Publication 3319 - Low-Income Taxpayer Clinics Grant Application Package and Guidelines

Low-Income Taxpayer Clinic Grant Application Package and Guidelines; Grant Website

Pub 3319--2018

Publication 3319 - Low-Income Taxpayer Clinics Grant Application Package and Guidelines

OMB: 1545-1648

⚠️ Notice: This form may be outdated. More recent filings and information on OMB 1545-1648 can be found here:

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LITC

LOW INCOME
TAXPAYER CLINICS

Representation • Education • Advocacy

2019 Grant Application Package and Guidelines

TABLE OF CONTENTS

MAY 2018
DEAR PROSPECTIVE LOW INCOME TAXPAYER CLINIC GRANT APPLICANT:
I am pleased to announce the opening of the 2019 Low Income Taxpayer Clinic (LITC) grant application
period, which runs from May 16 through June 27, 2018.
Under Internal Revenue Code (IRC) § 7526, the IRS provides matching grants of up to $100,000 per year
to qualifying organizations to represent low income taxpayers in disputes with the IRS and to educate
persons who speak English as a second language (ESL) about their rights and responsibilities as U.S.
taxpayers. LITC services must be provided for free or for no more than a nominal fee. If you would like
to know more about the activities and accomplishments of organizations that have been awarded LITC
funding in prior years, see Publication 5066, LITC Program Report.
This publication outlines eligibility requirements for LITC matching grants and provides instructions about
how to apply for a matching grant. Topics include:
nnAward

eligibility requirements;

nnOther

eligibility and compliance requirements;

nnApplication
nnStandards

and selection process;

nnReporting
nnLITC

for operating a Low Income Taxpayer Clinic operation;
responsibilities;

Program Office responsibilities;

nnApplication
nnReporting

forms and instructions; and

forms and instructions.

This publication, including the Appendices, should be retained for future reference by all LITC grant
recipients.
The IRS remains committed to achieving maximum access to representation for low income taxpayers
under the terms of this grant program. Thus, in awarding 2019 LITC grants, we will continue to work
toward the following program goals:
nnExpanding

coverage in areas identified as underserved; and

nnEnsuring

that grant recipients demonstrate that they are serving geographic areas that have sizable
populations eligible for and requiring LITC services.

The IRS may award grants to qualifying organizations for one-year to three-year project periods.
To be considered for 2019 LITC Program grant funding, all Full Grant Applications and Non-Competing
Continuation (NCC) Requests must be submitted electronically by 11:59pm (EST) on June 27, 2018,
via www.grants.gov or www.grantsolutions.gov, respectively. The cost of preparing and submitting
applications is the responsibility of each applicant.

LOW INCOME TAXPAYER CLINIC

Starting with Full Grant Applications in 2019, applicants must receive a minimum score during the
technical evaluation to be considered further. Additional information about this change is found in
Section V.A, Technical Evaluation of Full Grant Applications and Scoring Criteria.
The LITC Program Office will notify each applicant in November 2018 about whether it was selected to
receive a matching grant for 2019. Applicants notified they have been selected to receive a 2019 grant
award must attend the Annual LITC Grantee Conference in December 2018, held in Washington, D.C.
If you have questions about the LITC Program or grant application 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 2019 LITC grantees to
ensure the fairness and integrity of federal tax administration.
Sincerely,

Nina E. Olson
National Taxpayer Advocate

TABLE OF CONTENTS

TABLE OF CONTENTS
I.

LITC PROGRAM DESCRIPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. LITC Grant Program Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. History of the LITC Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. Statutory Authority to Fund LITCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D. Key Terms and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. FEDERAL AWARD INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Awards are Subject to Congressional Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
B. Award Performance Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. Subgrants are Prohibited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
D. LITC Grants are not Cooperative Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

III. AWARD ELIGIBILITY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A. Eligible Applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. Requirement to Provide Matching Funds Equal to Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
C. Other Eligibility Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
i. Using Grant Funds to Support Other Activities is Prohibited . . . . . . . . . . . . . . . . . . . . . . . . 12
ii. Charging More Than a Nominal Fee for Services is Prohibited . . . . . . . . . . . . . . . . . . . . . . 13
iii. Compliance with Federal Tax and Nontax Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 13
iv. Debarment and Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

IV. APPLICATION AND SUBMISSION PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
A. Accessing the LITC Grant Application Package and Guidelines . . . . . . . . . . . . . . . . . . . . . . . . 15
B. Required Content for LITC Full Grant Applications and Non-Competing Continuation
(NCC) Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
i. Determining Type of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ii. Completing and Submitting a Full Grant Application on Grants.gov . . . . . . . . . . . . . . . . . . . 15
iii. Instructions for Completing Full Grant Application Forms . . . . . . . . . . . . . . . . . . . . . . . . . . 16
iv. Completing and Submitting an NCC Request on Grantsolutions.gov . . . . . . . . . . . . . . . . . . 17
v. Instructions for Completing NCC Request Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
vi. Withdrawing Applications after Submission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
C. System For Award Management (SAM) Registration Requirement and Unique Entity
Identifier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
i. System for Award Management (SAM.gov) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ii. Employer Identification Number (EIN) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
iii. Data Universal Numbering System (DUNS) Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

LOW INCOME TAXPAYER CLINIC

iii

D. Submission Due Dates and Times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
i. Due Date for LITC Full Grant Applications and NCC Requests . . . . . . . . . . . . . . . . . . . . . . 19
ii. Incomplete or Late LITC Full Grant Applications and NCC Requests . . . . . . . . . . . . . . . . . . 19
E. Budget Considerations and Funding Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
i. Spending LITC Grant Funds and Matching Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ii. Direct vs. Indirect Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
iii. Meeting the Matching Funds Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
iv. OMB Audit Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

V. APPLICATION REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
A. Technical Evaluation of Full Grant Applications and Scoring Criteria . . . . . . . . . . . . . . . . . . . . 29
B. LITC Program Office Evaluation of Full Grant Applications and NCC Requests, and Selection . . 30
i. LITC Program Office Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ii. Civil Rights Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

VI. AWARD ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
A. Notification of Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
B. Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
C. Administrative Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
i.

Standards for Operating an LITC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

ii. Annual LITC Grantee Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
iii. Developing a Community Outreach Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
iv. Building Community Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
v. Networking with Other LITCs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
vi. Mentoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
vii. Technical Assistance Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
viii. Maintaining Client Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ix. Recruiting and Supervising Volunteers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
x. Recordkeeping and File Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
xi. Representing Low Income Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
xii. Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
xiii. Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
xiv. Preparing Tax Returns and ITIN Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
D. National Policy Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
i. General Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ii. Managing Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
iii. Lobbying Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

TABLE OF CONTENTS

E. Reporting Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
i. Events Requiring Notification to the LITC Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ii. Submitting the Interim Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
iii. Submitting the Year-End Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
iv. Grant Close-Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

VII. LITC PROGRAM OFFICE RESPONSIBILITIES AND CONTACT . . . . . . . . . . . . . . . . . . . . . . 74
A. Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
B. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
C. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
D. Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
E. Site Assistance Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
F. Contacting the LITC Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

VIII. AWARD SUSPENSION OR TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
APPENDIX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
COMMONLY USED ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

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 Forms and Publication Division, 1111 Constitution Ave. NW, Washington, DC 20224.
Do not send grant application forms to this address. Grant applications must be submitted through www.
grants.gov and continuation requests must be submitted through www.grantsolutions.gov. Comments about
this application package 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

LOW INCOME TAXPAYER CLINIC

This page intentionally left blank.

I. LITC PROGRAM DESCRIPTION
A. LITC GRANT PROGRAM PRIORITIES
I. LITC PROGRAM DESCRIPTION

LITCs Provide Representation, Education, and Advocacy
The mission of the Low Income Taxpayer Clinic (LITC) Program is to ensure the fairness and integrity of the
federal tax system for all taxpayers, particularly those like low income individuals and taxpayers for whom English
is a second language (ESL).
LITC grantees must:
nnRepresent

individual low income taxpayers in controversies with the IRS;

nnEducate

low income and ESL taxpayers about their rights and responsibilities as U.S. taxpayers;

nnIdentify

and advocate for issues that impact low income taxpayers;

nnProvide

dollar-for-dollar matching funds; and

nnOffer

LITC services for free or for no more than a nominal fee.

In December 2015, Congress enacted the Taxpayer Bill of Rights (TBOR)1 in Internal Revenue Code
(IRC) § 7803(a)(3), which requires the IRS Commissioner to ensure that employees of the IRS are familiar,
and act in accordance, with taxpayer rights. The TBOR also educates taxpayers that they have rights; that
knowledge, in turn, empowers taxpayers to assert those rights during their interactions with the IRS. One
of the ten fundamental rights taxpayers have when dealing with the IRS is the right to retain representation,2
meaning taxpayers have the right to retain an authorized representative of their choice to represent them in their
interactions with the IRS. A taxpayer who cannot afford to hire a representative has the right to be informed
about their potential eligibility for assistance from an LITC. The LITC Program protects taxpayers’ rights by
providing 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.

III
IV
V
VI

Helping a taxpayer avoid a controversy through education and outreach is another essential function of LITCs.
LITCs are required to educate taxpayers on their rights and responsibilities to help them understand the U.S.
tax system, exercise their rights as taxpayers, and comply with their tax responsibilities. Learning is enhanced by
providing an opportunity for taxpayers to ask questions and interact with clinic staff. Outreach activities may
involve direct communication with taxpayers or be accomplished indirectly through other organizations or groups
that assist low income and ESL taxpayers.

VII
VIII
APPENDICES

At least 90 percent of the taxpayers the LITC represents must be low income, meaning a taxpayer’s income does
not exceed 250 percent of the Federal Poverty Guidelines. In addition, when an LITC represents a taxpayer, the
dollar amount in controversy for any tax year generally must not exceed the amount specified in IRC § 7463
for eligibility for special small case procedures in the U.S. Tax Court (currently $50,000). See Section VI.C.xi,
Representing Low Income Taxpayers, Low Income Taxpayers and the 90/250 Rule.

GLOSSARY
INDEX

1 See IR-2014-72 (June 10, 2014).
2 See Consolidated Appropriations Act, 2016, Public Law 114-113, Division Q, § 401, 129 Stat. 2242, 3117 (Dec. 18, 2015).

LOW INCOME TAXPAYER CLINIC

The IRS remains committed to achieving maximum access to representation for low income taxpayers under the
terms of this grant program. Thus, in awarding 2019 LITC grants, we will continue striving to provide services to
low income and ESL taxpayers in every state, the District of Columbia, and Puerto Rico.
Areas of Special Consideration
Hawaii, North Dakota, Puerto Rico, mid-Florida, northeast Arizona, northern Pennsylvania, and southeast New York
(not including boroughs of New York City).
Important Dates for 2019 LITC Grant Program
Application period

May 16 – June 27, 2018

Application review and evaluation

June – October 2018

Notification of selection/non-selection

November 2018

Annual LITC Grantee Conference

Early December 2018

Grant year

January 1, 2019 – December 31, 2019

Interim report due

July 30, 2019

Year-End report due

April 1, 2020

B. HISTORY OF THE LITC PROGRAM
As part of the Internal Revenue Service Restructuring and Reform Act of 19983 (RRA 98), Congress enacted
IRC § 7526 to authorize funding for the LITC grant program. The IRS created the LITC Program Office in
1999 to provide guidance, assistance, and oversight to LITC grantees and prospective applicants. The LITC
Program Office is part of the Office of the Taxpayer Advocate (commonly referred to as the Taxpayer Advocate
Service (TAS)).

3 See Public Law 105-206, § 3601, 112 Stat. 685, 774 (July 22, 1998).

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM DESCRIPTION

Figure 1, 2018 LITC Coverage by County

WI
MI

IL
CO

CA
AZ

KY
TN

MD
VA

VT
NH
MA

NJ
DE

NC
SC

MS
TX

I. LITC PROGRAM DESCRIPTION

LITC Service
Covered

Not Covered

FL
HI

II
III

In 1999, the IRS awarded grants totaling less than $1.5 million to 34 entities located in 18 states and the District
of Columbia. The LITC Program Office’s history of recruiting efforts coupled with sound judgment in selecting
federal grant recipients has fostered the growth of a nationwide network of independent organizations working
towards a common purpose in their local communities. In 2018, the IRS awarded over $11,800,000 in grants to
134 grantees located in 48 states and the District of Columbia.

IV
V

The maximum statutory award amount of $100,000 per grantee has remained constant since the creation of the
program. Despite this limitation, our grantees have consistently delivered tremendous results. Twenty-two of the
34 organizations that received an award in the first year of the LITC Program are still with the program today;
however, new organizations apply for and are awarded LITC grants annually.

VI
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

C. STATUTORY AUTHORITY TO FUND LITCs
The authority to create low income taxpayer clinics is derived from IRC § 7526. The text of IRC § 7526 is
reprinted in full below:

Section 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.
(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.

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM DESCRIPTION

(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.
I. LITC PROGRAM DESCRIPTION

(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 dollarfor-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.
III
IV

D. KEY TERMS AND DEFINITIONS

Advocacy means zealously protecting the rights of low income and ESL taxpayers as United States taxpayers.
Advocacy can occur on an individual or systemic basis. A substantial portion of LITC work is spent assisting
clients with an IRS controversy to explore all possible options for relief, and to assist the clients in making a fully
informed decision on how to proceed. Notwithstanding the unique nature of each taxpayer’s circumstances,
similarly situated taxpayers experience similar problems with tax administration. Advocacy includes identifying
systemic-level issues and sharing them with TAS. TAS investigates the submissions, proposes solutions, and works
with the IRS to resolve the issue, or elevates the issue to the National Taxpayer Advocate who can communicate
those issues and proposed solutions to lawmakers and IRS administration in her Annual Report to Congress.

VI
VII
VIII
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

APPENDICES

Amount in controversy means the amount in dispute for each tax year for which the LITC is representing the
taxpayer. Often the amount in controversy is the amount owed or the refund requested that is in dispute. In
some disputes with the IRS, however, the amount in controversy is the amount associated with an action taken
by the IRS. The amount includes the tax liability in dispute for a tax year, plus any related penalties imposed.
Whether interest is included in the amount in controversy will depend on the nature of the controversy. Further,
the amount in controversy is limited to the amount in dispute, which may be less than the amount specified in a
statutory notice of deficiency, a notice of determination, or a notice and demand. If the taxpayer is disputing the
amount due in more than one tax year or period, the amount in controversy is the amount in dispute for a single
tax year. See Section VI.C.xi Representing Low Income Taxpayers, Amount in Controversy Limit.

Cases are counted and reported in inventory when a taxpayer retains the clinic to act in a representative capacity
before the IRS or a federal court in a controversy and the clinic takes steps to address the controversy, including
developing a plan for advocacy.
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 (opening a case). This would include fact gathering and
contact with the IRS that does not rise to the level of advocacy.
Controversy with the IRS means a proceeding brought by the taxpayer under Title 26 or any dispute between

an individual and the IRS concerning the determination, collection, or refund of any tax, penalties, or interest
under the IRC. The definition is very broad and encompasses all types of disputes arising under the IRC, except
criminal tax matters. For example, a controversy includes a dispute related to the tax provisions of the Affordable
Care Act, a revocation or denial of a passport under section 7345, and certain civil actions arising under
IRC §§ 7431 to 7435. The dispute may be pending in a federal court or in any tax administration function
of the IRS (e.g., Examination, Collection, Appeals, Accounts Management). While representing a taxpayer in
a controversy with the IRS, an LITC may also need to represent the taxpayer in a controversy with a state or
local tax agency concerning the same or related tax matter. A controversy does not include a federal criminal
tax matter, although it may include a state criminal matter. For example, a controversy may be considered
a civil matter in the federal context, but a criminal matter under state or local law. If the LITC is already
representing the taxpayer in the federal civil matter, it may be appropriate for the LITC to expand the scope of the
representation to include the state or local matter.
Educational activities are programs designed to inform ESL or low income taxpayers about their rights and
responsibilities as taxpayers, as well as tax issues of particular significance to the intended audience and generally
delivered in person. Educational activities may also include a workshop or free training for other organizations
that assist low income or ESL taxpayers. To be considered an educational activity, information about a specific
tax topic or topics must be conveyed to the audience. LITCs should address a wide range of substantive tax issues
in their educational programs and materials (e.g., filing requirements, tax recordkeeping, family status issues,
refundable credits, the Affordable Care Act, worker classification, identity theft, information about the audit and
appeals process, and collection alternatives). LITCs prepare and distribute materials in languages appropriate
for the ESL communities they assist. Selecting education topics relevant to community needs and offering the
presentations in languages commonly spoken in the community allows LITCs to reach taxpayers who otherwise
might experience great difficulty communicating with the IRS.
English as a Second Language (ESL) taxpayers are persons for whom English is not the first language. This

group may have additional burden understanding taxpayer rights and responsibilities and is a priority for LITC
outreach efforts. ESL taxpayers who immigrate to the United States may come from countries where the tax
systems operate in a much different fashion, and those arriving from countries with pervasive corruption may
bring with them a mistrust of government institutions. They may be completely unfamiliar with the process of
filing a tax return or even maintaining a bank account.
Grants.gov is the government website where federal agencies post discretionary funding opportunities and
grantees find and apply for them.

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM DESCRIPTION

Grantsolutions.gov is a comprehensive grant management system operated by the Grants Center of Excellence.
Grantees use Grant Solutions to take all actions regarding their grant (except for drawing down funds).
Key personnel are individuals necessary for the successful operation of the LITC. Key personnel are responsible
I. LITC PROGRAM DESCRIPTION

for ensuring that the LITC’s day-to-day operations function smoothly, finances are properly administered,
and legal arguments are sound. Key personnel include the Clinic Director, Qualified Tax Expert (QTE), and
Qualified Business Administrator (QBA). See Section VI.C.i, Standards for Operating an LITC.
Low income taxpayers are individuals whose income does not exceed 250 percent of the Federal Poverty

Guidelines, as determined in accordance with official guidance published by the federal government. 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 VI.C.xi, Representing Low Income Taxpayers.
A sole proprietor is considered an individual and may be assisted if otherwise eligible. A business or other entity is
not a low income taxpayer eligible for LITC representation. An individual trying to resolve a tax liability arising
from personal involvement with a business can be a low income taxpayer. For example, an individual who is
personally liable for taxes owed from a business (e.g., a responsible person within the meaning of IRC § 6672)
may be a low income taxpayer, provided the individual otherwise meets the definition.

Low Income Taxpayer Clinic (LITC) means an organization receiving a grant pursuant to IRC § 7526 that

III

represents low income taxpayers in controversies with the IRS and that operates a program to educate ESL
individuals about their rights and responsibilities under the Internal Revenue Code. The term LITC generally
includes a clinical program at an accredited law, business, or accounting school in which students assist in
the delivery of services, as well as an organization described in IRC § 501(c) and exempt from tax under
IRC § 501(a).

IV
V

Nominal fee means a fee that is insignificantly small or minimal. A nominal fee is a trivial payment, bearing no
relation to the value of the representation provided, considering all the facts and circumstances. A nominal fee
must be a flat fee; the fee cannot fluctuate based on an hourly rate or the type of services the LITC is providing. If
an LITC charges any taxpayer a nominal fee for services, it must charge the same fee to all taxpayers. A nominal
fee does not include reimbursement for actual costs incurred (e.g., photocopies, court costs, and expert witness
fees).

VI
VII

Outreach means an activity conducted by LITCs that involves effectively publicizing and promoting the clinic’s
VIII

services, including representation, education, and advocacy on behalf of low income taxpayers and ESL taxpayers.
LITCs are encouraged to identify particular linguistic populations, geographic service areas, or other segments of
the low income taxpayer community in which to focus outreach efforts. Outreach activities may involve direct
communication with taxpayers or be accomplished through contacts with other organizations or groups that
assist low income and ESL taxpayers. Additional guidance on effective outreach can be found in Section VI.C.iii,
Developing a Community Outreach Plan.

APPENDICES
GLOSSARY
INDEX

Pro bono panel means a group of qualified representatives who have agreed to accept taxpayer referrals from an

LITC and provide representation or consultation free of charge to low income or ESL taxpayers.

LOW INCOME TAXPAYER CLINIC

Program plan means an outline of a clinic’s planned operations, including a description of the services to be
offered, how the services will be delivered, the intended recipients of the services, and numerical goals.
Program to educate means an activity intended to educate taxpayers about their rights and responsibilities
under the IRC, with a focus on issues impacting low income and ESL taxpayers. See Section VI.C.xii, Education.
Qualified representative means a person who is:
nnAn
nnA

attorney;

Certified Public Accountant;

nnAn

Enrolled Agent who is authorized to practice before the IRS;

nnAn

individual authorized to appear before the applicable court where the controversy with the IRS will be
adjudicated; or

nnAn

individual authorized to practice before the IRS pursuant to 31 CFR § 10.7(d) (e.g., a student, law
graduate, tribal court advocate, or other individual for whom the IRS has issued a special appearance
authorization). See Section VI.C.xi., Representing Low Income Taxpayers, Representation by Students and Law
Graduates.

For individuals other than students or law graduates, the Commissioner (or delegate) has the authority to issue
Special Appearance Authorizations to allow practice before the IRS.
If the Director of the LITC Program Office has authorized a student or law graduate to practice before the
IRS, the student or law graduate must be supervised by a qualified representative. See Delegation Order 25-18
(Rev. 2), IRM 1.2.52.19 (Sept. 9, 2015).
Note: An unenrolled return preparer who can practice before the IRS based upon return preparation is not a
qualified representative for purposes of the LITC Program, because the authority of the unenrolled return preparer
to act as a representative is limited to only certain taxpayers and select functions of the IRS.
Referral means the referral of low income taxpayers to a pro bono panel for representation or consultation. An

LITC cannot receive a grant solely for referring taxpayers to other qualified representatives.
A detailed list of terms and definitions are available in the Glossary.

LOW INCOME TAXPAYER CLINIC

II. FEDERAL AWARD INFORMATION
I

A. AWARDS ARE SUBJECT TO CONGRESSIONAL APPROPRIATIONS
I. LITCII.
PROGRAM
FEDERAL DESCRIPTION
AWARD INFORMATION

All awards are subject to the availability of appropriated funds. The IRS may award LITC grants of up to
$100,000 per year to qualifying organizations for the development, expansion, or continuation of an LITC. In
making grant award decisions, the IRS seeks to fund qualified organizations, including academic institutions and
nonprofit organizations throughout the United States, to provide representation, education, and advocacy on
behalf of low income and ESL taxpayers. The IRS awards grant funds to achieve the goals of the LITC Program.
Congress appropriated $12 million for LITC grant awards for 2018, and the IRS awarded over $11.8 million in
grants to 134 entities located in 48 states and the District of Columbia. The average award in 2017 was more
than $86,000, with only the strongest programs receiving the maximum award of $100,000. Figure 2 explains
how the LITC Program receives its funding.

Figure 2, How the LITC Program Receives Its Funding

How the LITC Program Receives Its Funding
Step Four
Step Three

IV IV
V
V
VI
VI VII

OMB coordinates with
federal agencies to
formulate the President’s
Budget, which covers all
federal agencies,
including the IRS, and
reflects the President’s
priorities and vision for
the country. Federal law
requires that the
President submit a budget
proposal to Congress
every February, which
serves as a starting point
for negotiations in
Congress.

Congressional
appropriations
committees consider the
President’s Budget as
they prepare
appropriations legislation
for the upcoming fiscal
year, which begins on
October 1.

III III

Step One

The appropriations
committees submit
legislative proposals
which are brought to the
floor for consideration by
the House of
Representatives and the
Senate. Once the House
and the Senate consider
the proposals and
reconcile them, Congress
passes a unified
omnibus budget and
sends the legislation to
the President to be
signed into law.

Step Two

The President signs the
appropriations bill into
law, making funds
available to executive
agencies, including the
IRS.

VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

The matching funds requirement ensures that each LITC grant represents a financial partnership between the
grantee and the federal government for the benefit of low income and ESL taxpayers. The commitment of
matching funds by the grantee leverages the federal funding investment so that an LITC can assist more taxpayers
in need.
The major expenditures incurred by LITCs are personnel costs and fringe benefits paid to provide direct
representation, education, and advocacy services to low income and ESL taxpayers. Grantees are prohibited from
using matching funds to pay indirect expenses, including general overhead of the grantee.4 This ensures more
program funds are spent on taxpayer representation, education, and advocacy rather than administrative costs.

B. AWARD PERFORMANCE PERIOD
The LITC Program may award grants for up to a three-year period. However, funding is provided for oneyear periods (January 1–December 31), subject to the availability of annually appropriated funds. First-time
applicants will only be awarded a single-year grant. Multi-year grants will only be awarded to applicants that have
successfully completed at least one year under the terms of the LITC grant. Determination of the grant period is
at the discretion of the LITC Program Office. Thus, the Program Office may elect to award a single-year grant to
applicants that requested a multi-year grant.
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 IRS, based on performance, compliance with
grant terms and conditions, and the availability of annually appropriated funds. Funds awarded must be used for
the program specifically authorized in the Notice of Award.
A new applicant seeking an LITC grant award for the first time, or a returning clinic whose LITC award
period has ended, or will end on December 31, 2018, must submit a Full Grant Application. A recipient of an
LITC grant entering the second or third year of a multi-year grant in 2019 must submit an Non-Competing
Continuation (NCC) Request, in lieu of a Full Grant Application. See Section IV, Application and Submission
Process.

C. SUBGRANTS ARE PROHIBITED
A grantee may not make a subgrant of LITC grant funds to another organization or individual. A subgrant
is a payment to another organization or contractor to provide controversy representation or ESL education as
compared to a payment for providing goods and services to the grantee. For example, a grantee 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.

4 IRC § 7526(c)(5).

LOW INCOME TAXPAYER CLINIC

FEDERAL AWARD INFORMATION

D. LITC GRANTS ARE NOT COOPERATIVE AGREEMENTS

I. LITCII.
PROGRAM
FEDERAL DESCRIPTION
AWARD INFORMATION

Funds awarded under IRC § 7526 create grant agreements rather than cooperative agreements between the
recipient and the IRS. A cooperative agreement provides for substantial involvement between the federal
awarding agency and the grant recipient in carrying out the activity contemplated by the federal award. While
the LITC Program Office has numerous responsibilities in administering the grant and providing oversight
to grantees, that involvement does not result in the formation of a cooperative agreement. See the definitions
of “cooperative agreement” and “grant agreement” in 2 CFR § 200.24 and 2 CFR § 200.51, respectively, for
additional details.

II
III III
IV IV
V
V
VI
VI VII
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

III. AWARD ELIGIBILITY REQUIREMENTS
Applicants that fail to satisfy the eligibility screening criteria described below will be notified and, in some
circumstances, may be provided an opportunity to correct the problem. Those provided an opportunity must
correct the problem in a timely manner or be eliminated from consideration. Applications that pass the eligibility
screening will then undergo a technical evaluation. See Section V, Application Review.

A. ELIGIBLE APPLICANTS
To receive a grant pursuant to IRC § 7526, a clinic must represent low income taxpayers in controversies with
the IRS and operate a program to educate ESL taxpayers about their rights and responsibilities under the IRC.
Examples of an eligible applicant include:
nnA

clinical program at an accredited law, business, or accounting school in which students assist in service
delivery; and

nnAn

organization described in IRC § 501(c) and exempt from tax under IRC § 501(a) in which employees
and volunteers in service delivery represent low income taxpayers in controversies with the IRS.

B. REQUIREMENT TO PROVIDE MATCHING FUNDS EQUAL TO AWARD
IRC § 7526(c)(5) requires grantees to provide matching funds on a dollar-for-dollar basis for all federal funds
awarded by the IRS, yet many programs provide matching funds in the form of cash or third-party in-kind
contributions (e.g., time worked by volunteers) that far exceed the minimum. Only funds that are used in direct
support of the LITC Program qualify as matching funds. See Section IV.E.iii, Meeting the Matching Funds
Requirement.

C. OTHER ELIGIBILITY REQUIREMENTS
i. Using Grant Funds to Support Other Activities is Prohibited
An organization funded with an LITC grant may provide qualifying LITC services within a broader spectrum
of activity. For example, a grantee may provide representation in nontax matters (e.g., landlord/tenant disputes)
as well as representation in tax matters, provided LITC grant funds are used only to support the representation
of eligible taxpayers in a controversy with the IRS or a related state or local tax authority, including properly
allocated portions of indirect costs of the organization that support LITC grant activities.

