs and fees in suits against the United States under
certain situations for services provided by qualified representatives. The rate at
which to value those services is adjusted periodically for inflation. Presently, the
applicable rate is $190 per hour, as prescribed in Revenue Procedure 2012-41,
2012-45 I.R.B. 539.
Prior to the promulgation of 2 CFR 200.306, OMB granted an exception, permitting LITC grantees to use the rate found in IRC § 7430 if the following conditions
are met:
`` The grantee is funded to provide controversy representation;
LOW INCOME TAXPAYER CLINIC
47
`` The services are provided by a qualified representative, which includes any
individual whether or not an attorney, who is authorized to represent taxpayers
before the IRS or an applicable court;
`` The qualified representative is not a student; and
`` The qualified representative is acting in a representative capacity and is
advocating for a taxpayer.
Unless all of the above criteria are met, grantees should apply the standard cost
principles from 2 CFR 200.306 as described above in section IV.F.ii, Volunteer
Services Generally.
Grantees should keep careful records of the services provided by volunteers.
Such record keeping is required for LITC reporting purposes, and is also necessary should a grantee pursue a claim for attorneys’ fees under IRC § 7430.
Grantees should also be mindful that a volunteer may meet the definition of a
qualified representative, yet may be providing services to the clinic in a nonrepresentative capacity. For example, if a volunteer is an attorney providing
advice to taxpayers at an outreach event, or during an intake consultation and
the interaction does not result in representation, then the work performed by the
volunteer must be valued using the standard OMB cost principles rather than
the IRC § 7430 rate. Even though the volunteer is an attorney and meets the
definition of qualified representative, the volunteer was not acting in a representative capacity.
NOTE: The LITC Program Office encourages clinics with questions about how to value
volunteer services to contact the Program Office for assistance.
iv Documentation of Matching Funds Sources
LITCs must maintain adequate records to substantiate the source of all matching
funds. For example, if the clinic is counting services provided by a volunteer as
matching funds, the clinic must track the amount of time the volunteer spends
working on LITC activities (e.g., a clinic can use sign-in sheets, timesheets, or a
similar method to track the time).
Grants may be awarded based on good faith estimates of matching funds,
including verifiable pledge commitments or other likely sources of funding.
However, clinics are advised to monitor the sources and uses of matching funds
throughout the grant year to ensure that sufficient matching funds are available
to meet the dollar for dollar match requirement in IRC § 7526(c)(5). Failure
to document the sources and amounts of all matching funds may result in the
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LOW INCOME TAXPAYER CLINIC
Program Office requiring the clinic to repay federal funds drawn down in excess
of the available match.
Qualified Matching Funds include (but are not limited to):
`` Cash contributions, including Legal Services Corporation funds;
`` Grantee contributions, including payments for:
• Salaries and fringe benefits paid to clinic staff;
• Equipment and supplies used in the clinic;
• Rent and utilities for clinic space; and
• Other costs necessary to the operation of the program.
`` Third-party in-kind contributions, including:
• The value of volunteer services furnished by professional and technical
personnel; consultants and other skilled and unskilled labor, as explained
above;
• The fair market value of donated equipment and supplies; and
• The fair rental value of donated space.
`` Program income, including nominal fees charged, from activities that are directly related to the clinic’s objectives.
Ineligible Matching Funds include (but are not limited to):
`` Expenses incurred for the purchase, construction, repair, or rehabilitation of any
building or any portion thereof;
`` Expenses incurred that do not support or benefit the program;
`` Services provided by students in exchange for academic credit;
`` Federal work-study funds;
`` Funds from other federal grants unless specifically authorized by statute
(See 2 CFR § 200.306(a); and
`` Indirect costs, including general overhead of the institution sponsoring the
clinic.
G OMB Audit Requirement
For grantee fiscal years beginning on or after December 26, 2014, 2 CFR Part
200, Subpart F describes the audit requirements applicable to grantees. If a
grantee expends less than $750,000 a year in total federal awards, no OMB
audit requirements are applicable. See 2 CFR § 200.501. Total federal awards
include all sources of federal funding, not just the funds received from the IRS
in support of the LITC. See 2 CFR § 200 501. The IRS, however, has the right to
LOW INCOME TAXPAYER CLINIC
49
audit expenditures of LITC funds regardless of the dollar amount of federal funding received by the grantee.
A grantee that expends $750,000 or more a year in federal awards must provide the IRS with a copy of the results of an audit performed in compliance with
2 CFR Part 200. Such grantees must arrange for an audit by an independent
auditor in accordance with the Government Auditing Standards developed by
the Comptroller General of the United States. A portion of the costs of an audit
performed in compliance with OMB Circular 2 CFR Part 200 is an allowable
LITC grant expense. The cost charged against the LITC grant should be allocable
based upon the amount of LITC funds received in proportion to the total federal
awards the organization receives.
An audit under 2 CFR Part 200 is organization-wide. The auditor must determine
whether:
`` The grantee’s financial statements present fairly its financial position and the
results of its operations in accordance with generally accepted accounting principles;
`` An internal control structure exists to provide reasonable assurance that
the grantee is managing federal awards in compliance with applicable laws
and regulations and to ensure compliance with the laws and regulations
that could have a material impact on the financial statements; and
`` The grantee has complied with laws and regulations that may have a direct
and material effect on its financial statement amounts and on each major
federal program.
Financial records, supporting documents, statistical records, and all other records
pertinent to an award shall be retained for a period of three years from the date of
submission of the Year-End report for the grant year, subject to certain exceptions
set forth in 2 CFR Part 200.333.
NOTE: For fiscal years beginning before December 26, 2014, an OMB audit is required if the
grantee expends at least $500,000 in Federal funds a year.
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LOW INCOME TAXPAYER CLINIC
Requesting Payment History Information for an OMB Audit
OMB audits often require historical grant payment information. This information is
not available from the LITC Program Office. Those seeking information pertaining
to payment or transaction history from the Payment Management System should
visit the HHS Division of Payment Management Services (PMS) website at
http://www.dpm.psc.gov/grant_recipient/audit_confirmation_procedures.aspx.
For recipients unable to access PMS inquiries online, payment history requests
may be faxed to 301-443-3586, Attention: Sheila Swedenburg. You may also
email requests to: [email protected].
LOW INCOME TAXPAYER CLINIC
51
V APPLICATION AND SELECTION PROCESSES
A COMPLETION AND SUBMISSION OF THE LITC PROGRAM GRANT
APPLICATION PACKAGE
An LITC grant application must be submitted by new applicants and current grantees
whose single year or multi-year grant period will end on December 31, 2014. To be
considered for 2015 LITC Program grant funding, all applications must be submitted
by June 20, 2014.
The application must be submitted electronically via www.grants.gov. Use of
grants.gov provides assurance that required entries are not left blank on the
standard forms and provides receipt acknowledgement when the application
is received by the LITC Program Office. The grants.gov website includes a narrated tutorial and Frequently Asked Questions to help you use the system. The
Funding Opportunity Number for the 2015 LITC grant application is TREASGRANTS-052015-001.
Currently funded grantees applying for funding for the second or third year of a
multi-year grant must submit a Non-Competitive Continuation Application. See section V.B, Completion and Submission of a Non-Competitive Continuation (NCC).
Tips for preparing the LITC Program Grant Application Package
NOTE: An application for grant year 2015 must be submitted by any current grantee whose
single-year or multi-year period will end on December 31, 2014.
NOTE: In general, a current grantee seeking funding for the second or third year of a multi-
year LITC grant should not submit an application via www.grants.gov, but rather
should submit an NCC via www.grantsolutions.gov. An exception to this rule applies
if the current grantee wishes to operate another program during the multi-year period
(e.g., in 2014 the clinic is providing only ESL services, but in 2015 the clinic wishes to
provide controversy and ESL services). In that case, the current grantee must submit a
complete application via www.grants.gov.
NOTE: Grant applications may be released in response to Freedom of Information Act (FOIA)
requests after appropriate redactions have been made. Do not include any individual
taxpayer information in the grant application.
NOTE: The new OMB guidance, 2 CFR Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards applies to grantees
with fiscal years beginning on or after December 26, 2014. The new guidance, after
promulgation of a regulation by the Department of Treasury, will apply to 2015
LITC grants, except for audit requirements, which will apply to audits of fiscal years
beginning on or after December 26, 2014.
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LOW INCOME TAXPAYER CLINIC
APPLICATION AND SELECTION PROCESSES
Copies of all required application forms and certifications, as well as instructions,
are included in Appendix A and B of this publication for your review. General information and application forms can be found in Appendix A and budget forms and
examples can be found in Appendix B. A complete application consists of the following items, submitted through www.grants.gov and prepared in accordance with the
relevant instructions.
a. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information Sheet
(see Appendix A);
b. Standard Form 424, Application for Federal Assistance, (see Appendix A);
c. IRS Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative (see
Appendix A) ;
d. Standard Form 424A, Budget Information – Non-Construction Programs, (see Appendix B);
e. IRS Form 13424-J, Detailed Budget Worksheet and Narrative, (see Appendix B);
f. Standard Form LLL, Disclosure of Lobbying Activities, (see Appendix A);
g. Attachments Form (used to attach items h-l);
h. IRS Form 13424-I, Tax Information Authorization Form, (see Appendix A) (inclusion of Form 13424-I is encouraged, but not required);*
i. Tax exemption determination letter, if applicable;*
j. Proof of academic accreditation, if applicable;*
k. Most recent audited financial statements (if the applicant expends more than
$750,000 per year, this must be an A-133 audit; an applicant that does not have
audited financial statements must submit unaudited statements for its most
recent fiscal year and a statement as to why audited financial statements are
not available) The new OMB guidance, after promulgatin of a regulation by the
Department of Treasury, will apply to 2015 LITC grants, except for audit requirements, which will apply on or after December 26, 2014;* and
l. Indirect cost rate agreement, if applicable.*
Items marked with an * must be submitted via the Attachments Form (downloadable
from www.grants.gov).
B Completion And Submission Of A Non-Competitive Continuation (NCC)
A Non-Competitive Continuation (NCC) must be submitted only by currently funded
grantees entering the second or third year of a multi-year grant. To be considered for
2015 LITC Program grant funding, all NCCs must be submitted by June 20, 2014.
LOW INCOME TAXPAYER CLINIC
53
All NCCs must be submitted through www.grantsolutions.gov. Use of
grantsolutions.gov provides assurance that required entries are not left blank on
the standard forms and provides receipt acknowledgement when the entry is received by the LITC Program Office. Do not submit NCCs via www.grants.gov. The
LITC Program Office will provide instruction on the use of the grantsolutions.gov
website. Additional questions regarding use may be directed to the Program Office at [email protected]. The Funding Opportunity Number for the 2015 LITC
grant is TREASGRANTS-052015-001.
Applicants seeking a single year grant or new multi-year grant request must submit
a Grant Application. See section V.A., Completion and Submission of the LITC Program
Grant Application Package.
NOTE: The new OMB guidance, 2 CFR Part 200, Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards applies to grantees
with fiscal years beginning on or after December 26, 2014. The new guidance, after
promulgation of a regulation by the Department of Treasury, will apply to 2015
LITC grants, except for audit requirements, which will apply to audits of fiscal years
beginning on or after December 26, 2014.