LOW INCOME TAXPAYER CLINIC

AWARD ELIGIBILITY REQUIREMENTS

ii. Charging More Than a Nominal Fee for Services is Prohibited

II I. LITC PROGRAM
III. AWARD
DESCRIPTION
ELIGIBILITY REQUIREMENTS
II

An LITC may not charge more than a nominal fee for its services. If a clinic charges a fee, it must charge that
same fee to all taxpayers, regardless of the services being sought. The goal of the LITC Program is to enhance
access to representation, education, and advocacy services for low income taxpayers. If a clinic charges an amount
that results in fewer taxpayers assisted, the goal of the Program is not being achieved and that amount is not
nominal. A clinic may not charge a separate or additional fee (even if it is nominal) to prepare a tax return or a
claim for refund.
Note: Reimbursement of actual costs incurred (e.g., photocopying, court costs, and expert witness fees) is not
considered a fee and is therefore permitted.

iii. Compliance with Federal Tax and Nontax Requirements
Federal Tax Debts
The IRS is prohibited from awarding an LITC grant to an applicant that is noncompliant with a federal tax
return filing or payment obligation. Consequently, an applicant must be in full compliance with its federal tax
responsibilities when applying for an LITC grant and throughout the grant year. As a result, Standard Form 424
(Appendix) asks whether the applicant is delinquent on any federal debt.

III

IRC § 6103 prohibits the LITC Program Office from disclosing a federal tax compliance issue to anyone who is
not authorized to receive the taxpayer’s tax information. Therefore, to facilitate the resolution of any potential
federal tax compliance issues, Standard Form 424, Application for Federal Assistance (specifically the Applicant
Federal Debt Delinquency Explanation), and Form 13424, Low Income Taxpayer Clinic (LITC) Application
Information, require applicants to provide contact information for the individual responsible for handling the
organization’s federal tax matters. Some applicants are part of a larger organization (e.g., academic institution
which operates a clinic), in which case the LITC Program Office must be able to verify that the sponsoring
organization does not have a federal tax compliance issue before awarding grant funds. Applicants must also
provide documentation (e.g., articles of organization or a Form 2848, Power of Attorney and Declaration of
Representative) which shows how such individual referred to as a Tax Compliance Officer on Form 13424 is
properly authorized to receive tax information to prevent the IRS from making an unauthorized disclosure.

IV IV
V
V VI
VI VII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

VII
VIII

Complying with federal tax obligations is a requirement to receive an LITC grant, so it is imperative that the
designated individual be knowledgeable and prepared to promptly address any federal tax issues of the clinic or the
sponsoring organization. Failure to provide an appropriate contact could delay application processing in the event
the LITC Program Office identifies a federal tax compliance issue of the applicant or its sponsoring organization
and needs to discuss the issue further. In addition, if the LITC Program Office is unable to speak with the
appropriate contact to ascertain the status of the organization’s efforts to address the federal tax compliance issue,
no grant funds will be awarded to the applicant. Similarly, even after grant funds have been awarded, the LITC
Program Office performs tax compliance checks throughout the grant year. Without an appropriate contact with
whom the LITC Program Office can discuss a tax compliance issue, in the event a tax compliance issue arises
during the grant year, the LITC Program Office may need to freeze the clinic’s funds.

An outstanding federal tax debt is any unpaid federal tax liability (including penalties and interest) that has
been assessed, is not disputed, and for which all judicial and administrative remedies have been exhausted or
have lapsed. An applicant or grant recipient will not be treated as noncompliant for purposes of IRC § 7526
(and therefore still eligible for funding) if the applicant or grant recipient is in a dispute with the IRS regarding
a federal tax liability, or has entered into and remains current with an installment agreement or other payment
arrangement with the federal government to satisfy any federal tax liabilities.

Federal Nontax Requirements
In general, the IRS will not award an LITC grant to an applicant that is noncompliant with a federal nontax filing
or payment obligation. An outstanding federal nontax obligation is an unpaid federal debt (other than a federal
tax obligation) that has been assessed, is not disputed, and for which all administrative and judicial remedies have
been exhausted or have lapsed. An applicant or grant recipient will not be treated as noncompliant for purposes
of IRC § 7526 (and therefore still eligible for funding) if the applicant or grant recipient is in a dispute with the
IRS regarding a federal nontax liability, or has entered into and remains current with an installment agreement
or other payment arrangement with the federal government to satisfy any outstanding federal nontax obligations.
The LITC Program Office utilizes the System for Award Management (SAM) to determine ineligible grant
recipients and prevent improper payments.

iv. Debarment and Suspension
When applying for a grant, applicants are required to make certain certifications and provide certain assurances.
One of these certifications is the Certification Regarding Debarment, Suspension, and Other Responsibility Matters –
Primary Covered Transactions. Applicants may check this before applying by visiting SAM.gov. If an applicant
identifies incorrect information about the organization or individuals within the organization, the applicant
should contact the agency that reported the information.

LOW INCOME TAXPAYER CLINIC

IV. APPLICATION AND SUBMISSION PROCESS
I

A. ACCESSING THE LITC GRANT APPLICATION PACKAGE AND GUIDELINES
III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

A copy of this guide can be downloaded from www.irs.gov/pub/irs-pdf/p3319.pdf or you can request
a copy be mailed to you. For information about ordering IRS Publications, including this one, visit
www.irs.gov/forms-pubs/forms-and-publications-by-us-mail.
Preparing and submitting your grant application is a major undertaking. Take time to understand and review the
process well in advance of the application submission deadline. Prepare and start as early as possible. Completing
the required registrations for the first time is a multi-step process that can take more than eight weeks and MUST
be completed before the application submission deadline. See Section IV.C.i, System for Award Management for
steps that should be taken as early in the application process as is possible.

B. REQUIRED CONTENT FOR LITC FULL GRANT APPLICATIONS AND
NON-COMPETING CONTINUATION (NCC) REQUESTS
i. Determining Type of Application
There are two types of LITC grant applications: LITC Full Grant Applications and NCC Requests.
nnA

new applicant seeking an LITC grant award for the first time, or a returning clinic whose LITC award
period has ended, or will end on December 31, 2018, must submit a Full Grant Application to apply
for 2019 funding. See Section IV.B.ii, Completing and Submitting a Full Grant Application Package on
Grants.gov.

nnA

returning clinic funded with a multi-year LITC grant that ends after December 31, 2018, must submit an
NCC Request to be considered for 2019 funding. See Section IV.B.iv, Completing and Submitting an NCC
Request on Grantsolutions.gov.

V VI

ii. Completing and Submitting a Full Grant Application on Grants.gov

VI VII
VII
VIII

LITC Full Grant Applications must be submitted electronically via www.grants.gov. The submission system on
grants.gov provides free access to the necessary forms required to complete an application and notifies applicants
if any fields were left blank where a response is required. The grants.gov website includes a narrated tutorial and
Frequently Asked Questions to help you use the system. Applicants will receive an email confirmation from
grants.gov that serves as acknowledgement of application submission.

APPENDICES

The Funding Opportunity Number for the 2019 LITC Grant Application is TREAS-GRANTS-052019-001.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

iii. Instructions for Completing Full Grant Application Forms
Appendix A of this publication is a useful guide for completing each of the required application forms. The
Office of Management and Budget (OMB) requires certain standard forms for use in all federal grant programs.
The IRS also requires forms be completed specifically for an LITC grant. To assist applicants in completing the
required forms, the appendix includes screen shots and instructions for completing the forms, as well as examples.
A complete Full Grant Application consists of the following items, submitted through www.grants.gov and
prepared in accordance with the relevant instructions.
a. Standard Form 424, Application for Federal Assistance;
b. Standard Form 424A, Budget Information – Non-Construction Programs;
c. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information;
d. IRS Form 13424-J, Detailed Budget Worksheet and Narrative;
e. IRS Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative; and
f. Attachments Form (used to attach the following items):
nn Tax

exemption determination letter, if applicable;*

nn Proof

of academic accreditation, if applicable;*

nn Most

recent audited financial statement (if the applicant expends $750,000 or more in federal funds
during the applicant’s fiscal year, this must be a single audit or program-specific audit as defined in
2 CFR § 200.501.) If the applicant’s most recent audited financial statement is available on the Federal
Audit Clearinghouse found at harvester.census.gov/facweb/ then in lieu of attaching the audit, please
indicate in an attached statement that it is available on the clearinghouse site (See Section IV.E.iv, OMB
Audit Requirement); *

nn 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;*

nn Applicants

must also provide documentation (e.g., articles of organization or a Form 2848) which shows
that the designated Tax Compliance Officer on Form 13424 is properly authorized to receive tax information; and

nn Indirect

cost rate agreement, if applicable.*

* Items marked with an asterisk must be submitted via the Attachments Form (which is incorporated into the
downloadable PDF from www.grants.gov).
Please note that the current online version of Form 13424-M does not include a place to respond to the following
request for Civil Rights Statements:
nnA

description of how the needs of individuals with limited English proficiency (LEP) or individuals who
may need a reasonable accommodation will be addressed in order to access services;

nnA

statement that all required records will be compiled and maintained, as appropriate, by the applicant
according to the agency’s guidelines; and

LOW INCOME TAXPAYER CLINIC

APPLICATION AND SUBMISSION PROCESS

statement that the applicant agrees to display Publication 4053, Civil Rights Poster (provided to by the
Internal Revenue Service).

nnA

III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

Successful applicants will be asked to address the statements in the Application Amendment. Section VI.E,
Reporting Responsibilities, Completing the Application Amendment Package.

iv. Completing and Submitting an NCC Request on Grantsolutions.gov
A returning clinic funded with a multi-year LITC grant that ends after December 31, 2018, must submit an
NCC Request. All NCC Requests must be submitted via www.grantsolutions.gov. The submission system
on grantsolutions.gov provides free access to the necessary forms required to complete an NCC and notifies
applicants if any fields were left blank where a response is required. NCC Requests will receive an email
confirmation from grantsolutions.gov that serves as acknowledgement of the NCC Request submission. Do not
submit NCC Requests via www.grants.gov. The LITC Program Office will provide annual training on how to
use www.grantsolutions.gov to submit reports and NCC Requests. Additional questions regarding the use of
www.grantsolutions.gov may be directed to the Program Office at [email protected].

v. Instructions for Completing NCC Request Forms
Appendix A of this publication is a useful guide for completing each of the required forms for an NCC Request.
The Office of Management and Budget (OMB) requires certain standard forms for use in all federal grant
programs. The IRS also requires forms be completed specifically for an LITC grant. To assist applicants in
completing the required forms, the appendix includes screen shots and instructions for completing the forms, as
well as examples.

A complete NCC Request consists of the following items, submitted through www.grantsolutions.gov and
prepared in accordance with the relevant instructions.

a. Standard Form 424, Application for Federal Assistance;

V VI

b. Standard Form 424A, Budget Information – Non-Construction Programs;
c. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information;

VI VII

d. IRS Form 13424-J, Detailed Budget Worksheet and Narrative;
e. Project Abstract, which includes the following information:

VII
VIII

i. Numerical goals;
ii. Changes to the program plan;

APPENDICES

iii. Civil Rights Statement; and
f. Attachments Form (used to attach the following items):
nn Most

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

recent audited financial statement (if the applicant expends $750,000 or more in federal funds
during the applicant’s fiscal year, this must be a single audit or program-specific audit as defined in 2
CFR § 200.501). If the applicant’s most recent audited financial statement is available on the Federal
Audit Clearinghouse found at harvester.census.gov/facweb/ then in lieu of attaching the audit, please
indicate in an attached statement that it is available on the clearinghouse site;*

nn 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;*

nn Applicants

must also provide documentation (e.g., articles of organization or a Form 2848) which
shows that the designated Tax Compliance Officer on Form 13424 is properly authorized to receive tax
information;* and

nn Indirect

cost rate agreement, if applicable.*

* Items marked with an asterisk must be submitted via an attachment. The LITC Program Office provides
training to grantees on how to use www.grantsolutions.gov.

vi. Withdrawing Applications after Submission
LITC grant applications may be withdrawn at any time during the application process or prior to the time grant
money is awarded by notifying the LITC Program Office in writing.
Application withdrawals cannot be completed through grants.gov or grantsolutions.gov. All withdrawals must be
faxed or mailed to the LITC Program Office. See Section VII.F, Contacting the LITC Program Office.

C. SYSTEM FOR AWARD MANAGEMENT (SAM) REGISTRATION
REQUIREMENT AND UNIQUE ENTITY IDENTIFIER
An organization must be registered with SAM to submit a grant application. SAM registration requires
the organization to provide an Employer Identification Number (EIN) from the IRS and a Data Universal
Numbering System (DUNS) number from Dun & Bradstreet, Inc.

i. System for Award Management (SAM.gov)
Register early, as first-time registration with these groups is a multi-step process that can take more
than eight weeks and MUST be completed before the application submission deadline.

SAM is a web-enabled governmentwide application that collects, validates, stores, and disseminates business
information about the federal government’s trading partners in support of the contract award, grant, and
electronic payment processes. SAM registration is necessary to submit a grant application and must be
maintained with current information while an application for funding is pending and during the performance
period of any federal award. To maintain an active registration in the SAM database, an organization must review
and update its information in the SAM database at least once every 365 days. More information about the
registration and renewal process is available at www.sam.gov.

LOW INCOME TAXPAYER CLINIC

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ii. Employer Identification Number (EIN)

III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

An EIN is a type of federal taxpayer identification number and is used to identify a business entity for
employment tax purposes. Applicants that do not have an EIN should submit a Form SS-4, Application for
Employer Identification Number, to the IRS. It can take several weeks for the IRS to assign a number. The fastest
way to get an EIN is online at www.irs.gov/ein. There are also options to apply by fax or by mail.

iii. Data Universal Numbering System (DUNS) Number
Organizations must provide a DUNS number with the grant application. A DUNS number is a nine-digit
unique entity identifier 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 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 or applying
online at fedgov.dnb.com/webform. See 2 CFR Part 25 for more information on the requirement.

Organization Name Change Requests
SAM registration is linked to a nine-digit DUNS number assigned to a specific legal business name at a specific
physical location. Registrants with an existing SAM entity record can update their name as recorded with Dun
& Bradstreet, Inc. by going to the Dun & Bradstreet, Inc. webform. A justification for the name change must
be provided. Updates can take up to two business days to process. The changes will be visible in SAM.gov two
business days after they have been processed. The registrant will then need to review and accept the information
in SAM.gov. More information is available at The Federal Service Desk website, fsd.gov/fsd-gov/home.do.

IV
V

D. SUBMISSION DUE DATES AND TIMES

V VI

i. Due Date for LITC Full Grant Applications and NCC Requests

VI VII

To be considered for 2019 LITC Program grant funding, all grant applications must be submitted by
11:59pm (ET) on June 27, 2018. The time and date of the email confirmation from www.grants.gov
acknowledging application submission serves as evidence that the Full Grant Application was timely submitted,
and should be retained by the applicant. Similarly, the time and date of the email confirmation from
www.grantsolutions.gov acknowledging the submission of the NCC Request serves as evidence that the NCC
Request was timely submitted, and should be retained by the applicant.

VII
VIII
APPENDICES

ii. Incomplete or Late LITC Full Grant Applications and NCC Requests

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

An application is considered incomplete if it fails to include any of the required forms listed in Section IV.B.iii,
Instructions for Full Grant Application Form, Section IV.B.v, Instructions for Completing NCC Request Forms, or if
the applicant fails to complete the forms in accordance with the relevant instructions. Incomplete applications
submitted before the due date will be reviewed and may be considered, depending on the circumstances.
Applications submitted after the due date will not be reviewed or considered absent extraordinary circumstances.

E. BUDGET CONSIDERATIONS AND FUNDING RESTRICTIONS
i. Spending LITC Grant Funds and Matching Funds
Cost Principles of 2 CFR Part 200 (the Uniform Guidance)
Grant funds and matching funds must be used for expenses in accordance with the cost principles guidance in
2 CFR Parts 200 and 1000. Generally, for an expense to be allowable, the expense must:
nnBe

necessary and reasonable for the performance of the federal award and be allocable thereto under the
applicable cost principles. See 2 CFR § 200.403(a);

nnConform

with any limitations or exclusions set forth in the cost principles or in the Notice of Award. See
2 CFR § 200.403(b);

nnBe

consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the grantee. See 2 CFR § 200.403(c);

nnBe

accorded consistent treatment by the grantee. A cost may not be assigned to a federal award as a direct
cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal
award as an indirect cost. See 2 CFR § 200.403(d);

nnBe

determined in accordance with generally accepted accounting principles (GAAP), except, for state
and local governments and Indian tribes only, as otherwise provided for in the cost principles. See
2 CFR § 200.403(e);

nnNot

be included as a cost or used to meet cost-sharing or matching requirements of any other federallyfinanced program in either the current or a prior period. See 2 CFR § 200.403(f ); and

nnBe

adequately documented. See 2 CFR § 200.403(g).

Grantees should refer to 2 CFR Parts 200 and 1000 for detailed rules regarding allowable and unallowable
expenses. Generally, the same rules that apply to expenditures made using federal grant funds apply to
expenditures made using matching funds. However, IRC § 7526(c)(5) specifically prohibits indirect expenses,
“including general overhead of the institution sponsoring the clinic” from being counted as matching funds.

Start-Up Expenses May Be Paid Using LITC Grant Funds
LITC grant funds may be used on start-up activities, and an applicant may be selected to receive an LITC grant
award for the full grant year even if it anticipates that it will not be able to begin operations at the start of the
performance period. All grant recipients must satisfy the statutory matching funds requirement during the period
covered by the grant and must meet all reporting requirements, regardless of when operations begin. Reports
should provide information on the status of the start-up activities. In addition, LITC grants to these applicants
will be conditioned on the performance of required grant activities as detailed in Section I.A, LITC Grant Program
Priorities, during the immediately succeeding grant year; however, grant funds for the immediately succeeding
grant year are not guaranteed to be awarded.

LOW INCOME TAXPAYER CLINIC

APPLICATION AND SUBMISSION PROCESS

Examples of Allowable Expenses

Allowable Expenses

III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

The table below lists examples of common expenditures for an LITC. The left-hand column lists items that are
an allowable use of federal grant funds or matching funds, and the right-hand column lists items that are not
an allowable use of federal grant funds or matching funds. This is not an all-inclusive list. If a grantee has any
questions about whether an expense is allowable, the grantee should contact the assigned Advocacy Analyst for
guidance before incurring the expense.
Unallowable Expenses

Reasonable office supplies and equipment costs necessary to
provide LITC services. See 2 CFR § 200.94.

Expenses incurred that do not support or benefit the LITC
program or which are unnecessary in carrying out LITC
activities. See 2 CFR § 200.403.

Rent, utilities, and custodial services for LITC office space.
See 2 CFR §§ 200.465 and 200.452.

Certain advertising and public relations costs.
See 2 CFR § 200.421.

Non-alcoholic refreshments for educational activities or
community outreach events. See 2 CFR § 200.432.

Alcoholic beverages. See 2 CFR § 200.423.

Refreshments for volunteers, provided the costs are
reasonable. See 2 CFR § 200.432.

Refreshments for employees, unless their workload requires
those employees to work outside the normal hours of clinic
operation. See 2 CFR § 200.445.

Continuing education courses for employees, if such
courses will increase their vocational effectiveness. See
2 CFR § 200.472.

Professional licensing fees for employees or volunteers (e.g.,
bar association fees for the QTE). See 2 CFR § 200.445.

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.
See 2 CFR § 200.456.

Pens, t-shirts, mugs, or other memorabilia to promote its
services to taxpayers or for the personal use of employees.
See 2 CFR §§ 200.421(e)(3) and 200.445.

Printing and publication costs incurred for LITC activities.
See 2 CFR § 200.461.

Lobbyist registration fees. See 2 CFR § 200.75.

A reasonably proportionate share of the cost of audit services.
See 2 CFR § 200.425.

Costs of goods or services for personal use (as opposed to
business use) of LITC staff. See 2 CFR § 200.445.

Publicity and training costs directly associated with the LITC
program. See 2 CFR § 200.421.

Costs incurred outside the performance period of the award,
unless specifically excepted by the LITC Program Office.
See 2 CFR § 200.420.

Installation of telephone lines, including a toll-free line,
necessary to provide LITC services to taxpayers. See
2 CFR § 200.48.

Application fee to become an attorney, CPA, or enrolled
agent. See 2 CFR § 200.445.

Travel performed by program staff to conduct LITC business.
See 2 CFR § 200.474.

Costs determined using an unreasonable method of
allocation. See 2 CFR § 200.405(a)(2).

Costs incurred for two individuals to attend the Annual LITC
Grantee Conference. See 2 CFR § 200.474.

Fundraising costs. See 2 CFR § 200.421.

Interpreter services for hearing-impaired or non-English
speaking taxpayers. See 2 CFR § 459.

Entertainment costs. See 2 CFR § 200.438.

Legal research and reference materials including the IRC and
Treasury Regulations. See 2 CFR § 200.454(b).

Fines and penalties. See 2 CFR § 200.441.

Indirect costs paid with federal funds. See 2 CFR § 200.414.

Any expense that the grantee includes in the indirect cost
pool. See 2 CFR § 200.412.

Purchase, construction, repair, or rehabilitation of any
building or any portion thereof.

Salaries, wages, and fringe benefits for services rendered by
LITC employees. See 2 CFR § 200.430(a) and § 200.431.

V VI
VI VII
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Allowable Expenses

Unallowable Expenses

Attending American Bar Association (ABA) Tax Section meetings.
See 2 CFR § 200.472.
Court costs on behalf of taxpayers if reasonable and necessary.
See 2 CFR § 200.403(a).
Malpractice insurance. See 2 CFR § 200.447.

ii. Direct vs. Indirect Expenses
Direct expenses are necessary and reasonable expenses that support LITC activities, as well as functions of the
organization, should be allocated and charged as a direct cost of award funds if it is practical to separate the
portion of the expense allocable to LITC activities. The determination of whether it is practical or reasonable to
allocate expenses directly in proportion to use depends on several factors, including the size of the organization
operating the LITC, size and number of other functions the organization operates, and the amount of the
expense.
The Uniform Guidance defines indirect costs as:
[T]hose costs incurred for a common or joint purpose benefitting more than one cost
objective, and not readily assignable to the cost objectives specifically benefitted, without effort
disproportionate to the results achieved. (2 CFR § 200.56).
Indirect expenses are often commonly referred to as Facilities and Administration (F&A) costs.
For example, an organization has a $5,000 expense that supports LITC activities and two other programs
the organization operates. Suppose the organization can spend an additional $100 in administrative costs to
accurately allocate the $5,000 among the three programs in proportion to the benefit each receives. In that case,
the allocation is reasonable and the organization should perform the allocation and charge the portion of the
$5,000 that is allocable to LITC activities as a direct cost.
Now suppose the organization has a $5,000 expense that supports LITC activities and two other programs the
organization operates, but to properly allocate the $5,000 among the three programs in proportion to the benefit
each receives, it would cost the organization an additional $2,000 in administrative costs. In that case, direct
allocation of the cost is not cost-effective, and the organization can choose to account for the $5,000 expense as
an indirect cost. The organization then apportions the total indirect costs (i.e., the indirect cost pool) to each of
the benefiting programs using a method that is consistent, reasonable, auditable, and in accordance with generally
accepted business practices.
The Uniform Guidance in section 200.414(b) recognizes that because of the diverse characteristics and accounting
practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as
indirect expenses in all situations. The purpose of the federal award is the determining factor in distinguishing
direct from indirect costs, rather than the nature of the goods and services expensed.

LOW INCOME TAXPAYER CLINIC

APPLICATION AND SUBMISSION PROCESS

and wages of administrative and support staff;

nnRelated

employee benefits;

nnFacility

occupancy costs (e.g., utilities, security, maintenance);

nnOffice
nnLegal

III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

nnSalaries

Typical Indirect Expenses May Include:

supplies; and

and auditing charges.

Once the organization has classified expenses as either direct or indirect, the organization must determine how to
allocate the indirect costs among the programs that they benefit, so that LITC funds do not subsidize the indirect
costs of other programs or functions of the organization. To calculate the amount of federal funds allocable to
indirect costs, the organization may use a negotiated indirect cost rate agreement approved by the organization’s
cognizant agency. If the organization has never obtained a negotiated indirect cost rate, it may elect to apply the
de minimis rate.

Negotiated Indirect Cost Rate Agreements (ICRAs) and Cognizant Agencies

Obtaining an indirect cost rate agreement (ICRA) is a complex process that requires preparing and submitting
an indirect cost rate proposal (including supporting schedules and documentation), and may take several months
or even years to establish a final rate. A cognizant agency for indirect costs means the federal agency responsible
for reviewing, negotiating, and approving cost allocation plans or indirect cost proposals developed under 2 CFR
Part 200 on behalf of all federal agencies. See 2 CFR § 200.19. For Institutes of Higher Education (IHEs), cost
negotiation cognizance is assigned to the Department of Health and Human Services (HHS) or the Department
of Defense’s Office of Naval Research (DOD), normally depending on which of the two agencies provides more
funds to the educational institution for the most recent three years.

For nonprofit organizations, the federal agency that awards the largest dollar value to the organization will be
designated as the cognizant agency for indirect costs. This federal agency will negotiate and approve of the indirect
cost rates (unless different arrangements are agreed to by the federal agencies concerned), and, where necessary,
negotiate and approve other rates such as fringe benefit and computer charge-out rates. See Appendix III of the
Uniform Guidance, Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Institutions
of Higher Education (IHEs), paragraph C.11.

V VI
VI VII
VII
VIII

IRS does not negotiate ICRAs but will accept a negotiated ICRA approved by another federal agency.
Organizations that apply an ICRA to determine the portion of indirect costs allocable to a federal award must
carefully separate direct costs from costs classified as indirect in the ICRA, and the ICRA must set forth cost items
included in the rate. Indirect costs are then calculated by applying the negotiated rate against the direct cost base.
Costs accounted for as indirect costs in the ICRA may not be expensed as direct costs (i.e., double-dipping). For
example, if a clinic is part of a larger organization that has an ICRA and the rental cost of the facility in which
the clinic operates is included in the negotiated rate, then the clinic may not include the facilities cost under the
Contractual expense category.

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

De Minimis Indirect Cost Rate
Under § 200.414(f ) of the Uniform Guidance, a de minimis rate of ten percent of Modified Total Direct Costs
(MTDC) is available for organizations that have never had a negotiated ICRA. This is a simple, straightforward
option for award recipients without substantial experience managing grant funds. An organization that elects to
use the de minimis rate must use the rate for all federal awards it receives, and may use such rate indefinitely, or
may choose to negotiate an ICRA at any time.
If the clinic elects to use the de minimis rate to charge indirect costs on all federal awards, no facilities and
administration costs may be charged as direct costs.

MTDC
MTDC are all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and
up to the first $25,000 of each sub award (regardless of the period of performance of the sub awards under the
award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission,
scholarships and fellowships, participant support costs, and the portion of each sub award in excess of $25,000.
Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs,
and with the approval of the cognizant agency for indirect costs. See 2 CFR § 200.68.

If a clinic charges indirect costs based on an approved indirect cost rate agreement, a copy of the
agreement must be submitted along with Form 13424-J, Detailed Budget Worksheet and Narrative.
See Section IV.B.ii, Completing and Submitting a LITC Full Grant Application on Grants.gov, and IV.B.iv,
Completing and Submitting an NCC Request in Grantsolution.gov

Expenditures to Support Staff and Volunteers
Please note matching funds must be directly allocable to LITC activities and may not include indirect costs.

iii. Meeting the Matching Funds Requirement
Grantees must provide matching funds on a dollar-for-dollar basis for all federal grant funds received. In general,
the Uniform Guidance provides that all contributions, including cash and third-party in-kind, can be accepted as
matching funds when such contributions are:
nnVerifiable
nnNot

from the grantee’s records. See 2 CFR § 200.306(b)(1);

used as a match or contribution for any other federal award. See 2 CFR § 200.306(b)(2);

nnNecessary

and reasonable for accomplishment of LITC Program objectives. See 2 CFR § 200.306(b)(3);

nnAllowable

under the applicable cost principles. See 2 CFR § 200.306(b)(4);

nnNot

paid by the federal government under another award, except when authorized by federal statute. See
2 CFR § 200.306(b)(5);

LOW INCOME TAXPAYER CLINIC

APPLICATION AND SUBMISSION PROCESS

nnIn

for in the grantee’s approved budget. See 2 CFR § 200.306(b)(6); and

nnProvided

conformity with other applicable provisions of the Uniform Guidance. See 2 CFR § 200.306(b)(7).
III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

Qualified matching funds can be derived from multiple sources and in various forms, such as cash, services
provided by volunteers, property, and income from program activities. Grants may be awarded based on good
faith estimates of matching funds, including verifiable pledge commitments or other likely sources of funding.
However, grantees 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 LITC
Program Office requiring the grantee to repay federal funds (plus any applicable interest) received in excess of the
documented match.
Qualified matching funds include
(but are not limited to):

Ineligible matching funds include
(but are not limited to):

Legal Services Corporation funds.

Expenses incurred for the purchase, construction, repair, or
rehabilitation of any building or any portion thereof.

Salaries, including fringe benefits, of clinic staff.

Services provided by students that are not furnished on a
volunteer basis, such as in exchange for academic credit.

Equipment and supplies used in the clinic

Federal work-study funds.

Other costs necessary to the operation of the program.

Funds from other federal grants unless specifically authorized
by statute (See 2 CFR § 200.306(b)(5)).

The value of volunteer services furnished by professional
and technical personnel, consultants, and other skilled and
unskilled labor.

Indirect costs, including general overhead of the institution
sponsoring the LITC.

The fair market value of donated equipment and supplies.
The fair rental value of donated space.

V
V VI
VI VII

If an individual on the LITC staff receives an award or fellowship from a non-federal source (e.g., the ABA
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 LITC activities.

VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Valuing Contributions of Goods and Services to Meet the Matching Funds Requirement
Contributions of goods and services provided to a grantee must be valued in accordance with applicable cost
principles. These principles generally limit values to:
nnThe

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. See 2 CFR § 200.404(b); or

nnFair

market value. See 2 CFR § 200.404(c).

Non-cash contributions (e.g., goods, space, or volunteer services donated to the LITC) from parties other than
the grantee or the federal government (i.e., third-party in-kind contributions) must be valued in accordance with
the principles stated in 2 CFR § 200.306 (except for contributions of certain volunteer services by a qualified
representative which are governed by 2 CFR § 1000.306).

Determining the Value of Volunteer Services
In general, the rates used to value volunteer services must be consistent with those paid for similar work in the
organization and may include a reasonable amount for fringe benefits.
If no one else on staff performs similar work that could provide a basis for comparative valuation, the organization
must use a rate that is consistent with the labor market rate for similar work. One source of wage rates by
geographic area can be found on the Bureau of Labor Statistics (BLS) at www.bls.gov/bls/blswage.htm. However,
note that the BLS data represents a wage rate only and can be adjusted upward by adding a reasonable fringe
benefits amount in determining a volunteer services valuation rate.
If a third-party employer (e.g., a local law firm’s pro bono campaign) 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 reasonable fringe benefits,
provided the services are in the same skill set for which the employee is normally paid. In other words, if a local
law firm offered ten hours of volunteer service from an associate attorney in its tax division to an LITC, the LITC
would be able to value those ten hours at the attorney’s regular rate of pay at the law firm, plus reasonable fringe
benefits, provided the attorney performs ten hours of substantive legal work.

Valuation is Dependent on the Type of Services
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 non-representative capacity. In the previous example, if the attorney spent
ten hours repainting the lobby of the LITC over a weekend instead of performing legal work, the LITC could still
count the volunteer’s time as matching funds, however it would need to value the attorney’s time at the rate for
hiring a painter in the local labor market, plus reasonable fringe benefits.

LOW INCOME TAXPAYER CLINIC

APPLICATION AND SUBMISSION PROCESS

Services Donated by Employees may not be used as Matching Contributions

III PROGRAMIV.
APPLICATION AND SUBMISSION
II I. LITC
DESCRIPTION
II PROCESS
III

An employee of the grantee may not be treated as a volunteer for purposes of valuing in-kind services. For
example, suppose an LITC pays an employee an hourly wage to work at the LITC three days a week, and the
employee chooses to spend an additional two days each week volunteering at the LITC. In the example, the
LITC may charge the employee’s wages as an expenditure of federal or matching funds, but it cannot apply the
value of the two days spent volunteering as a contribution to help meet the matching funds requirement.

Special Rule for Valuing Volunteer Services of a Qualified Representative
When the Treasury Department implemented the cost principles of 2 CFR § 200.306 (see 2 CFR § 1000.306),
Treasury provided that notwithstanding the general rule prescribed in § 200.306(e), LITC grantees may use the
rate found in IRC § 7430 to value volunteer in-kind services if the following conditions are met:
nnGrantee

is funded to provide controversy representation (all grantees now meet this requirement);

nnServices

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;

nnQualified

representative is not a student; and

nnQualified

representative is acting in a representative capacity and is advocating for a taxpayer.

Unless all the above criteria are met, grantees should apply the standard cost principles from 2 CFR § 200.306 as
described above.

IRC § 7430 provides taxpayers a right to an award of costs and fees for services provided by qualified
representatives in suits against the United States when the statutory requirements of section 7430 are satisfied.
The rate at which to value those services is adjusted periodically for inflation. For 2018, the maximum rate is
$200 per hour, as prescribed in Revenue Procedure 2017-58, 2017-45 I.R.B. 489, unless the representative can
establish that a special factor, as described in IRC § 7430(c)(1)(B)(iii), applies.

V
V VI
VI VII

The LITC Program Office encourages applicants with questions about how to value volunteer services
to contact the Program Office for assistance; current grantees should contact their assigned Advocacy
Analyst.

VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

iv. OMB Audit Requirement
A grantee that spends $750,000 or more in total federal awards during a fiscal year is subject to the audit
requirements established by OMB. See 2 CFR § 200.501. Total federal awards received by the organization
include all sources of federal funding, not just the funds received from the IRS in support of the LITC. The IRS
has the right to 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 in federal awards during a fiscal year must provide the IRS with a copy
of the results of an audit performed in compliance with the Uniform Guidance. Grantees subject to the audit
requirement 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.
If an audit is required pursuant to 2 CFR Part 200, it must be organization-wide. The auditor must determine
whether the organization:
nnOffers

financial statements that present fairly its financial position and the results of its operations in
accordance with generally accepted accounting principles;

nnMaintains

internal controls sufficient to provide reasonable assurance that the LITC is complying with
applicable laws and regulations — particularly the laws and regulations that could materially impact the
financial statements; and

nnComplies

with laws and regulations that may have a direct and material effect on its financial statement
amounts and on each major federal program.

A reasonably proportionate share of the costs of an audit performed in compliance with the Uniform Guidance is
an allowable LITC grant expense.
Financial records, supporting documents, statistical records, and all other records pertinent to an award must 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 § 200.333.

Obtaining Grant Payment History 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 (PMS) should visit the PMS website at
www.dpm.psc.gov/grant_recipient/audit_confirmation_procedures.aspx.

LOW INCOME TAXPAYER CLINIC

V. APPLICATION REVIEW
I
II I. LITC
III PROGRAM
IV
DESCRIPTION

A. TECHNICAL EVALUATION OF FULL GRANT APPLICATIONS AND SCORING
CRITERIA
Technical Evaluation
Full Grant Applications that pass the eligibility screening process will then undergo a technical evaluation by
a ranking panel. If the application receives a score of 50 points or more, it will advance to the LITC Program
Office evaluation. Applications receiving a score of 49 or lower will not be reviewed by the LITC Program Office
and will not receive an award.
During the technical evaluation, each Full Grant Application will be reviewed using the criteria listed below
and awarded points based on the information provided in the application. Applicants can receive a maximum
of 100 points. In scoring applications, the IRS will evaluate each program plan based on how it will assist in
accomplishment of the LITC Program goals. Points will be assigned as follows:

V. APPLICATION
II REVIEW
III

Experience (Maximum 13 points)

Experience in operating a low income taxpayer clinic or delivering representation and education services to low
income and ESL taxpayers.
Financial Responsibility (Maximum 11 points)

Quality of grant administration and internal accounting procedures.
Program Performance Plan (Maximum 71 points)

Quality of the program plan offered to assist low income taxpayers and ESL taxpayers. Evaluation criteria include:
nnQualifications,

training, and supervision of the clinic staff, students, and volunteers;
V

nnAmount

of time devoted to the program by clinic staff;
of services to be provided;

for ensuring the confidentiality of taxpayer information;

nnProcedures

for monitoring and evaluating program results;

nnPublicity

VII

nnProcedures

nnComprehensiveness

and outreach plans;
identified within the community for collaboration to achieve outreach to the identified

VIII

nnOrganizations

audience; and

APPENDICES

nnDates

and hours of clinic operation.

Program Coverage (Maximum 5 points)

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Number of low income and ESL taxpayers in geographic area(s), proposed efforts to reach these taxpayers, and the
number of taxpayers to be assisted.

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 score.

Figure 3, Grants Evaluation and Scoring Process

Grants Evaluation and Scoring Process

Technical
Evaluation

100 points
Experience

Financial Responsibility

Program Performance Plan

Program Coverage

B. LITC PROGRAM OFFICE EVALUATION OF FULL GRANT APPLICATIONS AND
NCC REQUESTS, AND SELECTION
i. LITC Program Office Evaluation
Full Grant Applications that earned a score of 50 points or more during the technical evaluation will undergo a
secondary review by the LITC Program Office. This evaluation will be based on the information contained in
the application, as well as the applicant’s performance history in the LITC Program, as applicable. The LITC
Program Office will also review NCC Requests. LITC management officials are subject to recusal if participation
in an evaluation would result in a conflict of interest or the appearance of a conflict of interest.

Review of Full Grant Applications
The LITC Program Office will review all Full Grant Applications that earned a score of 50 points or more during
the technical evaluation. Information contained within the application may be subject to verification. The review
will consider:
nnQuality

of the proposed program;

nnHistory

of performance under LITC grants in prior years, if applicable;

nnSoundness
nnAny

of the proposed budget; and

significant concerns identified during the technical evaluation.

LOW INCOME TAXPAYER CLINIC

APPLICATION REVIEW

Review of NCC Requests

nnTimeliness,

II I. LITC
III PROGRAM
IV
DESCRIPTION

The LITC Program Office will review all NCC Requests, including clinics’ proposed budgets and any anticipated
changes to current program plans. The evaluation will also include a more detailed review of the grantee’s
performance history in the LITC Program. The review will consider:
accuracy, and completeness of Interim and Year-End reports;

nnAny

significant concerns identified by the LITC Program Office and how the grantee addressed those
concerns;

nnWhether

the grantee’s past activities match its program plan;

nnGrantee’s

involvement with other LITCs, community groups, TAS, and the LITC Program Office;

nnWhether

the grantee has a history of not spending all the funds awarded; and

nnHistory

of any failure(s) to de-obligate unspent funds in a timely fashion.

V. APPLICATION
II REVIEW
III

Additional Considerations
The decision of whether to award grant funds will be based on the technical evaluation, LITC Program Office
evaluation, and the following additional considerations:
nnExistence

of other clinics in the applicant’s geographic coverage area assisting the same population of

taxpayers;
nnScope
nnThe

of services that the clinic will provide;

number of low income and ESL taxpayers that will be assisted;
in which assistance will be provided to taxpayers;

nnReasonableness

of funds sought for the quantity and quality of services to be offered;

sources of funding available to the clinic;

nnAnticipated

nnOther

nnLanguages

funding available to the LITC Program; and

noncompliance with federal tax and nontax obligations, or national policy requirements. See
Section III.C.iii, Other Eligibility Requirements, Compliance with Federal Tax and Nontax Requirements.

nnAny

VII

If applications are submitted by more than one clinic sponsored by the same institution or organization, the LITC
Program Office will consider all factors surrounding the operation of the clinics.

VIII

nnProviding
nnTraining

APPENDICES

Academic clinics that carry the additional responsibility of teaching and mentoring students may assist fewer
taxpayers than non-academic clinics, however academic clinics can accomplish LITC Program goals in a variety of
other ways, such as:
technical assistance;

and mentoring other LITCs;
articles about the LITC Program;

GLOSSARY
INDEX

nnPublishing

LOW INCOME TAXPAYER CLINIC

nnCommenting

on proposed Treasury regulations that affect low income or ESL taxpayers; and

nnMonitoring

graduates to determine whether they perform pro bono work on behalf of, or otherwise assist,
low income taxpayers.

Final Funding Decision
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.

ii. Civil Rights Reviews
All Full Grant Applications and NCC Requests undergo a civil rights review by the Civil Rights Unit (CRU) of
the IRS to ensure compliance with civil rights laws. For details about the various civil rights laws applicable to
federal grantees, see Section VI.D.i, General Compliance. To the extent necessary to make a civil rights compliance
determination, CRU may request additional data only to the extent that it is readily available or can be compiled
in a reasonable manner. Examples of such data and information include, but are not limited to:
nnThe

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;

nnThe

population eligible to be assisted by race, color, national origin, age, sex, or disability;

nnData

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 with
limited English proficiency;

nnThe

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;

nnThe

present or proposed membership, by race, color, national origin, sex, age, or disability, in any planning
or advisory body that is an integral part of the program; and

nnData

such as demographic maps of the racial composition of affected neighborhoods or census data.

A CRU staff member will review each Full Grant Application and NCC Request for compliance with civil rights
reporting requirements. Upon completion, CRU will forward a preliminary civil rights determination based
on the information in the Full Grant Application or NCC Request to the LITC Program Office. No LITC
grant funding may be awarded until CRU 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. In addition, a Department
of Treasury grant recipient is required to maintain records, provide information, and afford Treasury access to
records to the extent Treasury finds it necessary to determine whether the recipient is compliant with the Age
Discrimination Act of 1975 and 31 CFR Part 23.

LOW INCOME TAXPAYER CLINIC

APPLICATION REVIEW

The CRU 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:

II I. LITC
III PROGRAM
IV
DESCRIPTION

nnExternal

building accessibility (e.g., accessible entrances, curb cuts, and sufficient parking spaces for persons
with disabilities);

nnInterior

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);

nnNon-discrimination

policies (e.g., Publication 4053, Your Civil Rights are Protected, displayed in service areas,
and the organization’s non-discrimination policy posted and disseminated in marketing);

nnAccommodations

for persons with disabilities (e.g., sign language interpreters and Braille/large print

documents); and
nnAccommodations

for persons with limited English proficiency (e.g., bilingual volunteers, language
interpreters/language line, and community resources).

V. APPLICATION
II REVIEW
III

The results from the selected site reviews are compiled into a report and provided to TAS.

Contacting the Civil Rights Unit
For additional information on civil rights requirements, see Publication 4454, Your Civil Rights are Protected, or
contact the Civil Rights Unit at [email protected].

IV
V
VI
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

VI. AWARD ADMINISTRATION
A. NOTIFICATION OF SELECTION
The LITC Program Office will notify all applicants no later than November 2018 whether they have been selected
to receive a 2019 grant award. If Congress has passed final appropriations legislation for the 2019 fiscal year by
November 2018, notification of selection will include the amount of the award. If Congress has not passed final
appropriations legislation for the 2019 fiscal year by November 2018, notification of selection may not include
the amount of the award. In that case, the Program Office will provide the award amount in a subsequent notice.
After notification of the selection, the Clinic Director and the Qualified Business Administrator of first-time
LITC grant recipients will be asked to participate in a mandatory orientation call. Applicants not selected to
receive an award will be notified through grantsolutions.gov application system. Grantees will also be required to
attend the Annual LITC Grantee Conference. See Section VI.C.ii, Annual LITC Grantee Conference.

B. NOTICE OF AWARD
The LITC Program Office will issue a Notice of Award to each applicant selected to receive funding for the grant
year. In the event the federal government is operating under a Continuing Resolution at the start of the grant
year, the Program Office may issue partial awards until a final appropriation is passed.
The Notice of Award states the amount of funding awarded for the grant year, the grant period, and the terms and
conditions of the award. In addition, the Notice of Award incorporates by reference the requirements specified in
this publication and lists any additional specific conditions of the award, if applicable.
All funding will be based on the availability of annually appropriated funds. If more funds become available
during the grant year, the LITC Program Office may award additional funds to well-performing clinics who are
not receiving maximum funding accompanied by an award amendment stating the revised award amount. The
total award amount may not exceed $100,000.

C. ADMINISTRATIVE REQUIREMENTS
i. Standards for Operating an LITC
This publication provides baseline standards of operation for organizations funded with an LITC grant. The
standards ensure that all LITCs provide consistent and quality service to low income and ESL taxpayers.
LITCs are required to fill the following positions:
Qualified Tax Expert (QTE) is a staff member with sufficient tax law expertise to oversee technical substantive

and procedural tax matters. The QTE must be an attorney, certified public accountant, or enrolled agent who
is currently authorized to practice before the IRS and provides representation on behalf of low income taxpayers
in disputes with the IRS. The QTE is also responsible for reviewing all educational materials for accuracy before
distribution.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Qualified Business Administrator (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 internal controls, grant
funds management, budgeting, procurement, or the equivalent.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Clinic Director is a 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 may sign 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
(LTA) Office.

Staff Member Must Be Able to Represent Taxpayers
LITCs must have at least one staff member (usually the QTE) who represents taxpayers before the IRS and who
is authorized to do so. In addition, all LITCs 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.

VI. AWARD
II ADMINISTRATION
III
IV

Maintaining a Physical Location
LITCs must maintain a bona fide physical place of business and a permanent address. A bona fide physical place
of business 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. Applicants with only a virtual office will not be
awarded LITC grant funds.

Providing a Toll-Free Number

To increase access to low-cost representation, grantees should provide a toll-free telephone number. Grant funds
may be used to pay for a toll-free number.

Training Staff and Volunteers

VII

LITCs must provide training to clinic staff, volunteers, and other program participants to increase knowledge and
skills necessary to effectively deliver representation, education, and advocacy services. In addition to substantive
legal training, clinics should provide staff training regarding grant requirements such as determining the amount
in controversy and the 90/250 income requirement.

VIII
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

APPENDICES

Clinics are encouraged to develop a training plan for all staff. The Clinic Director is required to ensure that the
LITC staff, volunteers, and other program participants receive appropriate training to enhance knowledge and
skills. Clinic staff and volunteers are encouraged to attend continuing professional education programs sponsored
by the IRS and professional organizations. The clinic should track all activities including topics presented and the
number of CLE or Continuing Professional Education (CPE) credits available (where the clinic is the sponsor).
Grantees may use grant funds to attend such programs if the subject matter is necessary for the performance of the
grant and the cost is reasonable.

Maintaining Physical Access to Tax Research Materials
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. Access
to research materials may also be through on-line resources. Grantees may use grant funds to acquire tax research
materials.

ii. Annual LITC Grantee Conference
Applicants notified they have been selected to receive a 2019 grant award must attend the Annual LITC Grantee
Conference in December 2018, held in Washington, D.C., location may change due to conference space
availability. The Clinic Director and the QTE are required to attend the conference in its entirety unless the
Director of the LITC Program has excused them from attending all or part of the conference. You will be notified
of the date of the conference via electronic communication through the grant system.

Cost of Attendance
The cost of attending the conference (e.g., transportation, hotel, meals) can be paid with grant funds (or can
qualify as matching funds if travel expenses are paid using non-federal funds) and should be included in an
applicant’s budget. For more information, see Section IV.E.i, Spending LITC Grant Funds and Matching Funds.
Please note that LITC grant funds or matching funds may not be used to pay the cost of more than two attendees.

More than Two Conference Attendees
If a grantee wishes to send more than two staff members to the conference, the grantee must submit a written
request to the Director of the LITC Program no later than two weeks in advance of the conference. The Program
Office will grant approval to timely submitted requests for additional registrants, if space is available. There is no
charge for attending the conference, however, LITC grant funds and matching funds may only be used to pay for
travel expenses related to the attendance of two staff members. Any additional expenses related to the travel of
additional attendees are the responsibility of the grantee and must be paid using non-federal funds. Please note
that the best method for ensuring timely communication with the Program Office is through email or e-fax. Mail
may go through additional screening and therefore, additional time should be allowed to ensure it is received and
processed before the start of the conference, see Section VII.F, Contacting the LITC Program Office.

Requesting to Be Excused from Attendance
A request by the Clinic Director or QTE to be excused from attending all or part of the conference must be
submitted in writing to the clinic’s assigned Advocacy Analyst for review by the Director of the LITC Program
and must be postmarked, emailed, or e-faxed no later than two weeks prior to the start of conference. As noted
above, email or e-fax is the best way of ensuring timely receipt of your request. The request should identify the
critical reason for the exception request, and the name, title, and duties of any other person who will attend the
conference on behalf of the grantee. Instructions for submitting requests can also be found on the LITC Toolkit
under LITC Grantee Conference Information, Conference Attendance Requirements (site accessible only by
grantees).

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

iii. Developing a Community Outreach Plan

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

LITCs should develop an outreach plan to publicize the clinic and its services to low income and ESL taxpayers.
LITCs should also advertise and promote themselves as providing representation and education on behalf of
low income and ESL taxpayers. Outreach activities may involve direct communication with taxpayers or be
accomplished through contacts with other organizations or groups that assist low income and ESL taxpayers.
LITCs are encouraged to identify particular linguistic populations, geographic service areas, or other segments of
the low income taxpayer community in which to focus outreach efforts.

Publicizing LITC Services
LITCs may use a variety of means to publicize their services, including brochures, flyers, placards and posters,
newspaper listings, public service announcements on radio and television, internet websites, and social media. To
reach ESL taxpayers, LITCs should produce publicity materials not only in English, but also in other languages
commonly spoken by taxpayers in their geographic area.

VI. AWARD
II ADMINISTRATION
III
IV

Grantees are encouraged to publicize their program through their organization’s website, through social
networking sites, and community partners.

Publicity materials and announcements to advertise LITC services must focus on core services:
nnRepresentation
nnProvide

in controversy cases;

consultation about a tax matter;

nnEducation

efforts to resolve systemic tax issues that affect low income and ESL taxpayers.

nnAdvocacy

about taxpayer rights and responsibilities; and

VII

nnIf

Publicity materials may not advertise tax return preparation services or Individual Taxpayer Identification Number
(ITIN) application preparation assistance. LITCs are permitted to prepare returns and ITIN applications only in
two limited contexts:
necessary to resolve a controversy; or

nnAncillary

to ESL education, as discussed in Section VI.C.xiv, Preparing Tax Returns and ITIN Applications.
VIII
APPENDICES

LITCs must include a message in all publicity materials, announcements, and their website stating that
the clinic does not generally provide tax return preparation.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Brochures, flyers, or other clinic information distributed in IRS offices must contain language to indicate the
following two key principles:
nnAlthough

the grantee receives funding from the IRS, the clinic, its employees, and volunteers are not
affiliated with or endorsed by the IRS or its employees; and

nnA

taxpayer’s decision to obtain representation from an LITC will not result in the IRS giving preferential
treatment in handling the dispute or problem, and 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, grantees
may not use the IRS, TAS, or LITC Program Office 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,
accountants, or firms 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).
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 specific LITC. Local IRS
offices can, however, provide taxpayers with information about all the LITCs in that geographic area, direct the
taxpayer to the interactive map on www.irs.gov and can provide taxpayers with a copy of Publication 4134, Low
Income Taxpayer Clinic List.

Identifying Effective Outreach Strategies
To enhance efficiency and identify effective strategies, LITCs should implement a process that tracks how
taxpayers seeking services learned about the clinic and the services offered. For example, this information could
be obtained on the intake or screening form completed by low income taxpayers seeking representation or advice.
For educational activities, the clinic could request that attendees indicate on a sign-in sheet how they learned
about the event.

iv. Building Community Partnerships
LITCs should develop and maintain relationships with other community-based organizations that assist low
income and ESL individuals. Community-based organizations might include local social service agencies such as
human services, workforce development, or refugee resettlement, community action programs providing heating
assistance or head start programing, schools, community colleges, religious organizations, domestic violence
shelters, and senior meal sites.
Effective community partnerships help LITCs to enhance visibility in the community, access taxpayers in insular
hard-to-reach communities, better understand nontax issues that affect low income individuals and families, and
establish a framework for mutual referrals of taxpayers in need of services.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

v. Networking with Other LITCs

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

LITCs are encouraged to maintain an active 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 share training on tax practice and procedure. Clinics are encouraged to submit best
practices developed through networking to the LITC Program Office so they can be shared with other clinics to
improve the overall quality of the LITC Program.

vi. Mentoring
The LITC Program encourages experienced grantees to become mentors that can provide guidance and technical
assistance to other LITCs. The LITC Program Office may ask experienced LITCs to informally assist less
experienced clinics by providing them with assistance. That assistance may include: recommendations for
developing processes, procedures, or policies, providing samples of substantive education materials for clinical staff
or taxpayers, and providing suggestions or other feedback on casework.

VI. AWARD
II ADMINISTRATION
III
IV

vii. Technical Assistance Consultation
A technical assistance consultation is a discussion with a tax practitioner or other service provider designed
to provide brief advice about a federal tax issue. This assistance could be provided to an LITC clinician from
another program, a member of the private bar, or colleague, or a local VITA site member. If advice is given to a
member of the clinician’s sponsoring or co-located organization to provide to a client about a specific tax issue, it
is more properly counted as a consultation. Grantees must report the number of technical assistance consultations
provided on Form 13424-A, LITC General Information Report.

viii. Maintaining Client Confidentiality

Avoiding Unauthorized Disclosure

Tax professionals have ethical requirements to maintain client confidentiality. See, for example, ABA Model Rule
of Professional Responsibility 1.6 and IRC § 7525.

VII

LITC employees and volunteers generally must not disclose information relating to the representation of a client
to third parties unless the client gives informed consent. The confidential nature of each taxpayer’s information
must always be respected, and each employee and volunteer must safeguard taxpayer information against
inadvertent or unauthorized disclosure. Thus, it is critical for an LITC to maintain information security and limit
access to taxpayer information to those who have a need to know.

VIII
APPENDICES

Treasury Regulations under IRC § 7216 define “tax return preparer” broadly and generally prohibit a grantee, its
employees, and its 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 26 CFR § 301.7216-2.

GLOSSARY
INDEX

The regulations authorize disclosure or use without consent only in very limited situations, such as pursuant to
an order of a court or a federal or state agency, or 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,

LOW INCOME TAXPAYER CLINIC

or both, plus the costs of prosecution. In addition, IRC § 6713 imposes a civil penalty of $250 for each disclosure
or use, up to $10,000 per calendar year.

Client Information Must Be Redacted from Training Materials
Client information must be redacted 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.

Sharing Information with the Media
Generally, confidentiality requirements and disclosure restrictions prohibit clinic personnel from providing details
about any taxpayer represented by the clinic in response to requests from the media. News reporters and other
members of the media do not have a need to know taxpayer information. The LITC must obtain a written waiver
from the taxpayer before disclosing any of the taxpayer’s information, and be sure the taxpayer fully understands
the potential ramifications that could result from disclosing the information, even if the taxpayer is the person
requesting that the LITC speak to a member of the media. If the client chooses to share information with the
media, suggest to the client that he or she make it a condition of the interview that the story be produced without
photos and names.
Media coverage can create a conflicting interest between the LITC and a client. An article that describes the
client’s situation and mentions the clinic’s service may benefit the clinic by providing outreach; however, the clinic
must consider any potential negative repercussions that publicity may have on the taxpayer. For example, the
taxpayer could be dealing with other nontax issues (e.g., custody or support battles, other creditors, immigration)
that could be negatively impacted by the media coverage. LITCs should clearly communicate that clients are
under no obligation to share any personal information with the media.

ix. Recruiting and Supervising Volunteers
Creating Written Position Descriptions for Volunteers
LITCs are encouraged to create written position descriptions for volunteers and outline the qualifications for each
position, such as whether the volunteer can act as an authorized representative, training, educational background,
language skills, and other qualifications relevant to providing representation, education, and advocacy on behalf of
low income and ESL taxpayers.

Establishing and Maintaining a Pro Bono Panel
LITCs are encouraged to offer additional taxpayer assistance by recruiting qualified representatives to serve on a
pro bono panel and who agree to accept cases from the LITC and agree to represent the LITC client at no cost.
Alternatively, they may utilize volunteers made available through national, state, or local, bar associations; society
of accountants; and enrolled agents networks.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Monitoring Referrals to LITC Volunteers

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

LITCs must have a system to monitor referrals and ensure that the pro bono representative is handling the case
properly and the services are indeed being provided for free (unless the case is referred to another LITC). Pro bono
representatives may not charge any fees for services (other than asking for reimbursement of expenses such as
photocopying and court filing fees).