Copies of all required forms and certifications, as well as instructions, for the submission
of a request for continued funding are included in the appendices of this publication for
your review. A complete NCC consists of the following items, submitted through
www.grantsolutions.gov and prepared in accordance with the relevant instructions.
a. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information
Sheet (see Appendix A);
b. Standard Form 424, Application for Federal Assistance, (see Appendix A);
c. Standard Form 424A, Budget Information – Non-Construction Programs, (see
Appendix B);
d. IRS Form 13424-J, Detailed Budget Worksheet and Narrative, (see Appendix B);
e. Standard Form LLL, Disclosure of Lobbying Activities, (see Appendix A);
f. Project Abstract, (proposed program changes and Civil Rights Statement)
(seeAppendix A);
g. IRS Form 13424-I, Tax Information Authorization Form, (see Appendix A) (inclusion of Form 13424-I is encouraged, but not required);
h. Most recent audited financial statement (if the applicant is subject to the OMB
audit requirements explained in section IV.G above, this must be an A-133 audit;
an applicant that does not have audited financial statements must submit
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LOW INCOME TAXPAYER CLINIC
unaudited statements for its most recent fiscal year and a statement as to why
audited financial statements are not available); and
i. Indirect cost rate agreement, if applicable.
C EVALUATION AND SCREENING
The IRS may award grants with one-year to three-year project periods to qualified applicants. Organizations awarded a multi-year grant based on the 2015 selection and
award process will not undergo formal evaluation of their program plans during the
second or third year selection and award process. However, multi-year recipients will
be reviewed annually for satisfactory performance and progress in meeting goals and
objectives as well as compliance with grant terms. The funding level for subsequent
years will be reviewed annually and may be increased or decreased at the discretion
of the LITC Program Office. All funding will be based on the availability of annually
appropriated funds. Awarding of multi-year grants is at the discretion of the LITC
Program Office.
All applications will undergo a preliminary eligibility screening. Applications that do
not meet all eligibility screening criteria will be eliminated from the award process.
Applications that pass the eligibility screening will then be evaluated based on their
technical merit, the amount of funding requested, and other considerations.
i Eligibility Screening
Applications will be reviewed to determine the following information:
`` Length of Grant Requested (one year to three years);
`` Type of Program Proposed (Controversy, ESL, or both); and
`` Status of Organization (prior LITC grant recipient or new applicant).
Applications will be reviewed further to determine if all required items are included in
the application package and to ensure that the grantee has an active SAM registration.
ii Evaluation Process
Applications that pass the eligibility screening process will undergo a two-tiered
evaluation process. Applications will be subject to both a technical evaluation and
a Program Office evaluation.
a Technical Evaluation
During the technical evaluation, each application will be reviewed using the
criteria listed below and awarded points based on the information provided in
the application. If an applicant seeks funds to operate both a controversy and
ESL program, each program plan will be evaluated separately. Applicants can
receive a maximum of 100 points per program. In scoring applications, the IRS
LOW INCOME TAXPAYER CLINIC
55
will evaluate each program plan based on how it will assist in accomplishment of
the LITC Program goals as stated elsewhere in the application package.
NOTE: Only information contained in the application will be considered during the
technical evaluation process. Therefore, it is extremely important that a submission
contain all required information in order to achieve the maximum scoring.
Points will be assigned as follows:
Experience
`` Experience in operating a low income taxpayer clinic or delivering services to
low income and ESL taxpayers. (Maximum 10 points.)
Financial Responsibility
`` Quality of grant administration and internal accounting procedures.
(Maximum 10 points.)
Program Plan
`` Quality of programs offered to assist low income taxpayers or ESL taxpayers.
Evaluation criteria include the qualifications, training, and supervision of the
clinic staff, students, and volunteers; amount of time devoted to the program
by clinic staff; comprehensiveness of services to be provided; procedures for
ensuring the confidentiality of taxpayer information; procedures for monitoring and evaluating program results; publicity and outreach plans; and the
dates and days and hours of clinic operation. (Maximum 75 points.)
Program Coverage
`` Number of low income or ESL taxpayers in geographic area(s) and proposed
efforts to reach these taxpayers. (Maximum 5 points.)
b Program Office Evaluation
After the completion of the technical evaluation, applications will undergo a secondary review by the LITC Program Office. This evaluation will be based on the
information contained in the program plan, as well as the clinic’s performance
history in the LITC Program, if applicable.
`` New Applicants. The LITC Program Office will perform a general review of
the application and proposed program plan. The review will consider the
quality of the proposed program, the soundness of the proposed budget, and
any significant concerns identified during the technical evaluation.
`` Prior Grantees. The LITC Program Office will perform a general review of the
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LOW INCOME TAXPAYER CLINIC
application, proposed budget, and program plan, as well as a more detailed
review of the clinic’s performance history in the LITC Program. The review
will consider:
1. Timeliness, accuracy, and completeness of Interim and Year-End reports;
2. Any significant concerns identified by site assistance visits and how the
grantee addressed those concerns;
3. Whether the grantee’s activities match its program plan;
4. Grantee’s involvement with other tax clinics, community groups, the Taxpayer Advocate Service (TAS), and the LITC Program Office;
5. Whether the grantee has a history of not drawing down funds in a timely
manner; and
6. Whether the grantee has failed to use all funds awarded in prior years.
Before an award is made to any applicant, it will undergo a civil rights review by
the Civil Rights Division of the IRS. The LITC Program Office will also review the
organization’s federal tax compliance status and the suspension and debarment
status of the applicant. In order to be eligible for an LITC grant, an applicant
must:
`` Be in compliance with all federal tax obligations;
`` Be in compliance with all federal nontax obligations; and
`` Not be debarred or suspended (31 CFR Part 19), or otherwise excluded from or
ineligible for a federal grant award.
NOTE: For purposes of this grant program, entering into and remaining current with respect to
an installment agreement or other payment arrangement with the federal government
to satisfy any outstanding federal obligations constitutes being in compliance.