Referrals May Only Be Made to Qualified Representatives
LITCs may only refer cases to pro bono volunteers for representation if the volunteer is authorized to practice
before the IRS or the applicable court where the IRS controversy will be adjudicated.

Referrals after Declining a Case

VI. AWARD
II ADMINISTRATION
III
IV

Generally, no person associated with the LITC should provide representation in a case the clinic declined to
accept. Additionally, employees and volunteers of the LITC may not provide representation for a fee to a client
of the LITC in a subsequent, separate tax matter. For example, suppose an LITC agrees to refer a taxpayer in
a controversy with the IRS to a member of the LITC’s pro bono panel. On behalf of the LITC, the pro bono
representative resolves the dispute. The same taxpayer owns a partnership interest in a family business that
is under audit by the IRS and offers to pay the representative to represent the partnership, as the taxpayer
understands the LITC can’t handle tax matters for entities. The pro bono attorney must decline the case. The
LITC representative cannot refer the taxpayer to someone else who charges a fee to represent the partnership;
instead, the LITC may refer the taxpayer to an organization that provides pro bono assistance, and may close the
case and stop monitoring activities.

x. Recordkeeping and File Management

Maintaining Records of Grant Expenditures

nnWhen

individuals have approval authority;

written approval is required; and
VIII

nnWhat

VII

nnWhich

LITCs must maintain adequate internal controls and retain financial accounting records to safeguard all funds,
property, and other assets related to the grant. LITCs must have written procedures for approving expenditures
from grant funds in accordance with the applicable procurement, payment, and cost principles in the Uniform
Guidance. At a minimum, the procedures should address:

documentation must be submitted for an expense to be approved by the authorized official.

APPENDICES

The approval process may differ based on size and type of expense. Also, LITCs must have written procedures to
track their fixed assets and tangible personal property.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

To avoid subsequent disallowance or dispute based on unreasonableness or non-allocability, the grantee may
seek the prior written approval from the LITC Program Office in advance of incurring special or unusual costs.
Prior written approval should include the timeframe or scope of the proposed cost. The absence of prior written
approval on any element of cost will not, in itself, affect the reasonableness or allocability of that element, unless
prior approval is specifically referenced under 2 CFR § 200.407, such as purchases of $5,000 or more described

in 2 CFR § 200.439(b)(2). Copies of any pre-approvals should be retained for three years from the date of
purchase. Purchases in the amount of $5,000 or more should be noted in the clinic’s financial narrative in the
year purchased.

Maintaining Sufficient Detail in Client Records
LITCs must maintain client case records to be able to demonstrate client eligibility for program services and to
document the services provided to taxpayers.
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(a). Thus, a clinic should keep detailed contemporaneous case records of its
controversy work so that if case work presents an opportunity to make a claim for attorneys’ fees, the clinic has
adequate records to support an award. Awards of attorneys’ fees are program income and are eligible as matching
funds if spent supporting LITC activities.
For each increment of time for which fees are claimed, the records must:
nnIdentify

the date on which the services were performed;

nnDescribe

the nature of those services in detail;

nnIdentify

the individual’s name and position of any representative for whom fees are claimed (e.g., supervisory
attorney, student, or paralegal); and

nnInclude

the associated incremental periods of time spent by that individual.

The services provided by the grantee should be described in sufficient detail to enable the IRS to assess the
reasonableness of the amount of time expended in relation to the service performed and to identify duplicated
efforts, if any, by multiple clinic personnel. Case records should include classifications to describe the nature of
the services provided. Suggested classifications include:
nnInitial

client interview;

nnResearch

(identifying the issue);

nnPreparing

pleadings or other court documents;

nnPreparing

letters (identifying the recipient and subject matter);

nnInvestigation
nnAnalysis

of underlying facts (briefly describing the subject matter and information);

of taxpayer or third-party records (identifying the records);

nnConsultation

with tax return preparer (identifying the preparer);

nnConsultation

or interview of third-party (identifying the person); or

nnTelephone

conversations (identifying with whom the conversation was held and the subject matter).

When a claim for attorneys’ fees is submitted, the IRS makes an initial determination as to whether client records
are sufficiently detailed, based on the facts and circumstances of each case. For additional guidance on the
recovery of attorneys’ fees, see Rev. Proc. 2016-17, 2016-11 I.R.B. 436.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Using a Professional Case Management System

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Grantees are expected to use a case management system to assist with client eligibility screening, help monitor
the status of ongoing cases, input case notes, maintain accurate timekeeping records, track controversy outcomes,
track issues worked, track where cases are worked, and record educational and outreach activities for Interim
and Year-End reports. The information provided by LITC programs are annually reported to Congress in
Publication 5066, LITC Program Report, and may be included in the National Taxpayer Advocate’s Annual Report
to Congress. The data can help identify trends or systemic issues. It is critical the information is complete
and accurate. As case management software supports program activities, purchase of this type of software is an
allowable cost under the LITC grant.

Backing Up Electronic Files Offsite

VI. AWARD
II ADMINISTRATION
III
IV

LITCs should have an offsite back-up file system in place for information stored electronically to enable
resumption of business in the event of a disaster or other work stoppage. Using grant funds to develop a back-up
file system supports program activities and is an allowable cost under the LITC grant. For additional suggestions
on risk management, see www.irs.gov/businesses/small-businesses-self-employed/preparing-for-a-disastertaxpayers-and-businesses and www.ready.gov/business.

Keeping Client Records in a Secure Location
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. In addition, LITCs must have procedures in place to respond to a breach of client information,
and must notify the LITC Program Office by contacting the Advocacy Analyst in the event of a breach. The
notification should be both in writing and by telephone and take place as soon as is practicable, but not later than
two business days from the time of discovery.

V
VI

New Guidance Regarding Data Breaches

VII

The notification regarding a data breach should be both in writing and by telephone and take place as
soon as is practicable, but not later than two business days from the time of discovery.

VIII
APPENDICES

Retain Records That Document Compliance
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 for exceptions.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Retention policies for client records must comply with all applicable IRS, federal, and state record retention
requirements. State bars and other professional licensing organizations may impose additional recordkeeping
requirements for case files.

Asking for Client Suggestions
LITCs should seek comments from clients about the services received and ask for suggestions about how service
might be improved. Many clinics routinely send out surveys at the conclusion of a case. It is important that
when seeking suggestions, it is regularly compiled, reviewed, and considered as program policy, procedure
and services are assessed and changes are instituted. Comments that do not share any personally identifiable
information can also be helpful in grant applications and reports.

xi. Representing Low Income Taxpayers
Qualified representatives, as defined in Section I.D, Key Terms and Definitions must represent low income
taxpayers in controversies with the IRS. LITC grant funds must be used to support that representation. LITC
grant funds may also be used to support representation in controversies with state or local tax authorities if the
LITC is representing the taxpayer in a related IRS controversy.

Intake
An intake or application helps to collect information from a taxpayer to determine whether the taxpayer meets
income eligibility, the amount in controversy limit, and helps gather information about the nature of the tax
problem. LITCs must record the taxpayer’s income information on an intake form, which can be paper or
electronic. LITCs must solicit income information from taxpayers seeking assistance in a manner that promotes
the development of trust between a qualified representative and client. If there is substantial reason to doubt the
accuracy of the financial eligibility information provided by a potential client, the LITC must make appropriate
inquiry to verify the information, in a manner consistent with the attorney-client relationship.
If a taxpayer does not meet the LITC’s eligibility requirements, an LITC may not refer the taxpayer to a
representative who charges a fee; instead, an LITC should provide information to the taxpayer about a state or
local bar association, society of accountants or enrolled agents, or other tax professional organization that provides
pro bono assistance. If the professional organization thereafter refers the taxpayer to a representative who charges a
fee, the LITC has still made an appropriate referral.

Assisting Taxpayers Through Consultations
Many of the interactions a clinic will have with a taxpayer seeking assistance will be in the form of a consultation.
A consultation is 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. For purposes of the Interim and Year-End reporting,
consultations are counted and reported separately from controversy cases. For additional information on
reporting consultations, see Form 13424-A, Low Income Taxpayer Clinic (LITC) General Information Report, and
for additional guidance on distinguishing consultations from cases for reporting purposes, see Form 13424-K,
Low Income Taxpayer Clinic (LITC) Case Information Report.

Use an Engagement Letter When Opening a New Case
When an LITC representative makes the determination to open a case after speaking with a new client and
reviewing the information provided on the intake form, representatives are strongly encouraged to document it
using an engagement letter or retainer agreement, signed by the representative and the taxpayer. An engagement

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

letter or retainer agreement defines the specific matters for which the LITC will provide representation and
protects both the representative and the taxpayer by informing both parties as to the agreement of assigned
responsibilities over the course of the professional relationship. Clearly defining the scope of the representation
protects both the representative and the taxpayer from potential misunderstandings about what assistance the
representative will and will not provide, particularly if the taxpayer has additional legal issues unrelated to the tax
controversy. Written copies of the engagement letter or retainer agreement signed by both the representative and
the taxpayer should be retained by the LITC and a copy should be retained by the taxpayer.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

LITCs must respect the attorney-client (or tax practitioner-client) relationship that is formed when an LITC
agrees to provide representation. A representative must provide competent representation to a client, act with
diligence and promptness regarding a client’s legal concerns, and keep a client informed of the proceedings in
his or her case. A representative who fails to fulfill these duties may be subject to punitive actions from the
organization responsible for issuing the representative’s license to practice.

Low Income Taxpayers and the 90/250 Rule
VI. AWARD
II ADMINISTRATION
III
IV

IRC § 7526(b)(1)(B)(i) requires at least 90 percent of taxpayers represented by an LITC must have incomes that
do not exceed 250 percent of the poverty level according to criteria established by the Director of the Office
of Management and Budget (OMB) (as defined below). The Director of OMB has not established a poverty
level or criteria. The Department of Health and Human Services (HHS) publishes annual Federal Poverty
Guidelines based on family unit size and geographic location, which are applicable to the LITC Program. See,
e.g., 83 Fed. Reg. 2642-44 (Jan. 18, 2018). The determination of whether a taxpayer is low income is made at the
time the LITC agrees to represent the taxpayer. Subsequent changes in income after the LITC has been retained
to represent the taxpayer are not taken into account.

The 90/250 requirement applies only to taxpayers represented in controversy cases and does not
apply to consultations or other LITC activities.

VI
VII

LITC Income Guidelines

VIII

The LITC Program Office updates the income guidelines for the LITC Program annually. The guidelines are
updated in accordance with HHS’s annual publication of Federal Poverty Guidelines.

APPENDICES

Grantees must adopt new income guidelines within 30 days of the date of publication of the HHS
Federal Poverty Guidelines in the Federal Register (generally in late January).

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Based on the Federal Poverty Guidelines published at 83 Fed. Reg. 2642-44 on January 18, 2018, the current
LITC income guidelines for controversy representation are as follows:
LITC Income Guidelines
(250 percent of Federal Poverty Guidelines)
Size of Family Unit

48 Contiguous States
and D.C.

Alaska

Hawaii

$ 30,350

$ 37,950

$ 34,900

$ 41,150

$ 51,450

$ 47,325

$ 51,950

$ 64,950

$ 59,750

$ 62,750

$ 78,450

$ 72,175

$ 73,550

$ 91,950

$ 84,600

$ 84,350

$ 105,450

$ 97,025

$ 95,150

$ 118,950

$ 109,450

$ 105,950

$ 132,450

$ 121,875

For each additional person, add

$ 10,800

$ 13,500

$ 12,425

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 www.census.
gov/topics/income-poverty/income/about.html for a more detailed discussion of items classified as income.
Income includes total annual cash receipts before taxes, subject to the exceptions provided below. For example,
income includes:
nnGross
nnNet

salaries before payroll deductions;

earnings from self-employment (gross receipts less business expenses);

nnAlimony;
nnChild

support;

nnFederally
nnSocial

funded and other public assistance;

security;

nnPensions

and retirement income;

nnUnemployment
nnWorkers

benefits;

compensation;

nnRents;
nnRoyalties;
nnScholarships;
nnDividends;

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

nnNet

nnInterest;

gambling winnings; and
benefits or annuity payments.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

nnSurvivor

Income does not include:
nnProceeds

received from the sale of property (e.g., stocks, bonds, a house, a car);

nnWithdrawals
nnTax

from a bank account;

refunds;

nnGifts;
nnLoans;
nnLump

sum inheritances;

nnInsurance
nnNoncash

payments; or

benefits (e.g., employer-paid or union-paid portion(s) of employee fringe benefits).
VI. AWARD
II ADMINISTRATION
III
IV

Determining Annual Income
LITCs should generally determine program eligibility based on the taxpayer’s annual income, at the time the
taxpayer is seeking services. In the case of seasonal workers or taxpayers whose financial situation has recently
changed, the clinic may use a reasonable method to estimate the taxpayer’s 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 calculate the 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.

VII
VIII

Apply the 90/250 Requirement Only to New Cases Opened

APPENDICES

The 90/250 requirement applies only to taxpayers who the LITC has agreed to represent in controversy cases and
does not apply to consultations or other LITC activities. If the LITC agrees to represent the taxpayer and takes
steps to begin resolving the controversy, including developing a plan for advocacy, the case is included in the total
number of cases for purposes of meeting the 90/250 requirement. The case is counted in the total number of
cases even if the taxpayer discontinues the relationship before advocacy occurs.

GLOSSARY
INDEX

LITCs apply the 90/250 requirement to the cases opened during the reporting period. Cases carried over from a
prior grant year are not included in the calculation to determine compliance with the 90/250 requirement.

LOW INCOME TAXPAYER CLINIC

LITCs apply the 90/250 requirement by comparing the number of cases opened during the reporting period for
a taxpayer whose income does not exceed 250 percent of the Federal Poverty Guidelines to the total number of
cases opened during the reporting period. At least ninety percent of the cases opened during a reporting period
must be for the purpose of providing representation to taxpayers whose incomes do not exceed 250 percent of the
Federal Poverty Guidelines.

Apply the 90/250 Requirement to the Number of Cases Opened
Spouses represented with respect to a joint liability (i.e., arising from a married-filing-jointly return) are treated as
a single case for purposes of applying the 90/250 requirement. An LITC satisfies the 90/250 requirement if no
more than ten percent of the taxpayers represented had incomes that exceed 250 percent of the applicable Federal
Poverty Guidelines, based on the taxpayer’s family unit size and location.
Example: Satisfying the 90/250 Requirement
During the reporting period, the LITC opened 120 new representation cases and provided 92 consultations
to taxpayers which did not develop into a case (i.e., no representation agreement). The 90/250 requirement
applies only to the 120 representation cases and does not apply to the 92 interactions with taxpayers that
were mere consultations. Thus, at least 108 of the 120 cases (90 percent) represented must have taxpayers
whose incomes which do not exceed 250 percent of the applicable Federal Poverty Guidelines, based on the
taxpayer’s location and family size.

LITCs have discretion to choose when to represent a taxpayer whose income exceeds 250 percent of the applicable
Federal Poverty Guidelines, based on the taxpayer’s family unit size and location, provided that the number of
such cases is no more than ten percent of the new cases opened during the reporting period. The grantee must
disclose the number of such cases on its Interim and Year-End reports on Form 13424-K, Low Income Taxpayer
Clinic (LITC) Case Information Report. The criteria used to select cases where the taxpayer’s income is in excess
of 250 percent of the applicable Federal Poverty Guidelines should be reasonable and consistent, and support the
overall goals of the LITC Program; to provide representation, education, and advocacy to low income and ESL
taxpayers.

Definition of Family Unit
For purposes of the 90/250 requirement, 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, civil union, or adoption who
live together. However, if related individuals live together, but the person seeking assistance from the LITC is
financially independent, then that person may be treated as a family unit, distinct from relatives in the household.
If two unrelated individuals live together, they constitute two family units.
Subject to the general rules outlined above, LITCs 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. Clinics should exercise such discretion
in a manner that is reasonable and consistent. Income of any person included in a family unit must be included
in the computation of the taxpayer’s income for purposes of applying the 90/250 requirement.

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Example: Determining the Size of a Family Unit
A husband and wife come to the LITC seeking representation in a controversy with the IRS. The couple
cares for two foster children who can be claimed as their dependents. The clinic may determine whether 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 income for purposes of applying the 90/250
requirement. If the foster children are treated as a separate family unit, the support payments would be
excluded from the taxpayers’ income computation.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Changes in a Taxpayer’s Financial Status
The determination of a taxpayer’s income for purpose of applying the 90/250 requirement is made at the time
the clinic agrees to represent the taxpayer. A change in a taxpayer’s financial status during representation does not
disqualify the taxpayer from continuing to receive clinic representation.

Amount in Controversy Limit
VI. AWARD
II ADMINISTRATION
III
IV

The amount in controversy for any tax year generally should not exceed the amount specified in IRC § 7463
(currently $50,000). Thus, while most cases accepted by an LITC should involve amounts in controversy that do
not exceed $50,000 in any given tax year, LITCs may occasionally accept a case where the amount in controversy
for a tax year exceeds the amount specified in IRC § 7463.
The amount in controversy is the amount at issue in the dispute, whether the taxpayer is disputing that he or
she owes the amount (e.g., challenging the validity of the underlying liability, seeking a refund), or whether the
taxpayer acknowledges owing the amount and is merely trying to find a way to pay the amount in full or in part
(e.g., seeking a collection alternative). In other words, the amount in controversy is the amount of the tax liability
for which the taxpayer is seeking assistance.

V
VI

If the taxpayer is challenging the IRS’s actions (e.g., alleging that the IRS’s collection action was unauthorized (see
IRC § 7433)), but is not disputing the amount owed, the amount in controversy is the amount which gave rise to
the IRS’s actions which the taxpayer is challenging.

VII

Example 1: Calculation of the Amount in Controversy – Lien Withdrawal
The IRS filed a Notice of Federal Tax Lien under section 6323 when Taxpayer A failed to pay a liability
for Tax Year 1. Taxpayer A engages an LITC to represent him in obtaining a lien withdrawal under
section 6323(j). The withdrawal will remove the Notice of Federal Tax Lien filing from the public record.
At the time, the LITC agrees to provide the representation, Taxpayer A owes $35,000 for Tax Year 1. Even
though Taxpayer A is requesting the IRS take a particular action and is not challenging the amount due, the
$35,000 balance due is the amount in controversy because it is the amount associated with the IRS action for
Tax Year 1 that Taxpayer A is challenging.

VIII
APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

The amount reflected in a statutory notice of deficiency (see IRC § 6212) or a notice of determination (see
IRC § 6320 and IRC § 6330) does not always reflect the amount in controversy for purposes of LITC eligibility.
For example, the taxpayer may receive a notice of deficiency for $60,000, consisting of tax liability attributable
to three different tax issues. If the taxpayer does not dispute one of the issues, the amount in dispute may be less
than the $60,000 reflected in the notice of deficiency.

Example 2: Calculation of the Amount in Controversy – Notice of Deficiency
Taxpayer B receives a Notice of Deficiency showing additional tax due for Tax Year 1 of $49,000 and
penalties of $3,000 associated with the Tax Year 1 tax due. Taxpayer B disputes the entire penalty amount,
but only $42,000 of the $49,000 tax due reflected in the Notice of Deficiency. The amount in controversy is
$45,000 ($42,000 + $3,000).

Interest on the Amount in Controversy
Interest may be included in the calculation of the amount in controversy, depending on the nature of the
controversy. For example, if the taxpayer disputes the validity of a tax liability and related penalties, the interest
calculation is a percentage of the amount of the liability and will be established once the controversy is resolved
administratively or in litigation. In that case, the LITC should exclude potential interest from the calculation of
the amount in controversy.
Where the taxpayer is seeking collection alternatives and not challenging the amount due, the amount in
controversy will properly include tax, penalties, and interest.
Example 3: Calculation of the Amount in Controversy – Interest
Taxpayer C files a request for interest abatement under section 6404 for $12,000 in interest that had accrued
with respect to tax due in Tax Year 1. The tax liability has already been resolved. Only the interest is in
dispute and is therefore included in the amount in controversy. The amount in controversy is $12,000.
Example 4: Calculation of the Amount in Controversy – Notice of Determination Under IRC § 6330
Taxpayer D receives a notice of determination under section 6330 concerning a proposed levy action. 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. Each of the liability amounts represents tax, penalties, and interest.
Although Taxpayer D is disputing the entire $90,000 liability ($40,000 + $30,000 + $20,000), each tax
year is reviewed separately to determine the relevant amount in controversy. 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 5: Calculation of the Amount in Controversy – Balance Due
Taxpayer E receives a bill (a notice and demand under section 6303) from the IRS for $55,000 due for Tax
Year 1. The amount due is composed of $40,000 tax, $6,000 penalties, and $9,000 interest. Taxpayer D
engages an LITC to represent him in submitting an offer-in-compromise under section 7122 in the amount
of $4,000. The amount of the offer is not taken into account in determining the amount in controversy.
Taxpayer D is trying to resolve the balance due, which includes interest. Therefore, the amount in
controversy is $55,000.

In the refund context, the taxpayer is seeking to collect an overpayment; the amount of interest to which the
taxpayer may be entitled under IRC § 6611 will be established once the controversy is resolved administratively
or in litigation so interest is not included in the amount in controversy. The amount of interest is not being
independently disputed and the LITC should exclude potential interest from the calculation of the amount in
controversy. In contrast, if the controversy involves a claim for refund of interest already paid, or the taxpayer
disputes the amount of interest independently from the associated tax liability (e.g., a claim for interest abatement

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

or interest suspension under IRC § 6404), then the LITC should include potential interest in the calculation of
the amount in controversy.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Example 6: Calculation of the Amount in Controversy – Refund Suit
Taxpayer F filed a timely refund claim for Tax Year 1 for $12,000, plus any overpayment interest allowable
under section 6611. The IRS disallowed the refund claim. Taxpayer F engages an LITC to represent him in
a refund suit in a United States district court. The interest is not independently disputed, as the amount of
interest will be determined solely by the disposition of the taxpayer’s refund claim. Therefore, interest is not
included in the amount in controversy of $12,000.

In a case involving collection or transferee liability where the payment of the balance due, including accrued
interest is in dispute, the LITC should include interest paid in the calculation of the amount in controversy. If
the dispute includes multiple quarters for a single tax year the quarters for that single year should be totaled to
calculate the amount in controversy for that year.

VI. AWARD
II ADMINISTRATION
III
IV

Example 7: Calculation of the Amount in Controversy – Multiple Tax Periods
The IRS determined that Taxpayer G is a responsible person within the meaning of IRC § 6672 and
imposed a penalty for an unpaid employment tax liability arising from Taxpayer G’s business for each of the
four quarters in Tax Year 1. The liabilities for the penalty are as follows: $15,000 (quarter one), $18,000
(quarter two), $10,000 (quarter three), and $12,000 (quarter four). The amount in controversy is $55,000
($15,000 + 18,000 + 10,000 + 12,000) because the four quarters relate to a single tax year.

Representing a Taxpayer with More Than $50,000 in Controversy

A clinic may represent a taxpayer in a case in which the amount in controversy for a given tax year exceeds
$50,000. However, the grantee must disclose the number of such cases on its Interim and Year-End reports on
Form 13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report, and an explanation of why each case
was accepted for representation on Form 13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative Report.

Factors an LITC should consider when determining whether to take a case where the amount in controversy
exceeds $50,000 include: Whether the taxpayer has access to other representation if the LITC declines to take
the case; whether the LITC has particular language or cultural competences that make it especially well-suited
to represent the taxpayer; whether the issue in the case is of significance to the low income or ESL taxpayer
populations; whether the issue in the case is novel; and whether the case would provide educational value for
student representatives. No one factor is determinative; rather, all the facts and circumstances of the case must be
taken into account when deciding whether to accept a case where the amount in controversy for a tax year exceeds
$50,000.

VII
VIII
APPENDICES

Participation in the United States Tax Court Clinical Program

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

LITCs are strongly encouraged to participate in the United States Tax Court Clinical Program. Submitting an
application to participate in the program may be a condition of receiving an LITC grant award. Procedures for
participation in the United States Tax Court Clinical Program can be found at ustaxcourt.gov/clinics.htm. Clinics

will receive notification of acceptance into the program from the Clerk of the Court. There are two different
components to the program:
nnThe

mailing “stuffer program;” and

nnThe

calendar call program.

A clinic may participate in one or both components. Each component has its own rules for participation.

The Tax Court Mailing Stuffer Program
Clinics approved to participate in the Clinical Program may draft a brief “stuffer notice” containing the clinic’s
contact information and advising petitioners of the availability of LITC services and submit the notice to the
Tax Court. The Tax Court will include the stuffer notice in mailings to local petitioners who indicated they
did not have representation. Sample notices with suggested language and format are available from the Tax
Court. If there is more than one clinical program that participates in the stuffer program for the selected Tax
Court calendar, the clinics must submit a joint stuffer to the Tax Court. Participating in the “Stuffer Program” is
outreach and can help increase the number of Tax Court petitioners reached by the clinic. Reaching petitioners
earlier may help facilitate a much earlier resolution.

Tax Court Calendar Calls
Clinics participating in the Clinical Program may also attend Tax Court calendar call sessions. Generally, Tax
Court calendar calls are held one to two times per year in each city where the Tax Court hears cases, although they
can occur more frequently, depending on local need.

United States Tax Court Calendar Call
When the Tax Court grants a taxpayer’s petition for a hearing, the Tax Court sends a notice of trial
to each petitioner scheduled for that day, as well as to the Commissioner of Internal Revenue
(respondent), approximately five months in advance of the calendar call. To efficiently handle cases, the
Tax Court typically schedules many hearings on the first day of a calendar call session. On the first day
of the scheduled week, each party is “called” before the judge to set hearings and trials and schedule
the court’s “calendar” for the week. Thus, it is known as a “calendar call.” Some Tax Court hearings
are resolved in a matter of minutes, while others take longer.

If a clinic identifies a taxpayer who is eligible for LITC representation, the clinic can choose whether to limit
assistance to an informal consultation about the tax issues, offer brief service including negotiating informally with
IRS counsel, or agree to enter an appearance and represent that taxpayer in the case before the Tax Court.

Representation by Students and Law Graduates
Practice by students and law graduates before courts and local tax agencies is governed by the procedural rules of
the applicable court or agency with jurisdiction over the matter. Clinics should be familiar with and follow the
rules of those jurisdictions.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Eligibility for Special Appearance Authorization for Students and Law Graduates

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Practice before the IRS under a special appearance authorization issued by the Director of the LITC Program
is limited to students and law graduates at an LITC or Student Tax Clinic Program working under the direct
supervision of an individual authorized to practice before the IRS. For other individuals, the Commissioner
or a delegate has the authority to grant Special Appearance Authorization to allow practice before the IRS. A
student is an individual enrolled in an accredited law, business, or accounting program. A law graduate is an
individual who graduated from law school one year ago or less and has not yet been admitted to the bar of any
state, territory, or possession of the United States, including a Commonwealth or the District of Columbia. An
individual who within one year of graduation has taken a bar examination and been unsuccessful, or who has
applied for admission to a bar during that one year period but was denied admission for any reason, is not eligible
for a special appearance authorization.

Submitting Form 2848 with Student/Law Graduate Representatives

VI. AWARD
II ADMINISTRATION
III
IV

For a student or law graduate to represent a taxpayer before the IRS, the taxpayer must sign a Form 2848, Power
of Attorney and Declaration of Representative, listing the student or law graduate and the supervisory representative.
But see, Substituting a Representative. Any Form 2848 submitted to the IRS that lists a student or law graduate as
a representative must include a special appearance authorization letter issued by the LITC Program Office, or the
IRS will not process the Form 2848.

Special Appearance Authorizations Automatically Expire
The authority of the supervisory representative listed on the Form 2848 submitted to the IRS will remain effective
until the form is withdrawn or revoked. However, the authority of any students or law graduates listed on Form
2848 to represent the taxpayer automatically expires 130 days from the day the taxpayer signs form. But see,
Substituting a Representative.

Clinics should avoid contacting the IRS to withdraw any student or law graduate as a taxpayer’s representative
unless doing so is necessary to protect the interests of the taxpayer. A notice submitted to the IRS withdrawing a
student or law graduate as a representative may result in the IRS inadvertently removing all representatives listed
on the relevant Form 2848, including the supervisory representative.