Grant funds may be withheld or denied based on an applicant’s failure to be in full
compliance with all civil rights requirements or federal obligations, or a determination that the applicant is currently suspended or debarred from receiving a federal
grant award.
The decision of whether or not to award grant funds will be based on the technical
evaluation, Program Office evaluation, and the following additional considerations:
`` To foster parity regarding clinic availability and accessibility for low income and
ESL taxpayers nationwide, the LITC Program Office will consider an applicant’s
geographic coverage area, the number of low income and ESL taxpayers served,
and the languages in which assistance will be provided to taxpayers.
`` If applications are submitted by more than one clinic sponsored by the same
institution or organization, the LITC Program Office will consider all factors sur-
LOW INCOME TAXPAYER CLINIC
57
rounding the operation of the clinics, including the geographic area(s) served by
the clinics and the comprehensiveness of the services to be provided, in determining whether and in what amount grants will be made to one or more such
clinics.
`` For academic clinics, which may serve fewer taxpayers than non-academic clinics because of the time involved in teaching and mentoring students, the LITC
Program Office will consider additional ways in which academic clinics can accomplish LITC Program goals (e.g., providing technical assistance, training, and
mentoring to other LITC programs, publishing articles about the LITC Program,
commenting on proposed Treasury regulations that affect low income or ESL
taxpayers, and monitoring graduates to determine whether they perform pro
bono work on behalf of or otherwise assist low income taxpayers).
`` The existence of other clinics serving the same population.
`` Appropriateness of funds sought for the quantity and quality of services to be
offered.
`` Other sources of funding available to the clinic.
Final funding decisions are made by the National Taxpayer Advocate, unless
recused. In recusal situations, final funding decisions are made by the Deputy
National Taxpayer Advocate.
D SELECTION OF GRANT RECIPIENTS
In making grant award decisions, the IRS seeks to fund qualified organizations, including academic institutions and nonprofit organizations throughout the United States, to
provide tax representation on behalf of low income individuals and education and
outreach to ESL taxpayers. The IRS may, at its discretion, award grant funds based on
controversy, ESL, or a combination of program plans to achieve the goals of the LITC
Program.
NOTE: Beginning in grant year 2016, the LITC Program will no longer issue grants to clinics
only offering outreach and education to the English as a Second Language (ESL)
community. All clinics will be expected to offer and report services provided to ESL
taxpayers. However, in order to receive a grant, a clinic must provide controversy
representation services to low income taxpayers.
An overriding goal of the LITC Program is to provide services to low income and ESL
taxpayers in every state, the District of Columbia and Puerto Rico. To that end, the IRS
encourages applications from clinics located in the underserved areas shown in the
chart below:
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LOW INCOME TAXPAYER CLINIC
Identified Underserved Areas
States and Territories
Alabama, Alaska, Georgia, Kansas, Mississippi, North Dakota,
South Dakota, and Puerto Rico
Metropolitan Areas
Los Angeles, California,
including these counties:
Los Angeles, Kern, Riverside, Ventura
Sacramento, California,
including these counties:
El Dorado, Placer, Sacramento,
San Joaquin, Stanislaus
Northern Virginia
including these counties:
Arlington, Fairfax, Loudon, Prince William
Notwithstanding the criteria detailed above, all applications for clinics from all areas
will receive serious consideration.
E NOTICE OF AWARD
The LITC Program Office will notify all applicants no later than November 2014 whether or not they have been selected to receive a 2015 grant award. However, no specific
award amount information will be available until after Congress appropriates funding
for fiscal year 2015.
The LITC Program Office will issue a notice of award to each applicant selected to
receive funding for the grant year. The notice of award states the amount of funding
awarded, the grant period, and incorporates by reference the requirements specified in
this publication. All funding will be based on the availability of annually appropriated
funds. If an applicant incurs expenses and a grant is not awarded, all costs incurred
will be the responsibility of the applicant.
F SUBMITTING A REVISED BUDGET
The LITC Program Office will determine final award amounts after Congress appropriates funding for fiscal year 2015. If the grant amount awarded is less than the amount
requested, a revised budget must be submitted through www.grantsolutions.gov. If the
change in funding affects the clinics proposed activities, a revised program performance plan must be submitted as well.
LOW INCOME TAXPAYER CLINIC
59
VI
POST-AWARD REQUIREMENTS
OF GRANTEES
A GENERAL COMPLIANCE
By accepting funds under this grant, the grantee agrees to comply with all terms and
conditions for the grant, which are governed by:
1. 26 U.S.C. § 7526;
2. The terms and conditions contained in this Publication;
3. Assurances and Certifications contained in Standard Form 424; and
4. Any requirements, prohibitions or restrictions imposed by the legislation appropriating federal funds for this award.
The grantee is responsible for oversight of the operations of the clinic’s activities. The
grantee must monitor each program supported by the grant to ensure that its activities under the award comply with applicable Federal requirements and performance
expectations are being achieved. Grantees are responsible for performing in accordance with the standards of operation, meeting all compliance requirements, proper
expenditure and accounting for Federal and matching funds, and complete, timely, and
accurate reporting of grant activities and finances.
If a grantee fails to comply with the terms of the award, the LITC Program Office may
impose additional conditions on the award. If the noncompliance cannot be remedied
by imposing additional conditions, the Program Office may take one or more of the
following actions:
a. Restrict the use of grant funds;
b. Disallow the use of grant funds or matching funds for all or part of all or part of the
cost of the activity or action not in compliance;
c. Suspend or terminate the award in whole or in part; as explained in section VII.C,
Suspension or Termination of a Grant;
d. Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180
and Federal awarding agency regulations;
e. Withhold further awards for the program; or
f. Take other remedies that may be legally available.
Before the IRS terminates an LITC grant award, the IRS will provide the grantee with
notice and a reasonable amount of time to correct the noncompliance.
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LOW INCOME TAXPAYER CLINIC
POST-AWARD REQUIREMENTS
B NOTIFICATION REQUIREMENTS
Events may occur during the grant period that have significant impact upon clinic operations. In such cases, the grantee must inform the LITC Program Office as soon as
the condition becomes known.
i Significant Changes in LITC Program Activities
Grantees must notify the LITC Program Office in the case of problems, delays, or
adverse conditions that materially impair the ability to meet the objectives of the
award. This notification shall include a statement of the action taken or contemplated, and any assistance needed to resolve the situation. Failure to notify the
LITC Program Office may result in restriction of funds or suspension or termination
of the grant.
ii Changes in LITC Contact Information
Clinics are required to immediately notify the LITC Program Office about proposed
changes in key personnel, including the Clinic Director, QTE, or QBA, as well as
any changes in their contact information (telephone number and email address);
the clinic address (both the physical address and the mailing address) telephone
number,or fax number; the days and hours of operation; and the beginning and
ending dates clinic services will be provided. These notifications ensure that the
Program Office has the most up-to-date information on each clinic.
Notification should be made by revising Form 13424, Low Income Taxpayer Clinic
(LITC) Application Information, through the amendment package on Grant Solutions. The clinic must email the Program Office and request that their amendment
package be returned to them. If the Program Office is unable to locate the clinic or
contact the clinic, it may be necessary to restrict the clinic’s funds or suspend or
terminate the grant.
iii Adjustments to Program Expenses
Clinics wishing to shift expenses among spending categories within a program (e.g.,
shifting funds from travel to supplies within a controversy program) are not required
to request approval unless the shift would substantially change the program plan.
The movement of funds between ESL and Controversy programs is considered to
be a major change and requires written approval from the LITC Program Office. A
request to shift funds between programs must be made before funds are moved
between programs. To request approval to move funds between programs, clinics
must submit an e-mail to [email protected] so that an application amendment package can be prepared. The email to the Program Office must contain the
following information:
LOW INCOME TAXPAYER CLINIC
61
`` The amount to be moved and from which program the funds are to be moved;
and
`` The reason for the request to move funds between programs.
NOTE: Any clinic currently receiving an LITC grant that does not expect to use all of its funds
must contact the LITC Program Office immediately so that the Program Office will
have sufficient time to reobligate the funds on or before September 30, the end of the
federal government’s fiscal year.
iv Non-Use of Grant Funds
The LITC Program Office will monitor clinics’ use of funds throughout the year to
ensure all grant funds will be expended. If a clinic determines that it will not spend
its entire grant, the clinic should immediately notify the LITC Program Office by
sending an e-mail to [email protected]. The notification should contain
the following information:
`` The amount of grant funds being returned;
`` The reason for the return of funds; and
`` The impact the return of funds will have on future operations (e.g., this is a onetime situation, or the grantee anticipates that its future funding needs will be
permanently reduced).
The LITC should notify the LITC Program Office immediately in writing as soon as
the LITC identifies unspent funds to ensure that the grant funds can be reobligated
to another clinic by the end of the federal government’s fiscal year (September
30). Notification should be made by sending an e-mail to the clinic’s assigned
analyst, and then following up with a letter. The letter should state the amount being released and the reason that the funds are not required.
v Withdrawal from LITC Program
A clinic must notify the LITC Program in writing before it withdraws from the Program or ceases to exist. All unused funds must be returned to the IRS within two
weeks of the date of withdrawal or the date of termination. The federal government is generally obligated to charge interest on any amount that is not repaid in a
timely fashion. See 31 C.F.R. § 901.9. Thus, for any funds the LITC Program Office
requests to be returned to the IRS, failure to repay those funds on time may result
in the clinic having to pay interest on those funds.
If a clinic withdraws from the LITC Program, a final financial report and program
narrative must be submitted within 90 days of final clinic activity or withdrawal
from the program, whichever is later. Clinics that withdraw from the program
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LOW INCOME TAXPAYER CLINIC
must comply with their ongoing professional responsibilities discussed in section
VII.C.iv, Post-Termination Responsibilities.
C MANAGING GRANT FUNDS
i Accessing Grant Funds
Grant funds are paid through the Payment Management System (PMS) maintained by the Department of Health and Human Services Division of Payment
Management (DPM). Grantees must obtain a username and password to use the
system. PMS allows a grantee to make an online request for payment of federal
funds. After a request is processed and approved, funds are directly deposited
into the grantee’s bank account through a process called Electronic Funds Transfer (EFT). Funds are generally available within one business day of the request.
Grantees may request funds to reimburse for allowable expenses already paid or
that will be paid within three business days of receipt.
EFT payments shall be timed in accordance with the actual, immediate cash
requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of EFT payments shall be as
close as is administratively feasible to the actual disbursements by the recipient
organization for direct program or project costs and the proportionate share of any
allowable indirect costs.
Information regarding the EFT procedure is available on the Division of Payment
Management segment of the HHS website at www.dpm.psc.gov. Questions regarding upcoming disbursements should be directed to the clinic’s assigned analyst.
For information about seeking historical payment information, see section IV G,
OMB Audit Requirement.
The DPM has an online tutorial for those who are not familiar with the system.