VI
VII

Substituting a Representative

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

VIII

The supervisory representative has the authority to assign and reassign student or law graduate representatives to
the taxpayer’s case without requiring the taxpayer to sign a new Form 2848 for each substitution, provided the
taxpayer checks the box on line 5 of Form 2848 delegating authority to the representative to substitute or add
representatives. Each time a student or law graduate representative is substituted for an existing representative,
the clinic should submit to the IRS a copy of the original Form 2848 signed by the taxpayer (with box 5 checked),
along with a new Form 2848 listing the substituted representative. The new Form 2848 listing the substituted
representative does not require the taxpayer’s signature but should be signed and dated by the supervisory
representative. If another student or law graduate is being added, remember that the student or law graduate on
the Form 2848 initially will be limited to representing the taxpayer for only 130 days from when the taxpayer
originally signed the Form 2848. If a student or law graduate is being substituted, the authority of the student or
law graduate initially listed on the Form 2848 terminates. The authority of a student or law graduate added or

substituted will expire 130 days from when he or she was added/substituted by the supervisory representative, not
130 days from the date the Form 2848 was originally signed by the taxpayer.
LITCs may apply for a special appearance authorization letter by faxing an Application for Special Appearance
Authorization and Information Chart to the LITC Program Office at 877-477-3520. For more detailed
instructions, please refer to the LITC Toolkit Website.
If an LITC encounters difficulty with the processing or recognition of Forms 2848 accompanied by a special
appearance authorization, please contact Susan Kideckel in the LITC Program Office at 212-298-2295 (not a tollfree call), or the clinic’s assigned Advocacy Analyst.

Conflicts of Interest and Student Representatives
ABA Model Rule 1.7 provides that a lawyer should not represent a client if the representation involves a
concurrent conflict of interest. Students and law graduates authorized to practice before the IRS are treated as
lawyers for purposes of analyzing ethics issues. Thus, students and law graduates who plan to seek employment
with the IRS while participating in an LITC should be wary of a potential conflict of interest. A student or law
graduate has an obligation to inform clients that he or she is seeking employment with the IRS. Clients may give
informed consent, confirmed in writing, to have the student or law graduate continue the representation. If a
client does not consent to the student or law graduate continuing the representation, the student or law graduate
must withdraw the employment application, or the Clinic Director must assign the case to an individual who does
not have a conflict of interest.

xii. Education
In addition to representing low income taxpayers in disputes with the IRS, LITCs are required to educate
low income taxpayers and taxpayers who speak English as a second language about their taxpayer rights and
responsibilities. Educational activities may be offered directly to low income and ESL taxpayers, or indirectly by
educating staff of other organizations that assist low income or ESL taxpayers.
Providing tax education to low income and ESL taxpayers serves multiple purposes, including:
nnHelping

taxpayers to understand their taxpayer rights and obligations;

nnPublicizing

the clinic and its services; and

nnGenerating

controversy representation cases.

Education topics should address tax issues of general significance to low income and ESL taxpayers, or topics with
particular relevance in the local community, such as:
nnTax

recordkeeping;

nnFiling

requirements and due dates;

nnThe Taxpayer
nnEligibility
nnTax

Bill of Rights;

for various deductions and credits;

provisions of the Affordable Care Act;

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

classification;

nnIdentity

theft;

nnIRS

spouse relief;

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

nnInnocent

nnWorker

audit and appeals process; or

nnCollection

alternatives.

Educational activities may be offered in a variety of formats; however, LITCs are encouraged to offer face-to-face
educational activities whenever possible. Examples of educational activities include but are not limited to:
nnMaking

a presentation about federal taxpayer rights and responsibilities to an ESL class at a local
community college;

nnPresenting

a workshop on collection alternatives, identity theft, worker classification, or tax provisions of the
Affordable Care Act at a public library in a community where a significant portion of the residents are low
income or ESL;

nnHolding

VI. AWARD
II ADMINISTRATION
III
IV

a class for low income workers about how to properly complete a Form W-4 for income tax
withholding; or

nnLeading

a weekly discussion series at a community center where a significant portion of the residents are
low income or ESL to educate taxpayers on topics such as: choosing a competent tax return preparer, filing
status, and claiming credits such as the Child Tax Credit and the Earned Income Tax Credit.

Clinics may also offer education to staff and volunteers of community groups or organizations to help them make
referrals and spot issues that may be faced by their constituents. For example, a clinic may hold a training for the
staff of an immigrant rights organization about how taxpayers apply for and properly use an ITIN. It may also be
offered to professional organizations as a tool to recruit local qualified representatives to join the clinic’s pro bono
panel. Clinics may be able to award CPE or Continuing Legal Education (CLE) credits for educational activities
about sophisticated tax issues impacting low income taxpayers. To report these types of activities, use Form
13424-A, Low Income Taxpayer Clinic General Information Report, (see Appendix B).

Educational Materials

VII

LITCs are responsible for creating, printing, and distributing the materials used to educate taxpayers. Materials
should be accessible to ESL taxpayers and prepared in languages spoken in the community.

VIII
APPENDICES

Many clinics are willing to share their educational materials. When asked, many clinics will allow
other clinics to adapt the materials. Collaboration with other clinics may help all clinics to use their
resources more effectively by enabling them to concentrate on creating new materials on select topics
or new areas. Some educational resources have been shared on the LITC Toolkit.

GLOSSARY
INDEX

The QTE is responsible for reviewing all educational materials for accuracy before distribution whether or not
they are prepared by the clinic or adapted from another organization’s or clinic’s materials.

LOW INCOME TAXPAYER CLINIC

xiii. Advocacy
The third prong of the LITC mission is to identify and advocate for issues that impact low income and ESL
taxpayers. LITCs may achieve this goal through a variety of methods, including but not limited to:
nnParticipating

in advocacy projects with professional organizations;

nnCommenting
nnPreparing

on proposed IRS regulations and guidance;

and filing an amicus brief to alert a court about the concerns of low income or ESL taxpayers;

nnAuthoring

articles in scholarly journals or general interest publications;

nnAppearing

on television or radio to raise awareness about tax issues that affect low income or ESL taxpayers;

nnProducing

public service announcements; or

nnSubmitting

issues to the Systemic Advocacy Management System (SAMS), available through the IRS
website at www.irs.gov/Advocate/Systemic-Advocacy-Management-System-SAMS.

To report these types of activities, use Form 13424-C, Low Income Taxpayer Clinic Advocacy Information Report,
or Form 13424-N, Low Income Taxpayer Clinic Advocacy Program Narrative Report. Grantees must ensure that
advocacy efforts do not rise to the level of certain lobbying actions which are prohibited as a use of federal grant
funds. See Section VI.D.iii, Lobbying Restrictions.

xiv. 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, a Tax Counseling for the Elderly (TCE) site, or other free tax return preparation service. Some IRS
Taxpayer Assistance Centers (TACs) will accept ITIN applications and verify taxpayer documents, but they will
not prepare tax returns. For a list of locations where in-person document review is provided, see www.irs.gov/
uac/TAC-Locations-Where-In-Person-Document-Verification-is-Provided. Note that TAC offices are open on an
appointment only basis, but will on occasion assist persons without appointments in emergency situations. LITC
grant funds cannot be used to fund return preparation and related activities, such as those performed by VITA or
TCE programs.
An LITC 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 or is an ancillary part of the LITC’s ESL education. The
clinic may not charge a fee (even if it is a nominal fee) for the preparation of a tax return or a claim for refund.
An LITC or an individual associated with an LITC that does not charge a fee is specifically excluded from the
definition of a “Tax Return Preparer” as set forth in Treas. Reg. § 301.7701-15(f ), for purposes of preparer
penalties.

Clinics are prohibited from including tax return, claim for refund, or ITIN application preparation among
a list of services provided in any advertising materials. See Section VI.C.iii, Developing a Community
Outreach Plan for more information.

LOW INCOME TAXPAYER CLINIC

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Example 1: Permissible Tax Return Preparation – Controversy Resolution
LITC Q is representing Taxpayer E with respect to an offer-in-compromise under IRC § 7122. Taxpayer
E must file all tax returns she is legally required to file before the IRS will process an offer-in-compromise
request. Taxpayer E has not filed returns for the last three tax years. Because filing the delinquent tax returns
is necessary to have the offer in compromise considered and resolve the controversy, LITC Q may assist
Taxpayer E in completing her tax returns for the last three tax years.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Example 2: Impermissible Tax Return Preparation – No Tax Controversy
Assume the same facts as in Example 1, except the offer-in-compromise is accepted by the IRS. As a
condition of the IRS’s acceptance of the offer, Taxpayer E must timely file returns for the five-year period
beginning with the date of acceptance of the offer. LITC Q cannot assist Taxpayer E in completing and filing
her returns due after the offer-in-compromise is accepted because the timely filing of future tax returns is not
a tax controversy.

VI. AWARD
II ADMINISTRATION
III
IV

Example 3: Permissible Tax Return Preparation – Controversy Resolution
Assume the same facts as Example 2, except Taxpayer E fails to file a return required to be filed during the
five-year period beginning with the date of acceptance of the offer and the IRS defaults the offer. Taxpayer E
engages LITC Q to represent her in trying to get the offer-in-compromise reinstated. LITC Q is permitted
to assist Taxpayer E in completing the delinquent return because reinstatement into the offer-in-compromise
program is a controversy matter and filing the return is necessary to resolution of the controversy.

Example 4: Permissible Tax Return Preparation – Ancillary to ESL Education
LITC R is conducting a program to educate taxpayers about required record keeping for tax return filing
purposes. LITC R did not advertise return preparation as a service available to taxpayers who attend the
educational event. Nonetheless, at the conclusion of the event, one of the attendees, Taxpayer F, asks an
employee of LITC R to “take a look” at her self-prepared tax return before she files it to determine if it is
correct. The employee of LITC R looks at the return and identifies several errors. The employee of LITC R
may assist in correcting the return because the assistance offered to Taxpayer F is ancillary to ESL education
and outreach.

VI
VII

Example 5: Impermissible Tax Return Preparation – Ancillary to ESL Education
LITC S holds a monthly workshop about the Earned Income Tax Credit (EITC). At the end of each
workshop, LITC S’s personnel offer to prepare a tax return for attendees eligible to claim the EITC. LITC
S may not prepare tax returns under these circumstances because attendees have not indicated that there is
a controversy for which the returns are required to resolve, and the routine offering of such service does not
qualify as ancillary. It is improper to make this offer at the conclusion of each workshop.

VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

D. NATIONAL POLICY REQUIREMENTS
i. 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:
nn26

U.S.C. § 7526;

nnThe

terms and conditions contained in this Publication;

nnAssurances

and Certifications contained in Standard Form 424B as modified and printed in this Publication;

nnAny

requirements, prohibitions or restrictions imposed by the legislation appropriating federal funds for this
award;

nnOther

guidance issued by OMB after the application or NCC Request has been received by the LITC
Program Office; and

nnAny

additional specific conditions listed in the Notice of Award.

Grantees are responsible for monitoring clinic operations to ensure that all activities conducted under the award
comply with applicable federal requirements and that performance expectations are being achieved. Grantees are
responsible for performing in accordance with the standards of operation, meeting all compliance requirements,
making proper expenditures, accounting for federal and matching funds, and completing timely and accurate
reporting of grant activities and finances.

Documenting the Sources of Matching Contributions
Grantees must maintain records to substantiate the source of all matching funds. For example, if the LITC is
including the value of a volunteer’s services at the LITC as matching funds, the clinic must track the amount
of time the volunteer spends working on LITC activities (e.g., using sign-in sheets, timesheets, or a similar
method to track the time). See Section VI.C.x, Recordkeeping and File Management, for additional details about
recordkeeping.

Disallowed Costs
If a grantee fails to comply with the federal statutes, regulations, or the terms and conditions in the Notice of
Award, the LITC Program Office may impose additional conditions, as described in 2 CFR § 200.207. If the
LITC Program Office determines that noncompliance cannot be remedied by imposing additional conditions, the
LITC Program Office may take one or more of the following actions:
nnRestrict

the use of grant funds;

nnDisallow

the use of grant funds or matching funds for all or part of the cost of the activity or action not in
compliance and seek recovery of improperly spent funds (plus any applicable interest);

nnSuspend

or terminate the award in whole or in part, as explained in Section VIII, Award Suspension or
Termination;

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

suspension or debarment proceedings as authorized under 2 CFR Part 180 and federal awarding
agency regulations;

nnTake

further awards for the program; or

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

nnWithhold

nnInitiate

other remedies that may be legally available.

Administrative requirements governing federal awards are set forth in the Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards, the Uniform Guidance. The uniform guidance helps
ensure the highest integrity in the financial management and operation of federal grant programs, and strengthens
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).
The electronic CFR is updated daily and is located at www.ecfr.gov. The Uniform Guidance can be found at
2 CFR Part 200, and the Treasury Department’s implementation of the uniform guidance can be found at 2 CFR
Part 1000, both of which are available at www.ecfr.gov. All applicable OMB guidance is incorporated into these
program requirements and into all LITC grant awards.

VI. AWARD
II ADMINISTRATION
III
IV

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 governmentwide requirements for a drug-free workplace
(41 U.S.C. §§ 8101-06 and 2 CFR Part 182), 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.

Trafficking Victims Protection Act of 2000
VII

The Trafficking Victims Protection Act (TVPA) of 2000, as amended (22 U.S.C. § 7104), 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 CFR § 175.15.

VIII
APPENDICES

The IRS may terminate the award, without penalty, if the grantee engages in, or uses labor recruiters, brokers, or
other agents in violation of the TVPA of 2000. The terms applicable to a grantee are as follows:

GLOSSARY
INDEX

You as the recipient, and your employees, may not:
a. Engage in severe forms of trafficking in persons during the period of time that the award is in effect;
b. Procure a commercial sex act during the period of time that the award is in effect;

LOW INCOME TAXPAYER CLINIC

c. Use forced labor in the performance of the award; or
d. Engage in 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:
nn 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

nn 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.

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 unilaterally terminate the award, without penalty, if it determines that the grantee has violated one
of the provisions in a, b, c, or d above, or if the IRS official authorized to terminate the award determines that an
employee of the grantee violated a prohibition in items a, b, c, or d above through conduct that is either:
nnAssociated

with performance under the award; or

nnImputed

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.

Federal Funding Accountability and Transparency Act
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.

Prevention and Response to a Breach of Personally Identifiable Information
OMB requires that when a grant recipient creates, collects, uses, processes, stores, maintains, disseminates,
discloses, or disposes of personally identifiable information within the scope of a federal award, the IRS shall
ensure that the grant recipient has procedures in place to respond to a breach. In addition, a grant recipient must
timely notify the IRS in the event of a breach, see pg. 43, Keeping Client Records in a Secure Location. Because
LITCs have access to their clients’ and prospective clients personally identifiable information, LITCs must have
procedures in place to respond to a breach, and must notify the LITC Program Office in the event of a breach.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

See OMB Memorandum M-17-12, Preparing for and Responding to a Breach of Personally Identifiable Information
(Jan. 3, 2017).

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Certain Criminal Law Violations
Federal law currently prohibits the award of grant funds to any corporation that was convicted of a felony criminal
violation under any federal law within the preceding 24 months, where the IRS is aware of the conviction,
unless a federal agency has considered suspension or debarment of the corporation, and made a determination
that denial of the grant is not necessary to protect the interests of the government. See Public Law 115-141,
Division E, Title VII, § 746 (March 23, 2018). If necessary, the LITC Program Office will advise grantees of any
changes in this prohibition for fiscal year 2019.
In addition, all applicants must disclose all violations of federal criminal law involving fraud, bribery, or gratuity
violations potentially affecting the grant award. Failure to make required disclosures can result in any of the
remedies described in 2 CFR § 200.338, including suspension or debarment. See 2 CFR § 200.113.

Conflict of Interest Policy
VI. AWARD
II ADMINISTRATION
III
IV

Applicants and grantees must have a written conflict of interest policy which contains the terms as listed in this
section. LITCs must disclose in writing to the LITC Program Office any potential conflict of interest situation
and how the conflict was resolved.
At a minimum, an LITC grantee’s conflicts of interest policy (“Policy”) must:
nnApply

to at least the grantee’s employees, officers, members of its board of directors (including non-director
members of committees), and pro bono panel members (“Covered Individuals”);

nnApply

to at least all grantee matters involving the use of LITC grant funds and matching funds, in whole
or in part, including, but not limited to, grants, contracts, procurements, leases, investments, other
commitments of grantee resources, and personnel matters;

nnCover

at least situations when an outside interest, activity, or relationship influences or appears to influence
the ability of a Covered Individual to exercise objectivity, or impairs or appears to impair his or her ability to
perform his or her responsibilities impartially and in the best interests of the grantee (“Conflict”); and
at least situations when an outside interest, activity, or relationship influences or appears to influence
the Covered Individual’s impartiality or duty of loyalty to a client.

VII

nnCover

VIII

The Policy must require Covered Individuals to avoid legal, financial, personal, or other Conflicts and potential
Conflicts involving the grantee, and to promptly disclose any such Conflicts and potential Conflicts that arise.
Covered Individuals must recuse themselves from a position of decision-making authority or influence on
decisions or actions with respect to any such Conflicts and potential Conflicts until resolved.

APPENDICES

Covered Individuals must report on any situations that they know, or reasonably should know will present a
Conflict or a potential Conflict. The Policy must specify to whom Conflicts must be reported and how Conflicts

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

will be addressed and resolved. Covered Individuals may not participate in any situation involving a Conflict or
potential Conflict, unless the grantee determines, through these procedures that the:
nnConflict

or potential Conflict is not substantial; and

nnCovered

Individual’s participation is in the best interest of the LITC and the LITC’s clients.

Association of Community Organizations for Reform Now
Federal law prohibits the IRS from providing funding to the Association of Community Organizations for
Reform Now (ACORN) or any of its affiliates, subsidiaries, allied organizations, or successors. See Public Law
114-113, Division H, Title V, § 522 (2015); Public Law 114-223, Division C, § 101(a)(5) (2016), as extended
by Public Law 114-254, § 101 (2016). This prohibition may be lifted by next fiscal year. Contact the LITC
Program Office for up-to-date information about this prohibition.

Buy American Act
Grantees must agree to comply with the Buy American Act, 41 U.S.C. 8301-8303, which includes a requirement
that all unmanufactured articles, materials, and supplies purchased using grant funds be mined or produced
in the United States and that all manufactured articles, materials, and supplies purchased using grant funds be
manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or
manufactured in the United States. A conviction for violating the Buy American Act causes debarment from
federal grants and contracts. The requirement to Buy American does not apply to information technology that is
a commercial item, products for which the expected value of the procurement is $3,500 or less, products for use
outside the United States, foreign products when domestic products are unavailable or are of unacceptable quality,
or foreign products excepted by certain trade agreements. The IRS may waive the requirement to Buy American
if its application would be inconsistent with the public interest or the cost would be unreasonable.

Other Applicable Laws and Regulations
Programs involving use of federal funds are governed by a wide variety of federal laws and regulations. These
include:
nnRestrictions
nnThe

on political activities (18 U.S.C. §§ 595, 598, 600-603);

national preservation program requirements (54 U.S.C. § 300101);

nnWhistleblower
nnRules

governing allowable costs (41 U.S.C. §§ 4304, and 4310);

nnEnvironmental
nnThe

protections (41 U.S.C. § 4712);

requirements of the Clean Air Act (42 U.S.C. § 7401); and

non-pollution requirement of the Federal Water Pollution Control Provisions (33 U.S.C. § 1251).

Civil Rights Protection and Other Federally Mandated 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.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

In the interim, all applicants for federal funding must provide information necessary to demonstrate compliance
with the following:
VI of the Civil Rights Act of 1964 (Public Law 88-352), as amended, which prohibits discrimination
on the basis of race, color, or national origin;

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

nnTitle

nnSection

504 of the Rehabilitation Act of 1973 (Public Law 93-112), as amended, which prohibits
discrimination on the basis of disability;

nnTitle

IX of the Education Amendments of 1972 (Public Law 92-318), as amended, which prohibits
discrimination on the basis of sex in education programs or activities;

nnAge

Discrimination Act of 1975 (Public Law 94-135), as amended, which prohibits discrimination on the
basis of age.

nn 31

CFR Parts 22 and 23, which are the Department of Treasury’s implementation of the provisions of
Title VI of the Civil Rights Act of 1964 and the Age Discrimination Act of 1975, respectively;

nn Note

VI. AWARD
II ADMINISTRATION
III
IV

that 31 CFR § 23.34(a), Information requirements, requires each recipient to keep records in a
form and containing information that Treasury determines may be necessary to ascertain whether the
recipient is complying with the Act and these regulations; and

nnExecutive

Order 13166, Improving Access to Services for Persons with Limited English Proficiency,
requires that recipients of federal financial assistance 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.

All LITCs are required to display Publication 4053, Civil Rights Poster.

V
VI

Note that there are additional requirements for data collection from the Department of the Treasury, and guidance
will be forthcoming. Once the guidance is available, the LITC Program Office will make the guidance available
on the LITC Toolkit. The LITC is required to check the toolkit for that guidance.

VII

Protection Against Reprisal

VIII

No recipient or associate of the recipient may intimidate, threaten, coerce, or discriminate against any individual
to interfere with any right or privilege protected by the laws identified in this section. No recipient or associate of
the recipient may intimidate, threaten, coerce, or discriminate against any individual because the individual has
made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing
involving enforcement of the laws identified in this section.

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

ii. Managing Grant Funds
Accessing LITC Grant Funds in PMS
Grant funds are paid through the Payment Management System (PMS), maintained by HHS Division of
Payment Management (DPM). 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.

Accessing PMS
Grantees must obtain a username and password to use the system. Grantees must also complete a form to set up
direct deposit of funds into the grantee’s bank account. Information regarding the EFT procedure is available
on the DPM segment of the HHS website at www.dpm.psc.gov. For details about seeking historical payment
information, see Section IV.E.iii, Meeting the Matching Funds Requirement.
The DPM has an online FAQs and training. Grantees are encouraged to visit the DPM website (www.dpm.psc.
gov) to view these resources. Grantees that experience problems accessing funds should contact the help desk at
877-614-5533 or send an email to [email protected].

Obtaining Reimbursement for Eligible Expenses
Grantees may request funds to reimburse for allowable expenses already paid or that will be paid within three
business days of receipt. If requesting funds to pay expenses, grantees must make requests in accordance with
their actual, immediate cash needs in carrying out LITC operations.
The timing and amount of EFT payments must be as close as is administratively feasible to the actual
disbursements by the grantee for direct program or project costs and the proportionate share of any allowable
indirect costs. If an expense has already been paid, grantees are encouraged to draw down those funds as soon as
possible. Questions regarding disbursements should be directed to the grantee’s assigned Advocacy Analyst.

Grant Funds Must Be Held in an Insured Account
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:
nnThe

grantee receives less than $120,000 in federal awards per year;

nnThe

best reasonably available interest-bearing account would not be expected to earn interest in excess of
$500 per year on federal cash balances; or

nnThe

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.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Interest Earned on Grant Funds

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

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 for administrative
expenses. Interest remittances should be made to the HHS PMS through an electronic medium using either
Automated Clearing House (ACH) network or a Fedwire Funds Service payment. See 2 CFR § 200.305.

iii. Lobbying Restrictions
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. 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.
VI. AWARD
II ADMINISTRATION
III
IV

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.

Any entity receiving grant funds from another federal source, either directly or indirectly, may be subject
to additional restrictions on lobbying.

Grantees are prohibited from using federal grant funds and matching funds to:
nnVisit

or send letters to members of Congress or state or local legislators, urging them to favor or oppose
specific legislation pending under their jurisdiction;

nnDevelop

nnDraft

VII

materials designed to advocate for the enactment or repeal of any legislation or provide such
materials to anyone;
or assist in the drafting of legislation or provide comments on draft legislation;

VIII

nnPay,

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

APPENDICES

nnEngage

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.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

LITC 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:
nnEducate

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;

nnRespond

to documented requests from members of Congress, state legislatures or other officials
(see 2 CFR § 200.450(c)(2)(i));

nnInteract

with agency liaisons, such as the National Taxpayer Advocate or Local Taxpayer Advocates,
regarding program-related issues;

nnRespond

to a personal or public invitation from the IRS for comments on proposed tax regulations or
guidance that impact low income and ESL taxpayers;

nnPartner

with professional organizations in efforts to identify and propose solutions for issues impacting low
income and ESL taxpayers (however, such efforts may not attempt to influence the introduction, enactment,
or modification of any federal or state legislation);

nnContact

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

nnDiscuss

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.

The LITC Program recognizes that the above 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 fall
within the scope of these rules, it should contact the assigned Advocacy Analyst prior to engaging in such activity.

Disclosure Requirements
Grantees may expend non-LITC funds (i.e., funds that are neither federal grant funds nor matching funds) on
lobbying activities. However, under the Byrd Amendment (31 U.S.C. § 1352), grantees may be required to
disclose lobbying activities conducted 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.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Table 1 details the main sources of authority that regulate lobbying by LITCs:

Source of
Restriction

Publicity and Propaganda/
Appropriations Laws
Restrictions

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

Applicability 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

Applicability 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

Exceptions 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

Federal grant funds
and matching funds

Restriction applies to federal
grant funds and matching funds.
Although the restriction does not
apply to funds that are neither
federal grant funds nor matching
funds, contacts with members
of Congress may need to be
disclosed.

Byrd Amendment 31
U.S.C. § 1352

VI. AWARD
II ADMINISTRATION
III
IV

2 CFR Part 200

Type of Funds Affected
by Restriction

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Table 1. Sources of Guidance on Lobbying Activities

VII
VIII

This chart describes restrictions on the use of federal grant funds and matching grant funds for lobby. In addition,
IRC § 501(c)(3) organizations are subject to lobby 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. See Publication 4221-PC, Compliance Guide for 501(c)(3) Public Charities, available at
www.irs.gov/pub/irs-pdf/p4221pc.pdf

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Example 1: Lobbying Restrictions
A grantee may send an email to the ABA sponsored LITC listserv to gather support or opposition for
legislation. Although such an email is an attempt to influence legislation, so long as neither federal grant
funds nor matching funds are 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 email to the listserv would likely constitute an “insubstantial”
amount of lobbying.

The grantee likely should not have substantial expenditures or have expended substantial time devoted to simple
tasks, such as sending 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. If the grantee employee is
considered a full-time LITC employee, then this activity may not be undertaken during working hours.
For more information about making a lobbying election, refer to:
nnIRC

§ 501(h) and IRC § 4911;

nnTreas.

Reg. §§ 1.501(h)-1 through 1.501(h)-3;

nnTreas.

Reg. §§ 56.4911-1 through 56.4911-10; and

nnPublication

557, Tax-Exempt Status for Your Organization.

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.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

E. REPORTING RESPONSIBILITIES

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Submission of Reports and Other Documents
Grantee Interim and Year-End reports are submitted online through Grant Solutions at www.grantsolutions.gov.
Grant Solutions is a comprehensive grant management system operated by the Grants Center of Excellence.
Grantees use Grant Solutions to take all actions regarding their grant (except for drawing down funds, which is
done in the PMS). This includes:
nnAccepting

the Notice of Award;

nnCompleting

the application amendment package;

nnProviding

a revised budget;

nnReporting

changes in the program plan or key clinic staff;

nnFiling

Interim and Year-End reports; and

nnSubmitting

NCC Requests for funding.
VI. AWARD
II ADMINISTRATION
III
IV

The LITC Program Office provides annual training to grantees on using Grant Solutions.

Completing the Application Amendment Package
All grantees must complete an application amendment package through www.grantsolutions.gov after receiving a
Notice of Award indicating the full amount of the award. The LITC Program Office will determine final award
amounts after Congress appropriates funding for fiscal year 2019. The Civil Rights Unit has added additional
questions to be answered by applicants and grantees. These changes will be incorporated in Form 13424-M in
2020. For 2019, these additional questions will be addressed by applicant’s in their Application Amendment and
are found in the instructions to the “Project Abstract” in Appendix A.

V
VI

If the grant amount awarded is less than the amount of grant funds requested, the grantee must submit a revised
budget through www.grantsolutions.gov. If the difference in funding award affects the clinic’s proposed activities,
a revised program performance plan also must be submitted. The budget may also need to be amended as a result
of conditions imposed by the LITC Program Office upon the receipt of the award.

VII
VIII

Grantees are required to notify the LITC Program Office if an event occurs that may significantly impact
clinic operations. Grantees should contact their assigned Advocacy Analyst via email, including a copy to
[email protected]. The Advocacy Analyst will respond to discuss the matter with the grantee. For
items that require the grantee to amend its application package (e.g., changes in LITC contact information or
changes in a program plan or budget), the Advocacy Analyst will forward the amendment package to the grantee
via www.grantsolutions.gov and schedule a due date for resubmission of the package.

APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

All grantees must complete an initial application amendment package through www.grantsolutions.gov,
even if no changes to the budget or program performance plan are required This is necessitated by the
system software.

Requirement to Submit Reports on Grant Activities
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 stated
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 support the three 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. Data is then incorporated into Publication
5066, LITC Program Report, which reports the activities of the LITCs to internal and external stakeholders
and highlights the important work that LITCs perform to protect the rights of America’s taxpayers. Thus, it is
important that grantees provide accurate and complete reports.

i. Events Requiring Notification to the LITC Program Office
Significant Changes in Clinic Operations
Grantees must notify the LITC Program Office in the case of problems, delays, or adverse conditions that
significantly affect operations of the clinic or materially impair its ability to meet the objectives of the award.
This notification shall inform the LITC Program Office of events, such as those described in this section, that
may significantly affect operations and include a statement of the action taken or contemplated to address the
situation, and whether any assistance from the LITC Program Office is 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, see
Section VIII. Award Suspension or Termination.

Changes in Clinic Operations or Key Personnel
Grantees are required to immediately notify the LITC Program Office about proposed changes in contact
information for the following:
nnKey

personnel, including the Clinic Director, QTE, or QBA (telephone number, address, or email address),
the clinic address (both the physical address and the mailing address), telephone number, or fax number;

nnThe

days and hours of operation; and

nnThe

beginning and ending dates clinic services will be provided.

These notifications ensure that the LITC Program Office has the most up-to-date information for each clinic and
can therefore update information in IRS on-line resources or printed publications.

Changes in Program Plan or Budget
Grantees are expected to spend grant funds and matching funds in accordance with the program plan and budget
submitted with their application or as later revised and approved. Grantees must request approval from the LITC
Program Office for any substantial change in the program plan or budget. A substantial change in the program
plan or budget includes a change to:

nnThe

scope or objective of the program;

nnKey

personnel or time devoted to the LITC by key personnel;

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

nnThe

cost categories exceeding ten percent of the federal grant award; and

nnBudgeted

amount or composition of matching funds (cash or third-party in-kind match).
II I. LITC
III PROGRAM
IV
DESCRIPTION
V

Grantees are responsible for monitoring the use of LITC grant funds throughout the year to ensure that all grant
funds awarded will be expended. If a grantee determines that it will have unused grant funds (i.e., not spend
its entire award), the grantee should immediately notify its assigned Advocacy Analyst. The notification should
contain the following information:
nnThe

amount of grant funds being returned;

nnThe

reason for the return of funds; and

nnThe

impact the return of funds will have on future operations (e.g., this is a one-time occurrence, or the
grantee anticipates a permanent reduction in its future funding needs).

VI. AWARD
II ADMINISTRATION
III
IV

A grantee that does not expect to use its entire grant award must contact the LITC Program Office
immediately so that the Program Office will have sufficient time to re-obligate the funds to another clinic
on or before September 30, the end of the federal government’s fiscal year.

Withdrawal from the LITC Program

A grantee that wishes to withdraw from the LITC Program or terminate operations of its LITC must notify the
LITC Program Office prior to the date of withdrawal or termination. 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 CFR § 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 grantee having to pay interest on those funds.

If a grantee 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.

VII

A lawyer whose clinic withdraws from the program must continue to comply with his or her ongoing professional
responsibilities such as providing competent representation to the client, acting with diligence and promptness
regarding a client’s concerns, and keeping a client informed of the proceedings in his or her case until such time as
the case is complete or the representative has successfully withdrawn from representation.

VIII
APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

If the withdrawal from the LITC Program will also involve terminating representation, LITC personnel must
adhere to any applicable rules of professional conduct. In this regard, ABA Model Rule 1.16 provides upon
terminating representation, a lawyer must give reasonable notice to the client, allow the client to retain other
counsel, and return any papers or property to which the client is entitled. State bars may have additional
requirements when withdrawing from representation. Additionally, the LITC must inform the United States Tax
Court that the LITC will no longer be a clinic within the meaning of IRC § 7526, and inform the Tax Court of
any decision to discontinue offering representation services altogether. When seeking withdrawal from a case that
is pending before a court, the rules governing withdrawal from that court must be followed.

ii. Submitting the Interim Report
An Interim report must be submitted online through www.grantsolutions.gov by July 30, 2019. The Interim
report covers the first half of the grant year (January 1, 2019 through June 30, 2019) and consists of the following
items, prepared in accordance with the relevant instructions:
nnStandard

Form 425, Federal Financial Report;

nnForm

13424-A, Low Income Taxpayer Clinic (LITC) General Information Report;

nnForm

13424-B, Low Income Taxpayer Clinic (LITC) Case Issues Report;

nnForm

13424-C, Advocacy Information Report;

nnForm

13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report;

nnForm

13424-L, Statement of Grant Expenditures; and

nnForm

13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative.

For reference purposes, copies of all required reporting forms and instructions are included in
Appendix B. However, grantees must complete and submit reporting forms in Grant Solutions.

iii. Submitting the Year-End Report
A Year-End report must be submitted online through www.grantsolutions.gov by April 1, 2020. The Year-End
report covers the entire grant year (January 1, 2019 through December 31, 2019). When preparing the program
narrative, the Clinic may reference the Interim Report in lieu of repeating information found therein. A complete
Year-End report consists of the following items, prepared in accordance with the relevant instructions:
nnStandard

Form 425, Federal Financial Report;

nnForm

13424-A, Low Income Taxpayer Clinic (LITC) General Information Report;

nnForm

13424-B, Low Income Taxpayer Clinic (LITC) Case Issues Report;

nnForm

13424-C, Advocacy Information Report;

nnForm

13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report;

nnForm

13424-L, Statement of Grant Expenditures; and

nnForm

13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative.

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 report for updates to reporting
requirements.

LOW INCOME TAXPAYER CLINIC

AWARD ADMINISTRATION

Late Submissions

II I. LITC
III PROGRAM
IV
DESCRIPTION
V

In certain instances, grantees 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 extension 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. Grantees should contact their assigned
Advocacy Analyst via email, including a copy to [email protected] to submit an extension request.
Failure to timely submit required reports to the LITC Program Office may result in any or all of the following:
nnRestricted

access to grant funds;

nnReduction

of any future award amount; or

nnSuspension

or termination of the grant.

iv. Grant Close-Out

nnSubmission

by the grantee of all required Interim and Year-End report forms;

nnLiquidation

by the grantee of all obligations incurred under the award;

nnDraw

VI. AWARD
II ADMINISTRATION
III
IV

The LITC Program Office will close out the LITC grant award when it determines that all applicable
administrative actions and activities related to the grant have been completed by the grantee. Before a grant may
be closed out, the following actions must be completed:

down by the grantee of payment for all allowable reimbursable costs;

nnRepayment

by the grantee of any balances of unobligated cash drawn down by the grantee; and

nnSettlement

of any adjustments to the grant award to account for any shortfall in the dollar-for-dollar
matching funds requirement.

Close out actions should occur within one year after receipt and acceptance of all required final reports.

VI
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

VII. LITC PROGRAM OFFICE RESPONSIBILITIES
AND CONTACT
The LITC Program Office is responsible for managing and administering the LITC grant program in a manner
that ensures federal funding is expended and funded programs are implemented in full accordance with U.S.
statutory and public policy requirements. The LITC Program Office fulfills its responsibilities by:
nnAdministering
nnProviding

the award and payment of grant funds;

assistance and guidance to grantees; and

nnMonitoring

the performance of grantees.

A. STRUCTURE
The LITC Program Office is part of TAS. The Director of the LITC Program reports directly to the National
Taxpayer Advocate. The LITC Program Office staff consists of the following:
nnHeadquarters

staff, including managers, program analysts, and support staff who report to the Director and
the Deputy Director of the LITC Program;

nnOperations

Office staff, including analysts responsible for processing grant applications, awards, reports, and
payments; and

nnAdvocacy

Office staff, including analysts responsible for reviewing and analyzing budgets and reports,
conducting site assistance visits, and serving as the primary liaison between grantees and the LITC Program
Office.

Figure 4, LITC Program Office Staffing Chart
Director

Deputy Director

Senior Analyst

Clinical Advocacy Manager

Analyst

LOW INCOME TAXPAYER CLINIC

Analyst

Secretary

Analyst

Secretary

Grant Operations Manager

Analyst

LITC PROGRAM OFFICE RESPONSIBILITIES AND CONTACT

B. ADMINISTRATION
The LITC Program Office administers the grant by:

nnRevising

II I. LITC
III PROGRAM
IV
DESCRIPTION
V
VI

nnProcessing

LITC grant applications and making awards to successful applicants;

and issuing annually Publication 3319, LITC Grant Application Package and Guidelines;

nnMaintaining

the LITC Toolkit, a website which is used to disseminate program guidance to grantees and
provide resources to assist clinics in serving low income and ESL taxpayers;

nnMaintaining

Publication 4134, Low Income Taxpayer Clinic List, a list of all federally funded LITCs, and
ensuring that the publication is included in appropriate IRS mailings and referenced in appropriate IRS
publications and notices;

nnUpdating

information about the LITC Program on IRS and TAS websites, including an interactive map
listing LITCs by state on www.irs.gov;

nnPublishing

nnReviewing

VII. LITC PROGRAM
II
OFFICE
III RESPONSIBILITIES
IV
V
AND
VI CONTACT
VII

annually Publication 5066, LITC Program Report, which reports the activities of the LITCs to
internal and external stakeholders; and
and analyzing data from reports submitted by grantees to identify trends and recognize best

practices.

C. ASSISTANCE
The LITC Program Office assists grantees and applicants by:
nnProviding
nnInforming

technical assistance and guidance to grantees and potential applicants;
the public about the availability of LITCs, as appropriate and to the extent permitted by law;

nnSponsoring

and organizing the Annual LITC Grantee Conference that delivers instruction and continuing
education to all grantees and provides an opportunity for attendees to meet face-to-face with colleagues from
clinics throughout the country to share ideas and strategies to better assist low income and ESL taxpayers;

nnConducting

orientation visits to familiarize new grantees with LITC Program requirements and to identify
potential areas where the clinic may need to create systems or improve processes;

nnFostering

the working relationship between grantees and Local Taxpayer Advocate (LTA) offices by
facilitating annual LTA site assistance visits;

VIII

nnIssuing

nnCoordinating
nnAssisting

APPENDICES

special appearance authorizations to LITCs that permit students and law graduates working under
the supervision of a practitioner to represent taxpayers before the IRS;
access for grantees to e-Services products offered by the IRS; and

with resolution of problems that grantees may experience with Grant Solutions.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

D. OVERSIGHT
The LITC Program Office conducts oversight of grantees by:
nnReviewing

Interim and Year-End reports to assess grantees’ progress in meeting program goals, collecting
emerging issues identified, and aggregating performance data submitted by grantees;

nnReviewing

budgets and financial reports submitted by grantees to ensure that federal funds are properly
expended and that matching funds are properly sourced, spent, and valued; and

nnConducting

operational site assistance visits to interview clinic personnel, observe facilities, review
procedures and internal controls, corroborate report information, and evaluate operations.

E. SITE ASSISTANCE VISITS
The LITC Program Office or the LTA conducts a site assistance visit to each grantee every year. There are three
types of site assistance visits:
nnOrientation

visit;

nnOperational

review visit; and

nnLTA

visit.

Orientation Visits
The LITC Program Office conducts an orientation visit to each grantee that did not receive a grant in the
preceding year. The orientation visit will generally occur during the first 120 days of the grant 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 staff of the LITC
Program Office to assess the status of newly funded clinics and to identify potential areas where the grantee may
need to create systems or improve processes to meet the requirements of the LITC Program.

Operational Review Visits
The purpose of an operational review visit is to evaluate a clinic’s overall operations and to provide technical
assistance to help the grantee maintain compliance with the terms and conditions of the LITC grant. The visit
may include the review of documents, papers, or other records of the grant recipient. OMB regulations require
that the IRS must have the right to access any documents, papers, or other records of a grant recipient which
are pertinent to the award in order to make audits and examinations. See 2 CFR § 200.336(a). The Treasury
Department implemented a regulation making it clear that “[t]he right of access under 2 CFR 200.336 shall not
extend to client information held by attorneys or federally authorized tax practitioners under the Low Income
Taxpayer Clinic program.” See 2 CFR § 1000.336. Consequently, when monitoring and evaluating clinic
activities, the LITC Program Office will respect the clinic’s duty to protect confidential information, and will
not interfere with the confidential nature of the relationship between qualified representatives and their clients.
Therefore, the LITC Program Office will not require LITCs to provide access to taxpayer-specific information
for the purpose of auditing or verifying that the 90/250 requirement has been satisfied, or that the amounts in

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OFFICE RESPONSIBILITIES AND CONTACT

controversy generally do not exceed the amount specified in IRC § 7463. In addition, the LITC Program Office
will not require an LITC to provide access to information a taxpayer provided to the LITC during a consultation
which did not result in the taxpayer executing a representation agreement.

II I. LITC
III PROGRAM
IV
DESCRIPTION
V
VI

During an operational review visit, an LITC Program analyst will interview clinic personnel, examine intake
procedures, review case management and reporting systems, and sample financial records. An operational review
visit may also include observation of clinic facilities and review of procedures and internal controls, personnel
policies, training plans, privacy and confidentiality policies, outreach plans and materials, educational curricula,
fee policies, and client satisfaction instruments.
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 visit at any time.

LTA Visits

VII. LITC PROGRAM
II
OFFICE
III RESPONSIBILITIES
IV
V
AND
VI CONTACT
VII

The LTA is required to visit each clinic in his or her state or territory at least once a year. In a year when the LTA
does not accompany the LITC Program Office on an orientation visit or an operational review visit, the LTA must
conduct an LTA visit. The purpose of the LTA visit is to foster the relationship between the LTA’s office and the
clinic.

VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

F. CONTACTING THE LITC PROGRAM OFFICE
Potential applicants may direct questions concerning the LITC Program or the application process to
the LITC Program Office. Organizations that have been awarded an LITC grant should contact their
assigned Advocacy Analyst directly with any questions regarding reporting or program requirements.
Hours of Operation

8:00 a.m. – 4:30 p.m. (ET), Mon. – Fri.

Phone

202-317-4700

E-Fax

877-477-3520

[email protected]

Address

Internal Revenue Service
LITC Program Office
Attention: TA: LITC, Room 1034
1111 Constitution Ave., NW
Washington, DC 20224

For questions relating to Special Appearance Authorizations for Student and Law Graduate Practice
Hours of Operation

8:00 a.m. – 4:30 p.m. (ET), Mon. – Fri.

Phone

212-298-2295

E-Fax

877-477-3520

OTHER RESOURCES
Dun & Bradstreet Data Universal Numbering System (DUNS)
Website

fedgov.dnb.com/webform

Phone Support

866-705-5711

[email protected]

System for Award Management (SAM)
Website

www.sam.gov

Phone Support

866-606-8220

Submission of a Full Grant Application via Grants.gov
Website

www.grants.gov

Phone Support

800-518-4726

[email protected]

Submission of an NCC Request and Interim/Year-End Reports via Grantsolutions.gov

Website

www.grantsolutions.gov

Email Support

[email protected]

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OFFICE RESPONSIBILITIES AND CONTACT

Department of Health and Human Services (HHS) Payment Management System (PMS)
https://pms.psc.gov/

Phone Support

877-614-5533

[email protected]

II I. LITC
III PROGRAM
IV
DESCRIPTION
V
VI

Website

Civil Rights Protection
Websites

www.irs.gov/about-irs/your-civil-rights-are-protected

2 CFR Part 200 (OMB Guidance) and
2 CFR Part 1000 (Treasury Department Adoption of OMB Guidance)
Website

www.ecfr.gov
There are also FAQs about 2 CFR Part 200 available at
https://cfo.gov/wp-content/uploads/2017/08/July2017-UniformGuidanceFrequent
lyAskedQuestions.pdf

Website

VII. LITC PROGRAM
II
OFFICE
III RESPONSIBILITIES
IV
V
AND
VI CONTACT
VII

Taxpayer Advocate Service Taxpayer Toolkit
www.taxpayeradvocate.irs.gov

United States Tax Court
Website

www.ustaxcourt.gov

Information and Updates
LITC eligibility, Program
Report, and locations

www.taxpayeradvocate.irs.gov/Tax-Professionals/Low-Income-Taxpayer-Clinics

LITC Toolkit

www.litctoolkit.com (Access restricted to current LITC grantees)

LITC Program Publications
Publication 3319, 2019 LITC Grant Application Package and Guidelines
Publication 4134, Low Income Taxpayer Clinic List
Publication 5066, Low Income Taxpayer Clinic (LITC) Program Report

VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

VIII. AWARD 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. Prior to taking such steps, the IRS will determine whether imposing additional
conditions upon the grantee is likely to remedy the non-compliance. 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.
Actions that may lead to suspension or termination include:
nnFailure

to comply with federal tax obligations;

nnFailure

to satisfy the 90/250 requirement of IRC § 7526(b)(1)(B)(i);

nnFailure

to provide matching funds on a dollar-for-dollar basis for all LITC grant funds awarded;

nnA

violation by the recipient of a material provision of IRC § 7526 or other applicable law or regulation
(including the Uniform Guidance);

nnA

violation by the recipient of a material provision of Publication 3319, 2019 Grant Application Package and
Guidelines, (for example, failure to timely file complete and accurate reports);

nnFailure

to maintain taxpayer information in a secure manner; and

nnFailure

to provide accurate and competent representation to taxpayers, where competent representation
requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary to provide effective
assistance. See ABA Model Rule 1.1, Competence, and Model Rule 1.3, Diligence.

Remedies for Noncompliance
If a grantee fails to comply with the federal statutes, regulations, or the terms and conditions in the Notice of
Award, the LITC Program Office may impose additional conditions, as described in 2 CFR § 200.207. If the
LITC Program Office determines that noncompliance cannot be remedied by imposing additional conditions, the
LITC Program Office may take one or more of the following actions, as appropriate in the circumstances:
nnTemporarily

restricting access to grant funds pending correction of the noncompliance or more severe
enforcement action;

nnDisallow

all or part of certain cost items, including grant expenditures and matching funds, that support
the activity or action not in compliance and seek recovery of improperly spent funds (plus any applicable
interest);

nnWholly

or partly suspend or terminate the grant;

nnInitiate

suspension or debarment proceedings as authorized under 2 CFR Part 180;

nnWithhold
nnTake

future award amount; or

other remedies that may be legally available.

LOW INCOME TAXPAYER CLINIC

AWARD SUSPENSION OR TERMINATION

Notification of Grant Suspension or Termination

II I. LITC
III PROGRAM
IV
DESCRIPTION
V
VI

Suspension or termination of a grant award will be handled in accordance with the Uniform Guidance. 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.

Challenging A Suspension or Termination

VII

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 the 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 has
final decision authority, unless recused. In recusal situations, a final decision will be made by the Deputy National
Taxpayer Advocate.

II VIII. AWARD
III
SUSPENSION
IV
V OR TERMINATION
VI
VII

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 (or the Deputy National Taxpayer Advocate in
recusal situations) is final.

Post-Termination Responsibilities
If the IRS terminates a grant, the grantee must submit a final Year-End report to the LITC Program Office within
90 days of the termination. Similarly, if clinic activity is terminated prior to the expiration of the period of the
grant agreement or if a grantee withdraws from the LITC Program, a final Year-End report must be submitted
within 90 days of final clinic activity or withdrawal from the program.

VIII

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 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 and 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.

APPENDICES

In addition, if the clinic will no longer participate in the United States Tax Court Calendar Call, the clinic must
notify the Tax Court so that the Tax Court will cease referring taxpayers to that clinic.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

Use of “LITC” After Discontinuation of Services
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 CFR § 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 IRS’s Office of Professional Responsibility.

LOW INCOME TAXPAYER CLINIC

APPENDIX A
I

FULL GRANT APPLICATION AND NON-COMPETING
CONTINUATION REQUEST FORMS

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII
VIII
II
III
IV
V
VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

APPLICATION FORMS
To be considered for 2019 LITC Program grant funding, all LITC Full Grant Applications and Non-Competing
Continuation (NCC) requests must be submitted by June 27, 2018. The Funding Opportunity Number for the
2019 LITC grant is TREASGRANTS-052019-001.
Appendix A of this publication is a useful guide for completing each of the required application forms. The
Office of Management and Budget (OMB) requires certain standard forms (SF) for use in all federal grant
programs. To assist applicants in completing the OMB forms, this appendix includes detailed instructions for the
OMB forms that have been tailored specifically to the LITC application. (The instructions that accompany the
standard OMB forms are generic instructions.
The LITC Program Office requires that applicants complete additional grant forms that are specific to the LITC
grant. These forms and instructions as well as a sample program budget (for both types of applications) and a
sample Project Abstract (NCC requests) are also included.
The forms contained in this publication are provided for reference purposes only. All Full Grant Applications and
NCC Requests must be submitted electronically via www.grants.gov or www.grantsolutions.gov, respectively.
Any forms submitted with a Full Grant Application or NCC Request may be released under the Freedom of
Information Act (FOIA). In response to a FOIA request, the LITC Program Office will release these forms after
appropriate redactions to ensure confidentiality of taxpayer information.
If you have questions about the LITC Program or grant application process, please contact the LITC Program
Office at 202-317-4700 (not a toll-free call) or by email at [email protected].

Instructions for Completing Full Grant Application Forms
A complete LITC Full Grant Application consists of the following items, submitted through www.grants.gov and
prepared in accordance with the relevant instructions:
qqStandard Form 424, Application for Federal Assistance;
qqStandard Form 424A, Budget Information – Non-Construction Programs;
qqIRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information;
qqIRS Form 13424-J, Detailed Budget Worksheet and Narrative;
qqIRS Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative;
qqAttachments Form (used to attach the following items);
nn Tax

exemption determination letter, if applicable;*

nn Proof

of academic accreditation, if applicable;*

nn Most

recent audited financial statement (if the applicant expends $750,000 or more in federal funds
during the applicant’s fiscal year, this must be a single audit or program-specific audit as defined in
2 CFR § 200.501). If the applicant’s most recent audited financial statement is available on the Federal
Audit Clearinghouse found at harvester.census.gov/facweb/ then in lieu of attaching the audit, please
indicate in an attached statement that it is available on the clearinghouse site (See Section IV.E.iv, OMB
Audit Requirement);

LOW INCOME TAXPAYER CLINIC

APPENDIX A

nn 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;*

nn Applicants

cost rate agreement, if applicable.*

nnIndirect

must also provide documentation (e.g., articles of organization or a Form 2848) which
shows that the designated Tax Compliance Officer on Form 13424 is properly authorized to receive tax
information; and

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

* Items marked with an asterisk must be submitted via the Attachments Form (which is incorporated into the
downloadable PDF from www.grants.gov).

NON-COMPETING CONTINUATION (NCC) REQUEST FORMS

VII

A returning clinic in a multi-year LITC grant that ends after December 31, 2018, must submit an NCC
Request. All NCC Requests must be submitted via www.grantsolutions.gov. The submission system on www.
grantsolutions.gov provides free access to the necessary forms required to complete an NCC Request and
notifies applicants if any fields were left blank where a response is required. NCC Requests will receive an email
confirmation from www.grantsolutions.gov that serves as acknowledgement of the NCC Request submission. Do
not submit NCC Requests via www.grants.gov. The LITC Program Office will provide annual training on how
to use www.grantsolutions.gov to submit reports and NCC Requests. Additional questions regarding the use of
www.grantsolutions.gov may be directed to the Program Office at [email protected].

VIII
II

Instructions for Completing NCC Request Forms

III

A complete NCC Request consists of the following items, submitted through www.grantsolutions.gov and
prepared in accordance with the relevant instructions:
qqStandard Form 424, Application for Federal Assistance;

qqStandard Form 424A, Budget Information – Non-Construction Programs;
qqIRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information;

V
VI
VII
APPENDIX A

qqIRS Form 13424-J, Detailed Budget Worksheet and Narrative;
qqProject Abstract, which includes the following information:

i. Numerical goals;
ii. Changes to the program plan; and
iii. Civil Rights Statement;

VIII

qqMost recent audited financial statement (if the applicant expends $750,000 or more in federal funds

APPENDICES

during the applicant’s fiscal year, this must be a single audit or program-specific audit as defined in
2 CFR § 200.501). If the applicant’s most recent audited financial statement is available on the Federal
Audit Clearinghouse found at harvester.census.gov/facweb/ then in lieu of attaching the audit, please
indicate in an attached statement that it is available on the clearinghouse site (See Section IV.E.iv, OMB
Audit Requirement);

GLOSSARY
GLOSSARY
INDEX
INDEX

qqAn 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;*

LOW INCOME TAXPAYER CLINIC

qqApplicants must also provide documentation (e.g., articles of organization or a Form 2848) which

shows that the designated Tax Compliance Officer on Form 13424 is properly authorized to receive tax
information; and
qqIndirect cost rate agreement, if applicable.*

* Items marked with an asterisk must be submitted via an attachment. The LITC Program Office provides
training to grantees on how to use www.grantsolutions.gov.

Instructions for Standard Form 424, Application for Federal Assistance
Purpose
This is a standard form required to be submitted with all Full Grant Applications and NCC Requests for an LITC
matching grant. This form is used to report information about the applicant, including the amount and period of
the grant requested, and the counties and congressional districts where the applicant will provide assistance.
Signing the Application for Federal Assistance certifies that the applicant:
nnHas

provided true, complete, and accurate information;

nnHas

provided the required assurances, found in Publication 3319, Section VI.D.i-iii, National Policy
Requirements; and

nnUpon

acceptance of an award, agrees to comply with the terms of this Publication and any additional terms
contained in the Notice of Award issued by the LITC Program Office.

OMB requires Standard Form 424, Application for Federal Assistance, to be used by all federal grant programs.
The instructions in this appendix are intended as a guide for submitting LITC Full Grant Applications and NCC
Requests. Some information collected on this form is not required to apply for the LITC application; however,
to ensure successful processing of this form, a response must be entered for each field. The instructions in this
appendix indicate the fields in which to enter a response of N/A.
Standard instructions are available at www.grants.gov/web/grants/form-instructions/sf-424-instructions.html,
however as previously indicated the standard instructions are generic and the instructions provided in this
appendix will better assist the applicant in completing the form.

Who Must Complete This Form
All organizations submitting a Full Grant Application or an NCC Request must complete this form.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Specific Instructions
Instructions for completing each question for a Full Grant Application or an NCC Request are incorporated into the
sample Standard Form 424 below. Some entries may be pre-populated for NCC Requests.
I

Field Name

Information

Type of Submission:

(Required) Select the box labeled Application.

Type of Application:

(Required) Select one type of application:

Item

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

• New - An application that is being submitted for a single-year grant or an application that is
being submitted for the first year of a multi-year grant.
• Continuation – A request that is being submitted for the second or third year of a multi-year
grant that was awarded in 2016 or 2017.
• Revision – Do not select this box when applying for a grant.

VIII

Date Received:

Enter N/A into this field.

Applicant Identifier:

Enter N/A into this field.

5a.

Federal Entity Identifier:

Enter N/A into this field.

5b.

Federal Award Identifier:

Enter N/A into this field.

Date Received by State:

Enter N/A into this field.

State Application Identifier:

Enter N/A into this field.

Applicant Information:

Enter the following in accordance with the instructions:

8a.

Legal Name:

(Required) Enter the name of the organization applying for the grant. The name of the
applicant must match exactly the name used to register with the System for Award
Management (SAM). If a grant is awarded, the award will be payable to the name listed
in this section. Do not use an acronym unless it is the legal name. Information on
registering with SAM is available in Section III.C.iii, Compliance with Federal Tax and Non-Tax
Requirements.

8b.