Grantees are encouraged to visit the DPM website (www.dpm.psc.gov) to view the
tutorial and training. Grantees that experience problems accessing funds should
contact the help desk at 1-877-614-5533 or send an e-mail to [email protected].
ii Maintaining Funds in an FDIC Insured Bank
Grantees must maintain advances of federal grant funds in interest-bearing
accounts at a bank with Federal Deposit Insurance Corporation (FDIC) insurance
coverage. The balance exceeding the FDIC coverage must be collaterally
secured unless:
LOW INCOME TAXPAYER CLINIC
63
`` The grantee receives less than $120,000 in federal awards per year;
`` The best reasonably available interest-bearing account would not be expected
to earn interest in excess of $500 per year on federal cash balances; or
`` The depository would require an average or minimum balance so high that an
interest-bearing account would not be feasible, given the grantee’s expected
federal and nonfederal cash resources.
iii Interest on Advances of Grant Funds
Grantees must annually remit to the federal government any interest in excess of
$500 per year earned on advances of federal grant funds. A grantee may keep up
to $500 of interest earned per year. Interest remittances should be made to the
Department of Health and Human Services, Payment Management System, Rockville, MD 20852, which acts as the government-wide agent for collection.
D Reporting Requirements
The LITC Program requires the timely submission of two reports for each grant year
– an Interim report and a Year-End report. The LITC Program Office uses the reports
to assess the grantee’s progress in meeting its goals and objectives and to measure
the quality of clinic operations, including the services provided to low income and ESL
taxpayers. Quality of operations is measured by determining how well grantees fulfill
the prongs of the LITC mission statement and the related performance measures. The
IRS also compiles and analyzes data from the reports to assess the overall success of
the LITC Program. Thus, it is important that grantees provide accurate and complete
reports.
In certain instances, clinics may request an extension of time to submit the Interim or
Year-End report. However, a report will still be considered late if submitted after the
due date, notwithstanding any extensions that may be granted. The request must be
submitted in writing to the LITC Program Office prior to the due date of the report,
and must include an explanation justifying the extension. Please submit an extension
request through www.grantsolutions.gov using a Grant Note.
Failure to timely submit required reports to the LITC Program Office may result in
any or all of the following:
`` Restricted access to grant funds;
`` Reduction of future award amount; or
`` Suspension or termination of grant.
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LOW INCOME TAXPAYER CLINIC
i Interim Reports
NOTE: Interim and Year-End reports may be released under the Freedom of Information Act
(FOIA). In response to a FOIA request, the LITC Program Office may release these
reports after appropriate redactions to ensure confidentiality of taxpayer information.
Interim reports must be submitted online through www.grantsolutions.gov by
July 31, 2015. The Interim report covers the first half of the grant year (January 1
through June 30) and consists of the following items, prepared in accordance with
the relevant instructions.
`` Standard Form 425, Federal Financial Report;
`` Form 13424-L, Statement of Grant Expenditures;
`` Form 13424-N, Program Narrative (covering the period from January 1 – June 30,
2015);
`` Form 13424-A, General Information;
`` Form 13424-K, Controversy Case Information (if applicable);
`` Form 13424-B, Controversy Issues (if applicable); and
`` Form 13424-C, Systemic Advocacy Information.
NOTE: For informational purposes, copies of all required reporting forms and instructions are
included in Appendix C. However, grantees must complete and submit reporting forms
in Grant Solutions.
ii Year-End Reports
Year-End reports must be submitted online through www.grantsolutions.gov by
March 31, 2016. The Year-End report covers the entire grant year (January 1, 2015
through December 31, 2015). When preparing the program narrative, information
may be incorporated by reference from the Interim Report program narrative, as
appropriate. A complete Year-End report consists of the following items, prepared
in accordance with the relevant instructions.
`` Standard Form 425, Federal Financial Report;
`` Form 13424-L, Statement of Grant Expenditures;
`` Form 13424-N, Program Narrative (covering the period from January 1 – December 31, 2015)
LOW INCOME TAXPAYER CLINIC
65
`` Form 13424-A, General Information;
`` Form 13424-K, Controversy Case Information (if applicable);
`` Form 13424-B, Controversy Issues (if applicable); and
`` Form 13424-C, Systemic Advocacy Information.
NOTE: For informational purposes, copies of all required reporting forms and instructions are
included in Appendix C. However, grantees must complete and submit reporting forms
in Grant Solutions.
NOTE: Subject to OMB approval, the LITC Program Office may require additional reporting
information from LITC grantees. Please refer to the LITC Toolkit prior to submitting
your application for updates to information reporting requirements.
VI
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LOW INCOME TAXPAYER CLINIC
VII PROGRAM OFFICE RESPONSIBILITIES
A GENERAL RESPONSIBILITIES
The LITC Program Office is responsible for managing and administering the LITC grant
program in a manner so as to ensure that Federal funding is expended and funded
programs are implemented in full accordance with U.S. statutory and public policy requirements. In fulfilling its responsibilities, the Program Office will provide assistance
to and oversight of grantees.
B ASSISTANCE AND OVERSIGHT
The LITC Program Office will assist applicants and grantees in various ways, including:
1. Furthering the clinics’ understanding of the LITC program and their roles within the
program;
2. Answering questions from potential LITC applicants and current grantees;
3. Providing technical assistance, suggestions, recommendations, and guidance to
LITCs regarding operation of their programs;
4. Maintaining the LITC Toolkit website which is used to disseminate program guidance to grantees and provide resources to assist clinics in serving low income and
ESL taxpayers;
5. Maintaining Publication 4134, which lists all federally funded LITCs and ensuring
that the publication is included in appropriate IRS mailings and mentioned in appropriate IRS publications;
6. Informing the public about the availability of LITCs, as appropriate, and to the extent permitted by law, including references on the IRS website at www.irs.gov;
7. Coordinating and making periodic site assistance visits;
8. Issuing special appearance authorization letters for student practice if a controversy LITC wishes to have students working in the clinic represent taxpayers; and
9. Coordinating access to e-services products offered by the IRS.
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i Site Assistance Visits
The LITC Program Office will periodically perform site assistance visits to selected clinics. These visits provide an opportunity for the Program Office to share
information with grantees about program issues and identify areas where clinic
services can be improved. Site assistance visits also provide an opportunity for
clinic personnel to ask questions and share information about problems they may
be encountering and to identify best practices that can be shared with all LITCs.