Employer/Taxpayer Number
(EIN/TIN):

(Required) Enter the employer or taxpayer identification number (EIN or TIN) as assigned by
the IRS. Do not enter a Social Security number. This number will be used to verify that the
applicant is not suspended or debarred from receiving a federal award, and is compliant with
federal tax and non-tax obligations.

III
IV
V
VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

Item

Field Name

Information

8c.

Organizational DUNS:

(Required) Enter the organization’s DUNS or DUNS+4 number received from Dun and
Bradstreet. Information on obtaining a DUNS number is available in Section IV.C.iii, Data
Universal Numbering System (DUNS) Number.

8d.

Address:

Enter the mailing address of the applicant organization registered with SAM. Please provide
a complete response, including: Street 1 (Required); City (Required); County/Parish; State
(Required if country is U.S.); Province; Country (Required); 9-digit Zip/Postal Code (Required).

8e.

Organizational Unit:

Enter N/A into this field.

8f.

Name and contact information
of person to be contacted
on matters involving this
application:

Enter the First Name and Last Name (Required); Prefix; Middle Name; Suffix; Title; Telephone
Number (Required); Fax Number; and Email (Required). Please provide the best possible
contact information for LITC Program Office staff to be able to reach the appropriate individual
to resolve issues with the application.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Item

Field Name

Information

Type of Applicant:
(Required) Select up to
three applicant type(s).

A. State Government
B. County Government

C. City or Township Government
D. Special District Government

E. Regional Organization

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

F. U.S. Territory or Possession
G. Independent School District
H. Public/State Controlled Institution of Higher Education
I. Indian/Native American Tribal Government (Federally Recognized)
J. Indian/Native American Tribal Government (Other than Federally Recognized)
K. Indian/Native American Tribally Designated Organization
L. Public/Indian Housing
M. Nonprofit with 501(c) status
N. Nonprofit without 501(c) status
O. Private Institution of Higher Education
P. Individual

VII

Q. For-Profit Organization (Other than Small Business)
R. Small Business

VIII

S. Hispanic-serving Institution

T. Historically Black Colleges and Universities (HBCUs)
U. Tribally Controlled Colleges and Universities (TCCUs)
V. Alaska Native and Native Hawaiian Serving Institutions

III

W. Non-U.S. Entity
X. Other (specify)

Name of Federal Agency:

(Required) Enter Internal Revenue Service.

11.

Catalog of Federal Domestic
Assistance Number/Title:

Enter 21.008 as the Catalog of Federal Domestic Assistance number and
Low Income Taxpayer Clinic as the program title.

12.

Funding Opportunity Number/
Title:

(Required) Enter TREAS-GRANTS-052018-001 as the Funding Opportunity Number and
Low Income Taxpayer Clinic as the title.

10.

VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

Item

Field Name

Information

13.

Competition Identification
Number/Title:

Enter TREAS-GRANTS-052019-001 as the competition identification number.

14.

Areas Affected By Project:

Enter the county where services will be provided. If multiple counties, list each individually.
Only list counties. If the applicant defines service area by city or region (e.g., northwest
region of state). List all counties by name within the geographical bounds of the region. If
the clinic serves the entire state, enter the state name and note All Counties.

15.

Descriptive Title of Applicant’s
Project:

(Required) Enter Low Income Taxpayer Clinic. No attachments are required.

16.

Congressional Districts Of:

16a. (Required) Enter the congressional district in which the applicant organization is located.
16b. Enter all district(s) where the project provides or will provide assistance. Enter in
the format: 2 characters state abbreviation - 2 characters district number, e.g., CA-05 for
California’s 5th district, NC-10 for North Carolina’s 10th district. If all congressional districts
in a state are affected, enter “all” for the district number, e.g., MD-all for all congressional
districts in Maryland. If necessary, attach a list of congressional districts.

17.

Proposed Project Start and End
Dates:

(Required) Enter 1/1/2019 as the proposed start date. Applicants seeking a single
year grant should enter 12/31/2019. Applicants seeking a multi-year grant should enter
12/31/2020 or 12/31/2021, as applicable.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Field Name

Information

18.

Estimated Funding:

18a. (Required) Enter the amount of federal grant funds requested for 2019, regardless of
whether the applicant is applying for a single-year or multi-year grant. This amount cannot
exceed $100,000.

Item

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

18b-e. Enter the amount of all matching funds by source.
18f. Enter any income the organization expects to generate from the program.
Note: The total from lines b-f must equal or exceed the amount entered on line 18a to show
that applicant can provide a dollar-for-dollar match.
18g. Enter the sum of the amounts in 18a through 18f.

VII
VIII

(Required) Select “c. Program is not covered by E.O. 12372.”

20.

Is the Applicant Delinquent on
any Federal Debt?

(Required) Select the appropriate box. This question applies to the applicant organization,
not the person who signs as the authorized representative. Categories of federal debt
include, but, may not be limited to: delinquent audit disallowances, loans and taxes. If yes,
include an explanation in an attachment.

III

Is Application Subject to
Review by State Under
Executive Order 12372
Process?

19.

IV
V
VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

Item

Field Name

Information

21.

Assurances and Certifications
and Authorized Representative:

Check the box marked “I agree” after reviewing the Assurances and Certifications in
Publication 3319.
To be signed and dated by the authorized representative of the applicant organization. Enter
the first and last name (Required); prefix, middle name, suffix. Enter title, telephone number,
email (Required), and fax number. A copy of the governing body’s authorization for you to sign
this application as the official representative must be on file in the applicant’s office.
Note: Signing this form (Standard Form 424) certifies that the applicant will comply with
the Assurances and Certifications listed in Publication 3319. Section VI.D. National Policy
Requirements i-iii. Please carefully review the Assurances and Certifications before signing
this form.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Instructions for Standard Form 424A, Budget Information for NonConstruction Programs
I

Purpose

This is a standard form required to be submitted with all Full Grant Applications and NCC Requests for an
LITC matching grant. This form is used to summarize the proposed budget for the LITC grant, including how
federal grant funds and matching funds will be spent during the grant period. All budgeted amounts must be
reasonable, necessary, and allocable to this grant. In preparing the budget, adhere to existing guidelines in 2 CFR
Part 200, 2 CFR Part 1000, and Publication 3319 which explain how budgeted amounts should be reported. See
Publication 3319, 2 CFR § 200.306, and 2 CFR § 1000.306 for guidance on matching funds.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Note:
nn Each budget item does not require a dollar-for-dollar match, but the total matching funds must equal
or exceed the total federal funds requested, see Publication 3319, Section IV.E.iii, Meeting the Matching
Funds Requirement.
nn Federal

funds are those funds the applicant is seeking from the IRS in support of the LITC Program.

nn Non-federal

VII

funds are funds from other sources that the applicant has or will have available to spend on
the LITC Program. These are considered matching funds.

nn 2

nn Please

VIII

CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards provides guidance about allowable and unallowable expenses. Also, see Publication
3319, Section IV.E.iii, Meeting the Matching Funds Requirement, for a list of common expenses that are
allowable or unallowable.
round figures to whole dollars only.

III

nnBudgets

should only include funding requested for grant year 2019, even if an applicant is applying for a
multi-year grant.

IV
V

OMB requires Standard Form 424A, Budget Information for Non-Construction Programs, to be used by this
federal grant program. The instructions in this appendix are intended as a guide for submitting LITC Full Grant
Applications and NCC Requests.

VI
VII
APPENDIX A

Standard instructions are available at www.grants.gov/web/grants/form-instructions/sf-424a-instructions.html as
previously discussed the standard instructions are generic.

Who Must Complete This Form

VIII

All organizations submitting a Full Grant Application or an NCC Request must complete this form. Budget
information must also be reported on Form 13424-J, Detailed Budget Worksheet. Failure to provide this
information will result in non-consideration of the Full Grant Application or NCC Request.

APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

Specific Instructions
This form is designed so that application can be made for LITC grant funds. Sections A and B should include
budget estimates for grant year 2019 only. If applying for a multi-year grant or submitting an NCC Request, Section
E should present the need for federal assistance in the subsequent grant years. All applications should contain a
breakdown by the object class categories shown in lines a–k of Section B.
Item

Field Name

Information

Section A
Budget Summary

1(a).

Grant Program Function or
Activity:

Enter LITC.

1(b).

Catalog of Federal Domestic
Assistance Number:

Enter 21.008.

1(c),
1(d).

Estimated Unobligated
Funds:

Leave 1(c) and 1(d) blank.

1(e).

New or Revised Budget –
Federal Funds Portion:

Enter the amount of LITC grant funds requested for grant year 2019.

1(f).

New or Revised Budget –
Non-Federal Funds Portion:

Enter the amount of matching funds to be provided for grant year 2019. LITC grant funds
require a dollar-for-dollar match. Thus, the amount in 1(f) must be equal to or greater than the
amount entered in 1(e).

1(g).

New or Revised Budget
– Total:

Enter in 1(g) the sum of the amounts entered in 1(e) and 1(f). The amount in 1(g) should
represent the total funds needed to support the LITC program for 2019.

2-4.
5.

Leave lines 2–4 blank.
Totals:

Section B
Budget Categories

LOW INCOME TAXPAYER CLINIC

Enter the total for all columns used. The amount in 5(e) of this form should equal the amount
on Standard Form 424, Application for Federal Assistance, line 18(a). The amount in 5(f) of
this form should equal the sum of the amounts on Standard Form 424, Application for Federal
Assistance, lines 18(b) – (f). The amount in 5(g) of this form should equal the amount on
Standard Form 424, Application for Federal Assistance, line 18(g).

APPENDIX A

Item

6(a).

Personnel:

This expense category is used to report salaries and wages that will be paid to LITC staff. Do
not include fringe benefits in this category (fringe benefits should be accounted for in 6(b)).
Volunteer in-kind services should not be combined with personnel expenses; they should be
reported separately in 6(h).

6(b).

Fringe Benefits:

This expense category is used to report fringe benefits that will be paid on behalf of LITC staff
whose wages and salaries are reported in 6(a), Personnel.

6(c).

Travel:

This expense category is used to report budgeted travel costs, including costs associated with
attendance at the Annual LITC Grantee Conference and other travel expenses directly related to
conducting LITC business or activities.

6(d).

Equipment:

This expense category is used to report the budgeted cost of equipment that will be purchased
by the applicant and used in operating an LITC program. Donated equipment may be included
as matching funds on line 8 and must be valued at the fair market value of the property at the
time of the donation.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Provide a breakdown of budgeted funds by object class for column (1) in lines 6(a) – (k).

Information

Object Class Categories:

Field Name

Report equipment purchases of less than $5,000 in 6(e) (2 CFR § 200.94). Report leased
equipment in 6(f) and equipment maintenance expense in 6(h).

6(g).

Construction:

This category is not applicable to this grant. No expenses are allowed.

6(h).

Other Expenses:

This expense category is used to report all other direct costs that will be incurred in operating
the LITC program that are not properly included in the object class categories in 6(a) – (g). The
value of volunteer services is included in this category as matching funds, see Publication
3319, Section IV.E.iii, Meeting Matching Funds Requirement.

6(i).

Total Direct Charges:

The total of the direct charges is the sum of 6(a) – (h) for each column.

6(j).

Indirect Charges:

This section is used to report indirect costs not directly related to the LITC program, but
incurred as part of the general overhead and administration of the sponsoring organization.
A reasonable portion of LITC grant funds may be used to pay for indirect expenses, however
indirect costs paid using any other funds may not be included when calculating matching funds
required under the LITC grant. There are two acceptable methodologies for calculating federal
funds allocable to indirect costs:

This expense category is used to report the budgeted cost of rent, utilities, and other
contracted items or services that will be used in operating an LITC program. Donated space
may be included as matching funds and the value assigned may not exceed the fair rental value
of comparable space. If a contracted item or service pertains to other programs in addition to
LITC activities, only the portion directly attributable to LITC activities may be allocated to the
LITC program.

Contractual:

III

6(f).

This expense category is used to report the cost of supplies and equipment costing less than
$5,000 that will be used in operating the LITC. Donated supplies may be included as matching
funds on line 8 and are valued at the fair market value of the property at the time of the
donation.

VIII

Supplies:

VII

6(e).

VI
VII
APPENDIX A

i. Indirect cost rate agreement (ICRA)
• Must be approved in advance;
• Agreement must set forth cost items included in the rate; and
• The clinic may not charge items included in the rate as separate expense items.
ii. De minimis ten percent rate
• Rules are set forth in 2 CFR Part 200; and
• Clinics that elect to use the de minimis rate are prohibited from charging administrative
or facility costs as separate expense items.

VIII

6(k).

Totals:

APPENDICES

For example, if a clinic is part of a larger organization that has an ICRA and the rental cost of
the facility in which the clinic operates is included in the negotiated rate, then the clinic may
not include the facilities cost under the Contractual expense category on 6(f). Similarly, if the
clinic elects to use the ten percent de minimis rate to charge indirect costs on all of its federal
awards, no facilities and administration costs may be charged as direct costs.
Enter the total of the amounts from 6(i) and 6(j). The total amount in 6(k) should be equal to
the amount shown in 5(g).
The amounts entered in 6(a) – (k) must equal the totals in each category on Form 13424-J,
Detailed Budget Worksheet.
Columns (2) –(4):

Leave columns (2) – (4) blank.

Program Income:

If the LITC charges a nominal fee for services, enter the program income in column (1).
Program income may be counted as matching funds.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
GLOSSARY
INDEX
INDEX

Item

Field Name

Information

Section C
Non-Federal Resources

8(a).

Grant Program:

Enter LITC.

8(b).

Applicant:

Enter amounts of non-federal resources (i.e., matching funds) coming directly from the
applicant’s organization that will be used for the grant.

8(c).

State:

Enter the amount of the State’s cash and in-kind contribution if the applicant is not a State or
State agency. Applicants which are a State or State agency should leave this column blank.

8(d).

Other Sources:

Enter the amount of cash and in-kind contributions to be made from all other sources.

8(e).

Totals:

Enter totals of columns (b)–(d).

9-11.
12.

Leave lines 9-11 blank.
Total:

Enter the total for columns (b)–(e). The amount in 12(e) should be equal to the amount in 5(f).
All cash and in-kind contributions must be explained in narrative form on Form 13424-J,
Detailed Budget Worksheet. An explanation of the sources and amounts of matching funds to
be provided, as well as an explanation of the methods used to value in-kind contributions must
be included in the narrative.

Section D
Forecasted Cash Needs

13.

Federal:

Enter the amount of LITC grant funds needed by quarter during 2019.

14.

Non-Federal:

Enter the amount of cash matching funds from all other sources needed by quarter during
2019. Do not include the value of any in-kind matching funds.

15.

Total:

Enter the totals of amounts on lines 13 and 14.

Section E
Budget Estimates of Federal Funds
Needed for Balance of the Project

16(a).

Grant Program:

Enter LITC in column (a). Applicants requesting a single-year grant for 2019 should leave lines
16–23 blank.

16(b).

First Future Funding Period:

For Full Grant Applications requesting a multi-year grant and NCC Requests, enter the amount
of LITC funds requested for 2020.

16(c).

Second Future Funding
Period:

For Full Grant Applications requesting a multi-year grant and NCC Requests, enter the amount
of LITC funds requested for 2021, if applicable.

16(d).

Third Future Funding Period:

Leave 16(d) blank.

16(e).

Fourth Future Funding
Period:

Leave 16(e) blank.

17-19.
20.

Leave lines 17-19 blank.
Total:

Enter the total for each of the columns (b)–(e).

Section F
Other Budget Information

21.

Direct Charges:

Leave line 21 blank.

22.

Indirect Charges:

Leave line 22 blank.

23.

Remarks:

Leave line 23 blank.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Instructions for 13424, Low Income Taxpayer Clinic Application Information
Purpose
I
II

This form is used to report basic information about the applicant, including the amount and period of the grant
requested, contact information for the applicant’s sponsoring organization, the name and location of the clinic
where services are provided, and key clinic staff members. The Program Office uses the information reported
on this form to correspond with clinics and to publicize the location of service providers to taxpayers in IRS
publications and online. Please follow the instructions carefully and report all information completely and
accurately. A complete response means an entry must be provided for each field.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Who Must Complete This Form
All organizations submitting a Full Grant Application or an NCC Request must complete this form, see
Publication 3319, Section IV, Application and Submission Process.

Specific Instructions
Grant Period Request

VII
VIII

Check the appropriate box to indicate whether a single or multi-year grant is requested. Under IRC § 7526, the
LITC Program Office is authorized to issue grants for a period of up to three years. Applicants that have never
been awarded an LITC grant are not eligible for a multi-year grant and may only request a single year grant.

Current grantees submitting an NCC Request must check the box indicating whether the request is for the second
or third year of a multi-year grant.

III

Enter the total amount, rounded to whole dollars, of funding requested for the grant year. The maximum
funding that may be awarded for any grant year is $100,000.

Applicant Information
V

Enter the contact information for the organization applying for the grant. The name of the applicant must match
exactly the name used to register with the System for Award Management (SAM). If a grant is awarded, the award
will be payable to the organization listed in this section.

VI
VII
APPENDIX A

For Applicant’s Mailing Address, please provide a complete response, including zip plus-four code. Phone
numbers should be formatted as 123-456-7890 x.111.

VIII

Clinic Information

APPENDICES

This section is used to report information about the clinic where services are provided to taxpayers. If a grant is
awarded, the information entered in this section will be used exactly as entered to prepare IRS Publication 4134,
Low Income Taxpayer Clinic List. Publication 4134 is the primary tool for many low income and English as a
second language (ESL) taxpayers to locate LITC services. Thus, the clinic name entered should be the name
used in materials publicizing the LITC’s services to taxpayers and the public.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
GLOSSARY
INDEX
INDEX

Please provide a complete response, including zip plus-four code, for the 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 must identify a Clinic Director, Qualified Expert (QTE), and Qualified Business Administrator
(QBA) responsible for clinic operations and management of funds. For more information on these positions, see
Publication 3319, Section VI.C.i, Standards for Operating an LITC. For the Clinic Director and QTE, list any
applicable licenses and certifications.

Tax Compliance Officer
All applicants must identify a Tax Compliance Officer See Section III.C.iii, Compliance with Federal Tax and
Nontax Requirements and Glossary for a discussion of who may be designated.
An applicant must be in full compliance with its federal tax responsibilities when applying for an LITC grant and
throughout the grant year.

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Department of the Treasury - Internal Revenue Service

Form 13424

Low Income Taxpayer Clinic (LITC)
Application Information

(April 2018)

OMB Number
1545-1648

Grant Period Request (Check one)
Single year

Multi-year

Non-Competitive continuation

Second year

Third year

New application

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Grant amount requested (maximum $100,000)

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

VII

Applicant's Mailing Address
Street

VIII

Street address line 2

City

III

Clinic Information
Name of clinic

Public telephone number

Toll-Free telephone number (if applicable)

FAX number

Website address (if applicable)

VI
VII
APPENDIX A

Languages served in addition to English
Clinic Street Address

Clinic Mailing Address

Street

Street
State

ZIP + 4 code

City

State

ZIP + 4 code

Middle initial

Suffix

VIII

City

Prefix

Last name

First name

Telephone number

APPENDICES

Clinic Director Information

Email address

Attorney

CPA

Catalog Number 36126D

Enrolled Agent

GLOSSARY
GLOSSARY
INDEX
INDEX

Licenses/Certifications (Check all that apply)
Other

www.irs.gov

Form 13424 (Rev. 4-2018)

LOW INCOME TAXPAYER CLINIC

Page 2

Qualified Tax Expert (QTE)
Prefix

Last name

First name

Telephone number

Middle initial

Suffix

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

Tax Compliance Officer
Prefix

Last name

First name

Title
Telephone number

Email address

Instructions for Form 13424, Low Income Taxpayer Clinic (LITC) Application Information
Purpose
This form is used to report basic information about the applicant, including the amount and period of the grant requested, contact
information for the applicant’s sponsoring organization, the name and location of the clinic where services are provided, and key clinic
staff members. The Program Office uses the information reported on this form to correspond with clinics and to publicize the location of
service providers to taxpayers in IRS publications and online. Please follow the instructions carefully and report all information
completely and accurately. A complete response means an entry must be provided for each field.
Who Must Complete This Form
All organizations submitting a Full Grant Application or a Non-Competitive Continuation (NCC) Request must complete this form. See
Publication 3319, Section IV, Application and Submission Process.
Any forms submitted with a Full Grant Application or NCC Request may be released under the Freedom of Information Act (FOIA). In
response to a FOIA request, the LITC Program Office will release these forms after appropriate redactions to ensure confidentiality of
taxpayer information.
Specific Instructions
Grant Period Request
Check the appropriate box to indicate whether a single or multi-year grant is requested. Under IRC § 7526, the LITC Program Office is
authorized to issue grants for a period of up to three years. Applicants that have never been awarded an LITC grant are not eligible for
a multi-year grant and may only request a single year grant.
Current grantees requesting a NCC Request must check the box indicating whether the request is for the second or third year of a
multi-year grant.
Enter the total amount, rounded to whole dollars, of funding requested for the grant year. The maximum funding that may be awarded
for any grant year is $100,000.
Applicant Information
Enter the contact information for the organization applying for the grant. The name of the applicant must match exactly the name used
to register with the System for Award Management (SAM). If a grant is awarded, the award will be payable to the organization listed in
this section.
For Applicant’s Mailing Address, please provide a complete response, including zip plus-four code. Phone numbers should be
formatted as 123-456-7890 x.111.
Clinic Information
This section is used to report information about the clinic where services are provided to taxpayers. If a grant is awarded, the
information entered in this section will be used exactly as entered to prepare 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. Thus, the clinic name entered
should be the name used in materials publicizing the LITC’s services to taxpayers and the public.
Catalog Number 36126D

100

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424 (Rev. 4-2018)

APPENDIX A

Page 3

Instructions for Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (cont'd)
Please provide a complete response, including zip plus-four code, for the 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.”

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

All applicants must identify a Clinic Director, Qualified Expert (QTE), and Qualified Business Administrator (QBA) responsible for clinic
operations and management of funds. For more information on these positions, see Publication 3319, Section VI.C.i, Standards for
Operating an LITC. For the clinic director and QTE, list any applicable licenses and certifications.
Tax Compliance Officer
All applicants must identify a Tax Compliance Officer. See Section III.C.iii, Compliance with Federal Tax and Nontax Requirements and
Glossary for a discussion of who may be designated.
An applicant must be in full compliance with its federal tax responsibilities when applying for an LITC grant and throughout the grant
year.

VII
VIII
II
III
IV
V
VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 36126D

www.irs.gov

Form 13424 (Rev. 4-2018)

LOW INCOME TAXPAYER CLINIC

101

Instructions for Form 13424-J, Detailed Budget Worksheet
Purpose
This form must be submitted with all Full Grant Applications and NCC Requests for an LITC matching grant.
This form is used to provide a detailed explanation for each spending category in the proposed budget for the
LITC grant, including how federal grant funds and matching funds will be spent during the grant period. All
budgeted amounts must be reasonable, necessary, and allocable to this grant. In preparing the budget, adhere
to existing guidelines in 2 CFR Part 200, 2 CFR Part 1000, and Publication 3319 which explain how budgeted
amounts should be reported. See Publication 3319, 2 CFR § 200.306, and 2 CFR § 1000.306 for guidance on
matching funds.
Note:
nn Each budget item does not require a dollar-for-dollar match, but the total matching funds must equal
or exceed the total federal funds requested. For more information on meeting the matching funds
requirement, See Publication 3319, Section IV.E.iii, Meeting the Matching Funds Requirement.
nn Federal

funds are those funds the applicant is seeking from the IRS in support of the LITC Program.

nn Non-federal

funds are funds from other sources that the applicant has or will have available to spend on
the LITC Program. These are considered matching funds.

nn 2

CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (Uniform Guidance) provides guidance about allowable and unallowable expenses. Also,
see Publication 3319, Section IV.E.iii, Meeting the Matching Funds Requirement, for a list of common
expenses that are allowable or unallowable.

nn Please

round figures to whole dollars only.

nnBudgets

should only include funding requested for grant year 2019, even if an applicant is applying for a
multi-year grant.

Who Must Complete This Form
All organizations submitting a Full Grant Application or an NCC Request must complete this form. Budget
amounts must also be reported on Standard Form 424A. Failure to provide this information will result in
non-consideration of the Full Grant Application or NCC Request.

Specific Instructions
Each letter of the Budget Narrative corresponds to an expense category in the Detailed Budget Worksheet. The
information provided in the narrative should be sufficiently detailed so that a reviewer can arrive at the same
amounts listed on the Budget by expense and by category (federal or match).

A. Personnel
Report salaries and wages that will be paid to LITC staff. Do not include fringe benefits in this category (fringe
benefits should be accounted for in category B). In the explanation, list each staff member’s name or if they are
“to be hired,” position, rate of pay and time to be devoted to clinic activities (hourly wage and number of hours of
service, or annual salary and percentage of annual salary). State the portion of each staff member’s budgeted salary
or wages to be paid from federal and matching funds, as well as the source of the matching funds. Volunteer
in-kind services should not be included under the Personnel category. They should be included under category

102

LOW INCOME TAXPAYER CLINIC

APPENDIX A

H, Other Expenses. The total amount for personnel must equal the amount entered on Standard Form 424A, line
6(a).
I

1. Calculate the Full Time Equivalent for each clinic employee.
Determine each clinic staff member’s full-time equivalent (FTE). The FTE number is arrived at
by dividing the number of hours the employee will devote to LITC activities during the year by
the total hours that will be worked by a full-time employee in a year. For many organizations, an
employee is considered full-time if he or she works 40 hours a week (for other programs it might
be a different number). For this example, we will assume full-time is 40 hours per week. In one
year, a full-time employee would work 40 hours multiplied by 52 weeks for a total of 2,080 hours.
If the employee will devote 2,080 hours to the LITC, his or her FTE will be 1.0 (2,080 LITC
hours/2,080 total hours). If the employee will work 1,560 hours on LITC activities, then the FTE
will be .75 (1,560 LITC hours/2,080 total hours).

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Annual leave, sick leave, compensatory time off, and other approved leave categories are considered
“hours worked” for purposes of defining full-time equivalent employment that is reported.

VII

2. Calculate the personnel expense for each staff member.
For full-time salaried employees, multiply the total salary by the FTE, as calculated above, to arrive
at the LITC share of the personnel expense.

VIII

For salaried part-time staff, calculate the percentage of the staff ’s time to be devoted to the LITC
(LITC hours/total hours) and then multiply that percentage by the employee’s total salary.

For hourly employees, multiply the LITC hours to be worked by the hourly rate.
III

3. Determine and list out the dollar amount attributable to federal and match.
The FTE percentage represents the maximum portion of the employee’s wages that can be
allocated to the LITC grant, using grant funds (federal funds), matching funds, or a combination
of both.

IV
V

4. List sources of match.

VI
VII
APPENDIX A

B. Fringe Benefits
Report fringe benefits that will be paid on behalf of LITC staff whose wages and salaries are reported in category
A, Personnel. Include in the explanation:
nnThe

fringe benefits rate(s), including the formula (methodology) for calculating fringe benefits for each
position listed in category A;

nnThe

dollar amount attributable to federal and match; and

nnSource

APPENDICES

items that are included in fringe benefits;

VIII

nnThe

of matching funds.

The total amount for fringe benefits must equal the amount entered on Standard Form 424A, line 6(b).

GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

103

C. Travel
This expense category is used to report budgeted travel costs, including costs associated with attendance at the
Annual LITC Grantee Conference and other travel expenses directly related to conducting LITC business or
activities. In the explanation, identify:
nnThe

travel costs to be incurred;

nnWhether
nnThe

the costs will be paid with federal or matching funds; and

source of the matching funds.

If using a mileage rate, show the computation. The total amount for Travel must equal the amount entered on
line 6(c) of Standard Form 424A.

D. Equipment
This expense category is used to report the budgeted cost of equipment purchases that equal or exceed $5,000 that
will be used in operating an LITC program. See 2 CFR § 200.94. Equipment costing less is included in category
E, Supplies. Report leased equipment under category F, Contractual and equipment maintenance expense under
category H, Other Expenses.
Donated equipment may be included in the matching funds column and must be valued at the fair market value
of the property at the time of the donation. In the explanation, identify:
nnThe

equipment that will be purchased or donated;

nnWhether
nnThe

the associated costs will be paid using federal or matching funds; and

source of the matching funds.