In addition, site assistance visits are an integral part of the performance measures
verification process and help to ensure that grant funds are being used appropriately and that the grantee is complying with the terms and conditions of the LITC
grant award and Program guidelines.
Generally, there are three types of site assistance visits: an orientation visit, an
operational review visit, and a Local Taxpayer Advocate visit.
All new grantees will receive an orientation visit, generally within the first 120 days
of their initial funding year. An orientation visit provides an opportunity to familiarize a new grantee with LITC program requirements and to measure the progress
of its start-up activities. Specifically, an orientation visit allows the LITC Program
Office to assess the status of newly funded clinics and to identify potential areas
where the organization may need to improve and or create processes or systems
to meet the requirements of the LITC program. The LITC Program Office will issue
a written report of the orientation visit within 30 days of the visit.
All clinics will receive periodic operational review visits. The purpose of an operational review visit is to evaluate a clinic’s overall operations, including its internal
and administrative controls. The LITC Program Office strives to conduct an operational review visit to each clinic at least once every three years. However, the LITC
Program Office may conduct an operational review at any time.
During an operational review visit, an LITC program analyst may observe and
evaluate a grantee’s program activities and services, and discuss with clinic personnel the progress made in achieving program goals and objectives. The analyst
may review a clinic’s processes and procedures, including internal controls, personnel policies, training plans, privacy and confidentiality policies, and financial
records. The analyst may examine intake procedures, systems for monitoring and
tracking cases handled by clinic staff or referred to volunteers, outreach plans and
materials, education curricula, fee policies, and client satisfaction instruments.
In addition, the analyst may interview clinic staff, students, and volunteers who
provide services to taxpayers. As part of monitoring and evaluating clinic activities, however, the LITC Program Office will be mindful of the clinic’s duty to protect
confidential information.
Prior to an operational review visit, the LITC program analyst will conduct a previsit assessment that will include a review of the grantee’s application, program
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LOW INCOME TAXPAYER CLINIC
LITC PROGRAM OFFICE RESPONSIBILITIES
plan, budget, and prior period reports. Based on this assessment, the analyst will
identify items to be reviewed and will provide the Clinic Director with a preliminary
list of items and topics to be reviewed during the site visit. Additional items may
be requested during or after the site visit. The grantee should have all requested
documents, including adequate records to support the sources and uses of funds,
available for review during the site visit. The grantee must be prepared to demonstrate compliance with all standards of operation.
The LITC Program Office will issue a written report of the operational review visit,
including findings, recommendations, and required corrective actions, generally
within 90 days of the visit.
In years when the IRS does not conduct an operational review visit, a
grantee should expect to receive at least one visit from its LTA. The LTA visit
is designed to help foster the relationship between the clinic and its local
Taxpayer Advocate Office.
C SUSPENSION OR TERMINATION OF A GRANT
i Grounds for Suspension or Termination
The IRS may suspend or terminate a grant in whole or in part if the grantee fails
to comply with the terms and conditions of the award. A grant award may also
be terminated with the consent of the grantee, in which case the two parties must
agree upon the termination conditions, including the effective date and, in the case
of partial termination, the portion to be terminated.
Notwithstanding that a multi-year grant has been awarded under
IRC § 7526(c)(3), the IRS may terminate a grant during the multi-year period.
ii Notification to Grantees
Suspensions or terminations of grant awards shall be handled in accordance with
2 CFR Part 200. The LITC Program Office will notify the grantee in writing, of any
suspension or termination action, setting forth the reasons for such action and the
effective date. The notification will advise the grantee of its right to object to the
suspension or termination action by providing information and documentation in
writing to challenge the basis for the action.
iii Objection and Reconsideration
If a grantee wishes to challenge the IRS’s decision to suspend or terminate a grant,
the grantee must send a written request to the LITC Program Director for reconsideration of suspension or termination decision. The grantee may provide information and documentation that the program office can consider during the reconsideration. The Director will review the submission and make a recommendation
to the National Taxpayer Advocate, who will make the final decision.
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69
IRC § 7526 does not require the IRS to provide grant recipients an opportunity for
a hearing or an appeal. Therefore, the necessity for renegotiation, suspension, or
termination of a grant agreement will be determined solely by the IRS. The decision of the National Taxpayer Advocate is final.
iv Post-Termination Responsibilities
If the LITC Program Office terminates a grant, the clinic must submit a final financial report and program narrative within 90 days of the termination.
Employees and volunteers of the clinic who are lawyers must adhere to their
responsibilities as attorneys, not just the responsibilities within the parameters of
the LITC Program. The American Bar Association (ABA) has model rules of professional conduct that are applicable when a lawyer is terminating representation.
In this regard, ABA Model Rule 1.16 provides that upon terminating representation of a client, a lawyer must take reasonable steps to protect a client’s interests,
which includes giving notice to the client, allowing the client time to find other representation, and returning papers/property to the client. The state bar may have
a similar rule of professional responsibility that provides guidance for terminating
representation. Courts, such as the United States Tax Court, require the filing of a
motion for leave to withdraw as counsel. See U.S. Tax Court Rule 24.
In addition, if the clinic will no longer participate in the United States Tax Court
Clinical Program, the clinic must notify the Tax Court so that the Tax Court will
cease referring taxpayers to that clinic. Once an organization is no longer a
grantee, the clinic should not use “LITC” as part of its name. Circular 230 prohibits
practitioners from providing misleading or deceptive statements or claims. See 31
C.F.R. § 10.30(a)(1). If the organization will continue to exist but will not be receiving grant funds, it may be misleading for the organization to call itself an LITC. In
appropriate circumstances, the LITC Program Office may need to refer the matter
to the Office of Professional Responsibility.
In addition, if the clinic will no longer participate in the United States Tax Court
Clinical Program, the clinic must notify the Tax Court so that the Tax Court will
cease referring taxpayers to that clinic. Once an organization is no longer a
grantee, the clinic should not use “LITC” as part of its name. Circular 230 prohibits
practitioners from providing misleading or deceptive statements or claims. See 31
C.F.R. § 10.30(a)(1). If the organization will continue to exist but will not be receiving grant funds, it may be misleading for the organization to call itself an LITC. In
appropriate circumstances, the LITC Program Office may need to refer the matter
to the Office of Professional Responsibility.
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APPENDIX A
APPENDIX A
APPLICATION AND NCC GENERAL
INFORMATION FORMS
LOW INCOME TAXPAYER CLINIC
71
Low Income Taxpayer Clinic (LITC)
Application Information
OMB Number
1545-1648
Grant Period Request (Check one)
Single year request
Multi-year request
1st of 3 years
2nd of 3 years
3rd of 3 years
Grant Amount Requested
Controversy
ESL
Total
Applicant Information
Legal name of sponsoring organization
Prefix
Last name
First name
Middle initial
Suffix
State
ZIP + 4 code
Title
Phone number
FAX number
Email address
Applicant's Mailing Address
Street
Street address line 2
City
Clinic Information
Name of clinic
Public telephone number
Toll-Free telephone number (if applicable)
FAX number
Website address (if applicable)
Languages served in addition to English
Clinic Street Address
Clinic Mailing Address
Street
Street
City
State
ZIP + 4 code
City
State
ZIP + 4 code
Middle initial
Suffix
Clinic Director Information
Prefix
Last name
First name
Telephone number
Email address
Licenses/Certifications (Check all that apply)
Attorney
CPA
Form 13424 (Rev. 4-2013)
Enrolled Agent
Other
Catalog Number 36126D
www.irs.gov
Department of the Treasury - Internal Revenue Service
Page 2
Qualified Tax Expert (QTE)
Prefix
Last name
First name
Telephone number
Middle initial
Suffix
Middle initial
Suffix
Email address
Licenses/Certifications (Check all that apply)
Attorney
CPA
Enrolled Agent
Other
Qualified Business Administrator (QBA)
Prefix
Last name
Telephone number
First name
Email address
Instructions for Form 13424, Low Income Taxpayer Clinic (LITC) Application Information
Each grant application and non-competitive continuation application must include Form 13424, Application Information.
LITC Grant Applications may be released under the Freedom of Information Act (FOIA). In response to a FOIA request, the LITC
Program Office will release this application after appropriate redactions to ensure confidentiality of taxpayer information.
Purpose
This form is used to report basic information about the grant, including the amount and period of the grant requested, basic contact
information for the clinic, and key staff members.
The Program Office uses the information reported on this form to send correspondence to the clinics and also to share with taxpayers
through various IRS publications. Please be careful to follow the instructions for this form and to report all information completely and
accurately. A complete response means an entry must be provided for each field.
Specific Instructions
Grant Period Request
Under IRC § 7526, the LITC Program Office is authorized to issue grants for a period of one, two, or three years. Check the appropriate
box for single or multi-year request. If multi-year grant is selected, indicate whether the application accompanies a request for funding in
the first, second, or third year of the multi-year grant. Applicants who have never been awarded an LITC grant may only apply for a
single year grant.
Grant Amount Requested
Input the amount, rounded to whole dollars, that is requested for controversy and English as a Second Language (ESL) program
funding. You must input zero if you do not wish funding for a certain program. The maximum total funding that may be requested by an
applicant in a single year is $100,000.
Applicant Information
Enter the contact information for the organization applying for the grant. If a grant is awarded, the award will be payable to the
organization listed in this section. Please provide a complete response, including zip plus-four code, for Applicant’s Mailing Address.
Phone numbers should be formatted as 123-456-7890 x.111.
Clinic Information
Enter information in this section relating to the clinic that will be providing services to taxpayers.
For clinics awarded an LITC grant, the information entered in this section is used exactly as entered to populate IRS Publication 4134,
Low Income Taxpayer Clinic List. Publication 4134 is the primary tool for many low income and ESL taxpayers to locate LITC services.
Please provide a complete response, including zip plus-four code, for Applicant’s Mailing Address, Clinic Street Address, and Clinic
Mailing Address. Do not write “same.” Phone numbers should be formatted as 123-456-7890 x.111. When providing the clinic’s website
address, please provide the direct link to the LITC page if one is available. If no website exists, write “none.”
Please individually list all languages in addition to English in which services can be provided on site. If the clinic uses a telephone or
internet based translation service, state “other languages through interpreter services.”
All applicants are required to designate a Clinic Director, Qualified Tax Expert (QTE), and Qualified Business Administrator (QBA) at
the time of application. Applicants for controversy funding are required to have a Clinic Director, QTE, and QBA on permanent staff.
ESL only applicants are not required to have a QTE on staff; however the QTE must be identified on this form and available to review
all educational materials for accuracy before distribution. For more information on these positions, see Publication 3319, LITC Grant
Application and Guidelines. For each staff member, listed, list any licenses and certifications relevant to providing controversy services.
Form 13424 (Rev. 4-2013)
Catalog Number 36126D
www.irs.gov
Department of the Treasury - Internal Revenue Service
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,VWKH$SSOLFDQW'HOLQTXHQW2Q$Q\)HGHUDO'HEW" ,I³| File Type | application/pdf |
| File Title | Publication 3319 (Rev. 5-2014) |
| Subject | Low Income Taxpayer Clinics (LITC) Grant Application Package and Guidelines |
| Author | IRS |
| File Modified | 2014-05-19 |
| File Created | 2014-05-16 |