If there will be third-party in-kind contributions of equipment, identify:
nnThe

equipment;

nnThe

donor; and

nnHow

the valuation was determined.

The total amount for equipment must equal the amount entered on Standard Form 424A, line 6(d).

supplies to be used;

nnWhether
nnThe

the associated costs will be paid using federal or matching funds; and

source of the matching funds.

If there are third-party in-kind contributions of supplies, identify:
nnThe

supplies;

nnThe

donor; and

nnHow

the valuation was determined.

The total amount for supplies must equal the amount entered on line 6(e) of Standard Form 424A.

104

LOW INCOME TAXPAYER CLINIC

APPENDIX A

F. Contractual

nnThe

nature of the expense;
the associated costs will be paid using federal or matching funds; and

nnWhether

source of the matching funds.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

nnThe

If a contracted item or service pertains to other programs in addition to LITC activities, only the portion
directly attributable to LITC activities may be allocated to the LITC program. The narrative must explain the
methodology used to apportion costs between the LITC activities and other programs. The total amount for
Contractual must equal the amount entered on Standard Form 424A, line 6(f ).

VII

Necessary and reasonable expenses that support LITC activities as well as functions of the organization should
be allocated and charged as a direct cost of award funds if it is practical to separate the portion of the expense
allocable to LITC activities. The determination of whether it is practical or reasonable to allocate expenses
directly in proportion to use depends on several factors, including the size of the organization running the LITC,
size and number of other functions the organization operates, and the amount of the expense.

VIII

G. Construction
This category is not applicable to this grant. No expenses are allowed.

H. Other Expenses
III

nnThe

type of expense;
the cost will be paid using federal or matching funds; and

nnWhether

VI
VII
APPENDIX A

nnThe

This expense category is used to report all other direct costs that will be incurred in operating the LITC program
that are not properly included in categories A through G. The value of volunteer in-kind services is included in
this category as matching funds. The explanation should identify:

source of the matching funds.

VIII

The explanation must also disclose the rate or rates that will be used to value volunteer in-kind services and the
number of volunteer hours that will be provided, categorized by the type of service or volunteer, as appropriate.
See Publication 3319 Section IV.E.iii, Meeting the Matching Funds Requirement, Determining the Value of Volunteer
Services. The total amount for other expenses must equal the amount entered on line 6(h) of Standard Form
424A.

APPENDICES

I. Total Direct Charges
The total of the direct charges is the sum of lines A - H for each column. The total amount for Total Direct
Charges must equal the amount entered on line 6(i) of Standard Form 424A.

GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

105

J. Indirect Charges
Report indirect costs not directly related to the LITC program, but incurred as part of the general overhead and
administration of the sponsoring organization. Necessary and reasonable expenses that support LITC activities
as well as functions of the organization should be allocated and charged as a direct cost of award funds if it is
practical to separate the portion of the expense allocable to LITC activities. The determination of whether it is
practical or reasonable to allocate expenses directly in proportion to use depends on several factors, including the
size of the organization operating the LITC, size and number of other functions the organization operates, and the
amount of the expense. The Uniform Guidance defines indirect costs as:
[T]hose costs incurred for a common or joint purpose benefitting more than one cost objective, and not
readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results
achieved. (2 CFR § 200.56.)
For example, if an organization has a $5,000 expense that supports LITC activities and two other programs
the organization operates. Suppose the organization can spend an additional $100 in administrative costs to
accurately allocate the $5,000 among the three programs in proportion to the benefit each received. In that case,
the allocation is reasonable and the organization should perform the allocation and charge the portion of the
$5,000 that is allocable to LITC activities as a direct cost.
Now suppose the organization has a $5,000 expense that supports LITC activities and two other programs the
organization operates, but to properly allocate the $5,000 among the three programs in proportion to the benefit
each received, it would cost the organization an additional $2,000 in administrative costs. In that case, direct
allocation of the cost is not cost-effective, and the organization can choose to account for the $5,000 expense as
an indirect cost. The organization then apportions the total indirect costs (i.e., the indirect cost pool) to each of
the benefiting programs using a method that is consistent, reasonable, auditable, and in accordance with generally
accepted business practices.
The Uniform Guidance in section 200.414(b) recognizes that because of the diverse characteristics and accounting
practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as
indirect costs in all situations. The purpose of the federal award is the determining factor in distinguishing direct
from indirect costs, rather than the nature of the goods and services expensed.
Typical indirect expenses may include:
nnSalaries

and wages of administrative and support staff;

nnRelated

employee benefits;

nnFacility

occupancy costs (e.g., utilities, security, maintenance);

nnOffice
nnLegal

supplies; and

and auditing charges.

Once the organization has classified expenses as either direct or indirect, the organization must determine how
to allocate the indirect costs amongst the programs that they benefit, so that LITC funds do not subsidize the
indirect costs of other programs or functions of the organization. To calculate the amount of federal funds
allocable to indirect costs, the organization may use a negotiated indirect cost rate agreement (ICRA) approved by
the organization’s cognizant agency. If the organization has never obtained a negotiated indirect cost rate, it may
elect to apply the de minimis rate of ten percent.

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APPENDIX A

Negotiated ICRAs and Cognizant Agencies

Obtaining an ICRA is a complex process that requires preparing and submitting an indirect cost rate proposal
(including supporting schedules and documentation), and may take several months or even years to establish a
final rate. A cognizant agency for indirect costs means the federal agency responsible for reviewing, negotiating,
and approving cost allocation plans or indirect cost proposals developed under 2 CFR Part 200 on behalf of all
federal agencies. See 2 CFR § 200.19.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

For Institutes of Higher Education (IHEs), cost negotiation cognizance is assigned to the Department of Health
and Human Services (HHS) or the Department of Defense’s Office of Naval Research (DOD), normally
depending on which of the two agencies (HHS or DOD) provides more funds to the educational institution for
the most recent three years. In cases where neither HHS nor DOD provides federal funding to an educational
institution, the cognizant agency for indirect costs assignment must default to HHS. For more information, see
Appendix III of the Uniform Guidance, Indirect (F&A) Costs Identification and Assignment, and Rate Determination
for Institutions of Higher Education (IHEs), paragraph C.11. In cases where neither HHS nor DOD provides
federal funding to an educational institution, the cognizant agency for indirect costs assignment must default to
HHS. Once an agency is assigned cognizance for a particular nonprofit organization, the assignment will not be
changed unless there is a shift in the dollar volume of the federal awards to the organization for at least three years.

VII

For nonprofits, the federal agency with the largest dollar value of federal awards with an organization will be
designated as the cognizant agency for indirect costs for the negotiation and approval of the indirect cost rates
(unless different arrangements are agreed to by the federal agencies concerned), and, where necessary, other rates
such as fringe benefit and computer charge-out rates. Once an agency is assigned cognizance for a particular
nonprofit organization, the assignment will not be changed unless there is a shift in the dollar volume of the
federal awards to the organization for at least three years. For more information, see 2 CFR 200, Appendix III,
Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit Organizations, paragraph
C.2.a.

VIII
II
III
IV

The Department of the Treasury does not negotiate ICRAs but will accept a negotiated ICRA approved by
another federal agency.

Organizations that apply an ICRA to determine the portion of indirect costs allocable to a federal award must
carefully separate direct costs from costs classified as indirect in the ICRA, and the ICRA must set forth cost items
included in the rate. Indirect costs are then calculated by applying the negotiated rate against the direct cost base.
Costs accounted for as indirect costs in the ICRA may not be expensed as direct costs (i.e., double-dipping). For
example, if a clinic is part of a larger organization that has an ICRA and the rental cost of the facility in which
the clinic operates is included in the negotiated rate, then the clinic may not include the facilities cost under the
Contractual expense category.

VI
VII
APPENDIX A
VIII

De Minimis Ten Percent Indirect Cost Rate

APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

Under § 200.414(f ) of the Uniform Guidance, a de minimis rate of ten percent of Modified Total Direct Costs
(MTDC) is available for organizations that have never had a negotiated ICRA. This is a simple, straightforward
option for award recipients without substantial experience managing grant funds. An organization that elects to
use the de minimis rate must use the rate for all federal awards it receives, and may use such rate indefinitely, or
may choose to negotiate an ICRA at any time.
If the clinic elects to use the ten percent de minimis rate to charge indirect costs on all federal awards, no facilities
and administration costs may be charged as direct costs.

LOW INCOME TAXPAYER CLINIC

107

MTDC
MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and
up to the first $25,000 of each sub award (regardless of the period of performance of the sub awards under the
award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission,
scholarships and fellowships, participant support costs and the portion of each sub award in excess of $25,000.
Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs,
and with the approval of the cognizant agency for indirect costs. See 2 CFR § 200.68.
If a clinic charges indirect costs based on an approved ICRA, a copy of the agreement must be submitted along
with Form 13424-J, Detailed Budget Worksheet and Narrative. For additional information, see Publication 3319,
Sections III.B-C.
Please note matching funds must be directly allocable to LITC activities and may not include indirect costs.

Matching Funds
Complete this section by providing a narrative that includes:
nnA

list of all sources of matching funds;

nnThe

amount of matching funds broken down by source; and

nnThe

methodology used for any calculations.

The clinic must state explicitly that matching funds to be provided to the LITC program:
nnWill

not be used as matching funds for any other federal program; and

nnWill

not be funds received from any other federal grant unless specifically authorized by statute to be eligible
as matching funds.

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LOW INCOME TAXPAYER CLINIC

APPENDIX A

FULL-TIME EQUIVALENT CALCULATION (FTE)
This is a further demonstration of determining FTE and also determining what is properly counted as matching
funding for purposes of the grant.
I

Example FTE Calculations
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

ABC Legal Services LITC computes a 1.0 FTE based on a 40-hour work week (2,080 hours per year). Amounts
are rounded to the nearest dollar.
Example: Clinic Director/(QTE) – John Fordham, Esq.
John works full-time at ABC Legal Services. He will spend 32 hours per week on LITC grant activities,
for an annual total of 1,664 hours, making John a 0.80 FTE (1,664/2,080) for purposes of the LITC
grant. John’s annual salary is $89,000. Since John’s time spent on LITC grant activities is equivalent to
0.80 FTE, he will receive $71,200 of his total salary ($89,000) for his work in the LITC. This is calculated
by multiplying his FTE annual salary of $89,000 by 0.80 for a total of $71,200 ($89,000 x 0.80 = $71,200).
From the $71,200 in compensation for work on LITC activities, $50,000 will be paid from LITC grant
funds (federal funds), and $21,200 from operating funds. Thus, a maximum of $21,200 may be classified as
matching funds.

VII
VIII

Example: Paralegal – Alice Gonzaga
Alice works part-time for ABC Legal Services, for a total of 1,040 hours. Annually she will spend a total of
832 hours on LITC grant activities, making Alice a 0.4 FTE (832/2,080) for purposes of the LITC grant.
Alice’s annual salary is $22,880. The percentage of her time spent on the LITC grant is 832/1040=.8. She
receives total annual compensation $18,304 ($22,880 x .8). Alice’s compensation will be comprised of
$10,000 paid from LITC grant funds (federal funds), and $8,304 (matching funds) paid from XYZ Private
Foundation funds. The remaining compensation of $4,576 is for non-LITC work and therefore is not
eligible match.

II
III
IV
V

Example: Intake – Ruth Washington
Ruth works full-time at ABC Legal Services. She will spend 18.4 hours per week on LITC grant activities,
for an annual total of 957 hours, making Ruth a 0.46 FTE (957/2,080) for purposes of the LITC grant.
Ruth is paid $15 per hour. She receives total annual compensation of $31,200 (2,080 x $15). Ruth’s
compensation will be comprised of $14,355 paid from LITC grant funds (federal funds), and $16,845 for
non-LITC work is paid from operating funds. None of Ruth’s compensation may be classified as matching
funds, because all of her time spent on LITC grant activities is compensated using LITC grant funds.

VI
VII
APPENDIX A
VIII

Example: Receptionist – Debra Chapman
Debra works full-time at ABC Legal Services. She provides administrative and clerical support to three
programs including the LITC program. Debra will spend one-third of her time on LITC activities, making
her a one-third FTE for purposes of the LITC grant. (The decimal would be a repeating decimal so in this
example a fraction is used to simplify the calculation and avoid the need to round). Debra’s annual salary
is $30,000, so $10,000 (1/3 x $30,000) of her annual salary is allocable to LITC activities. The $10,000
allocable portion will be paid using $6,000 from LITC grant funds (federal funds), and $4,000 paid from
private cash contributions. Thus, a maximum of $4,000 may be classified as matching funds.

APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

109

Form 13424-J
(May 2018)

Department of the Treasury - Internal Revenue Service

OMB Number
1545-1648

Detailed Budget Worksheet
Grant Period

Name of Low Income Taxpayer Clinic

From
Expense Categories

Federal

Match

Total

A. Personnel
B. Fringe Benefits
C. Travel
D. Equipment
E. Supplies
F. Contractual
G. Construction
H. Other Expenses
I. Total Direct Charges
J. Indirect Charges
K. Totals

Catalog Number 57758V

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www.irs.gov

Form

13424-J (Rev. 5-2018)

APPENDIX A

Page 2

Detailed Budget Narrative Explanations
A. Personnel

I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

B. Fringe Benefits

C. Travel

VII
VIII
II
III

D. Equipment

IV
V
VI
VII
APPENDIX A

E. Supplies

VIII
APPENDICES

F. Contractual

GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 57758V

www.irs.gov

Form

13424-J (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

111

Page 3
G. Construction

H. Other Expenses

I. Total Direct Charges

J. Indirect Costs

Matching Funds

Catalog Number 57758V

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Form

13424-J (Rev. 5-2018)

APPENDIX A

Page 4

Instructions for Form 13424-J, Detailed Budget Worksheet

Note:
• Each budget item does not require a dollar-for-dollar match, but the
total matching funds must equal or exceed the total federal funds
requested. For more information on meeting the matching funds
requirement, See Publication 3319, Section IV.E.iii, Meeting the
Matching Funds Requirement.

Who Must Complete This Form

Each letter of the Budget Narrative corresponds to an expense category
in the Detailed Budget Worksheet. The information provided in the
narrative should be sufficiently detailed so that a reviewer can arrive at
the same amounts listed on the Budget by expense and by category
(federal or match).

www.irs.gov

Report fringe benefits that will be paid on behalf of LITC staff whose
wages and salaries are reported in category A, Personnel. Include in the
explanation:
• The fringe benefits rate(s), including the formula (methodology) for
calculating fringe benefits for each position listed in category A;
• The items that are included in fringe benefits;
• The dollar amount attributable to federal and match; and
• Source of matching funds.
The total amount for fringe benefits must equal the amount entered on
SF-424A, line 6(b).

C. Travel
Report budgeted travel costs, including costs associated with attending
the Annual LITC Conference and other travel expenses directly related to
conducting LITC business or activities. In the explanation, identify:
• The travel costs to be incurred;
• Whether the costs will be paid with federal or matching funds; and
• The source of the matching funds.
If using a mileage rate, show the computation. The total amount for
Travel must equal the amount entered on line 6(c) of SF-424A.

D. Equipment
Report the budgeted cost of equipment purchases that equal or exceed
$5,000 that will be used in operating an LITC program. See 2 CFR §
200.94. Equipment costing less is included in category E, Supplies.
Report leased equipment under category F, Contractual and equipment
maintenance expense under category H, Other Expenses.
Form

GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 57758V

B. Fringe Benefits

APPENDICES

Report salaries and wages that will be paid to LITC staff. Do not include
fringe benefits in this category (fringe benefits should be accounted for in
category B). In the explanation, list each staff member's name or if they
are “to be hired,” position, rate of pay and time to be devoted to clinic
activities (hourly wage and number of hours of service, or annual salary
and percentage of annual salary). State the portion of each staff
member's budgeted salary or wages to be paid from federal and matching
funds, as well as the source of the matching funds. Volunteer in-kind
services should not be included under the Personnel category. They
should be included under category H, Other Expenses. The total amount
for personnel must equal the amount entered on SF-424A, line 6(a).

4. List sources of match.

VIII

A. Personnel

The FTE percentage represents the maximum portion of the
employee’s wages that can be allocated to the LITC grant, using grant
funds (federal funds), matching funds, or a combination of both.

VI
VII
APPENDIX A

Specific Instructions

3. Determine and list out the dollar amount attributable to federal
and match.

All organizations submitting a Full Grant Application or a NCC Request
must complete this form. Budget amounts must also be reported on
SF-424A. Failure to provide this information will result in nonconsideration of the Full Grant Application or NCC Request.

For hourly employees, multiply the LITC hours to be worked by the
hourly rate.

• Budgets should only include funding requested for grant year 2019,
even if an applicant is applying for a multi-year grant.

For salaried part-time staff, calculate the percentage of the staff’s time
to be devoted to the LITC (LITC hours/total hours) and then multiply
that percentage by the employee’s total salary.

III

• Please round figures to whole dollars only.

For full-time salaried employees, multiply the total salary by the FTE,
as calculated above, to arrive at the LITC share of the personnel
expense.

• 2 CFR Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform
Guidance) provides guidance about allowable and unallowable
expenses. Also, see Publication 3319, Section IV.E.iii, Meeting the
Matching Funds Requirement, for a list of common expenses that are
allowable or unallowable.

2. Calculate the personnel expense for each staff member.

VIII

• Non-federal funds are funds from other sources that the applicant has
or will have available to spend on the LITC Program. These are
considered matching funds.

Annual leave, sick leave, compensatory time off, and other approved
leave categories are considered "hours worked" for purposes of
defining full-time equivalent employment that is reported.

VII

• Federal funds are those funds the applicant is seeking from the IRS in
support of the LITC Program.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

This form must be submitted with all Full Grant Applications and NCC
Requests for an LITC matching grant. This form is used to provide a
detailed explanation for each spending category in the proposed budget
for the LITC grant, including how federal grant funds and matching funds
will be spent during the grant period. All budgeted amounts must be
reasonable, necessary, and allocable to this grant. In preparing the
budget, adhere to existing guidelines in 2 CFR Part 200, 2 CFR Part
1000, and Publication 3319 which explain how budgeted amounts should
be reported. See Publication 3319, 2 CFR § 200.306, and 2 CFR §
1000.306 for guidance on matching funds.

Determine each clinic staff member’s full-time equivalent (FTE). The
FTE number is arrived at by dividing the number of hours the
employee will devote to LITC activities during the year by the total
hours that will be worked by a full-time employee in a year. For
many organizations, an employee is considered full-time if he or she
works 40 hours a week (for other programs it might be a different
number). For this example, we will assume full-time is 40 hours per
week. In one year, a full-time employee would work 40 hours
multiplied by 52 weeks for a total of 2,080 hours. If the employee
will devote 2,080 hours to the LITC, his or her FTE will be 1.0 (2,080
LITC hours/2,080 total hours). If the employee will work 1,560 hours
on LITC activities, then the FTE will be .75 (1,560 LITC hours/2,080
total hours).

Purpose

1. Calculate the Full-Time Equivalent (FTE) for each clinic
employee.

Note: Application forms, including this form (Form 13424-J), may be
released under the Freedom of Information Act (FOIA). In response
to a FOIA request, the LITC Program Office will release these forms
after appropriate redactions to ensure confidentiality of taxpayer
information.

13424-J (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

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Page 5
Donated equipment may be included in the matching funds column and
must be valued at the fair market value of the property at the time of the
donation. In the explanation, identify:
• The equipment that will be purchased or donated;
• Whether the associated costs will be paid using federal or matching
funds; and
• The source of the matching funds.
If there will be third-party in-kind contributions of equipment, identify:
• The equipment;
• The donor; and
• How the valuation was determined.

• The type of expense;
• Whether the cost was paid using federal or matching funds; and
• The source of the matching funds.
The explanation must also disclose the rate or rates that will be used to
value volunteer in-kind services and the number of volunteer hours that
will be provided, categorized by the type of service or volunteer, as
appropriate. See Publication 3319 Section IV.E.iii, Meeting Matching
Funds Requirements, Determining the Value of Volunteer Services. The
total amount for other expenses must equal the amount entered on line 6
(h) of SF-424A.

I. Total Direct Charges

The total amount for equipment must equal the amount entered on
SF-424A, line 6(d).

E. Supplies
This expense category is used to report the cost of supplies and equipment
costing less than $5,000 that will be used in operating the LITC. Donated
supplies may be included in the matching funds column and are valued at
the fair market value of the property at the time of the donation. In the
explanation, identify:
• The supplies to be used;
• Whether the associated costs will be paid using federal or matching
funds; and
• The source of the matching funds.
If there are third-party in-kind contributions of supplies, identify:
• The supplies;
• The donor; and
• How the valuation was determined.
The total amount for supplies must equal the amount entered on line 6
(e) of SF-424A.

F. Contractual
Report the budgeted cost of rent, utilities, and other contracted items or
services that will be used in operating an LITC program. Donated space
may be included as matching funds and the value assigned may not
exceed the fair rental value of comparable space. The explanation should
identify:
• The nature of the expense;
• Whether the associated costs will be paid using federal or matching
funds; and
• The source of matching funds.
If a contracted item or service pertains to other programs in addition to
LITC activities, only the portion directly attributable to LITC activities may
be allocated to the LITC program. The narrative must explain the
methodology used to apportion costs between the LITC activities and
other programs. The total amount for Contractual must equal the amount
entered on SF-424A, line 6(f).
Necessary and reasonable expenses that support LITC activities as well
as functions of the organization should be allocated and charged as a
direct cost of award funds if it is practical to separate the portion of the
expense allocable to LITC activities. The determination of whether it is
practical or reasonable to allocate expenses directly in proportion to use
depends on several factors, including the size of the organization running
the LITC, size and number of other functions the organization operates,
and the amount of the expense.

G. Construction
This category is not applicable to this grant. No expenses are allowed.

The total of the direct charges is the sum of lines A – H for each column.
The total amount for Total Direct Charges must equal the amount entered
on line 6(i) of SF-424A.

J. Indirect Charges
Report indirect costs not directly related to the LITC program, but incurred
as part of the general overhead and administration of the sponsoring
organization. Necessary and reasonable expenses that support LITC
activities as well as functions of the organization should be allocated and
charged as a direct cost of award funds if it is practical to separate the
portion of the expense allocable to LITC activities. The determination of
whether it is practical or reasonable to allocate expenses directly in
proportion to use depends on several factors, including the size of the
organization operating the LITC, size and number of other functions the
organization operates, and the amount of the expense. The Uniform
Guidance defines indirect costs as:
[T]hose costs incurred for a common or joint purpose benefitting more
than one cost objective, and not readily assignable to the cost
objectives specifically benefitted, without effort disproportionate to the
results achieved. (2 CFR § 200.56.)
For example, an organization has a $5,000 expense that supports LITC
activities and two other programs the organization operates. Suppose the
organization can spend an additional $100 in administrative costs to
accurately allocate the $5,000 among the three programs in proportion to
the benefit each received. In that case, the allocation is reasonable and
the organization should perform the allocation and charge the portion of
the $5,000 that is allocable to LITC activities as a direct cost.
Now suppose the organization has a $5,000 expense that supports LITC
activities and two other programs the organization operates, but to
properly allocate the $5,000 among the three programs in proportion to
the benefit each received, it would cost the organization an additional
$2,000 in administrative costs. In that case, direct allocation of the cost is
not cost-effective, and the organization can choose to account for the
$5,000 expense as an indirect cost. The organization then apportions the
total indirect costs (i.e., the indirect cost pool) to each of the benefiting
programs using a method that is consistent, reasonable, auditable, and in
accordance with generally accepted business practices.
The Uniform Guidance in section 200.414(b) recognizes that because of
the diverse characteristics and accounting practices of nonprofit
organizations, it is not possible to specify the types of cost which may be
classified as indirect costs in all situations. The purpose of the federal
award is the determining factor in distinguishing direct from indirect costs,
rather than the nature of the goods and services expensed.
Typical indirect expenses may include:
•
•
•
•
•

Salaries and wages of administrative and support staff;
Related employee benefits;
Facility occupancy costs (e.g., utilities, security, maintenance);
Office supplies; and
Legal and auditing charges.

H. Other Expenses
Report all other direct costs that will be incurred in operating the LITC
program that are not properly included in categories A through G. The
value of volunteer in-kind services is included in this category as matching
funds. The explanation should identify:

Catalog Number 57758V

114

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form

13424-J (Rev. 5-2018)

APPENDIX A

Page 6

An employee of the grantee may not be treated as a volunteer for
purposes of valuing in-kind services. For example, suppose an LITC pays
an employee an hourly wage to work at the LITC three days a week, and
the employee chooses to spend an additional two days each week
volunteering at the LITC. In the example, the LITC may charge the
employee’s wages as an expenditure of federal or matching funds, but it
cannot apply the value of the two days spent volunteering as a
contribution to help meet the matching fund requirement.

Full-Time Equivalent Calculation
The following examples demonstrate how to calculate FTE and determine
the portion attributable to matching funds.

Example FTE Calculations
ABC Legal Services LITC computes a 1.0 FTE based on a 40-hour work
week (2,080 hours per year).
Example: Clinic Director/(QTE) – John Fordham, Esq.
John works full-time at ABC Legal Services. He will spend 32 hours per
week on LITC grant activities, for an annual total of 1,664 hours, making
John a 0.80 FTE (1,664/2,080) for purposes of the LITC grant. John’s
annual salary is $89,000. Since John’s time spent on LITC grant activities
is equivalent to 0.80 FTE, he will receive $71,200 of his total salary
($89,000) for his work in the LITC. This is calculated by multiplying his
FTE annual salary of $89,000 by 0.80 for a total of $71,200 ($89,000 x
0.80 = $71,200). From the $71,200 in compensation for work on LITC
activities, $50,000 will be paid from LITC grant funds (federal funds), and
$21,200 from operating funds. Thus, a maximum of $21,200 may be
classified as matching funds.

VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

www.irs.gov

• Will not be used as matching funds for any other federal program;
and
• Will not be funds received from any other federal grant unless
specifically authorized by statute to be eligible as matching funds.

VI
VII
APPENDIX A

Catalog Number 57758V

The clinic must state explicitly that matching funds to be provided to the
LITC program:

Under § 200.414(f) of the Uniform Guidance, a de minimis rate of ten
percent of MTDC is available for organizations that have never had a
negotiated ICRA. This is a simple, straightforward option for award
recipients without substantial experience managing grant funds. An
organization that elects to use the de minimis rate must use the rate for all
federal awards it receives, and may use such rate indefinitely, or may
choose to negotiate an ICRA at any time.

• A list of all sources of matching funds;
• The amount of matching funds broken down by source; and
• The methodology used for any calculations.

De Minimis Ten Percent Indirect Cost Rate

Complete this section by providing a narrative that includes:

III

Organizations that apply an ICRA to determine the portion of indirect
costs allocable to a federal award must carefully separate direct costs
from costs classified as indirect in the ICRA, and the ICRA must set forth
cost items included in the rate. Indirect costs are then calculated by
applying the negotiated rate against the direct cost base. Costs
accounted for as indirect costs in the ICRA may not be expensed as direct
costs (i.e., double-dipping). For example, if a clinic is part of a larger
organization that has an ICRA and the rental cost of the facility in which
the clinic operates is included in the negotiated rate, then the clinic may
not include the facilities cost under the Contractual expense category.

Matching Funds

IRS does not negotiate indirect cost rate agreements but will accept a
negotiated (ICRA) approved by another federal agency.

Please note matching funds must be directly allocable to LITC activities
and may not include indirect costs.

VIII

For nonprofits, the federal agency with the largest dollar value of federal
awards with an organization will be designated as the cognizant agency
for indirect costs for the negotiation and approval of the indirect cost rates
(unless different arrangements are agreed to by the federal agencies
concerned), and, where necessary, other rates such as fringe benefit and
computer charge-out rates. Once an agency is assigned cognizance for a
particular nonprofit organization, the assignment will not be changed
unless there is a shift in the dollar volume of the federal awards to the
organization for at least three years. For more information, see 2 CFR
200, Appendix III, Indirect (F&A) Costs Identification and Assignment, and
Rate Determination for Nonprofit Organizations, paragraph C.2.a.

If a clinic charges indirect costs based on an approved ICRA, a copy of
the agreement must be submitted along with Form 13424-J, Detailed
Budget Worksheet and Narrative. See Publication 3319, Sections III.B - C.

VII

For Institutes of Higher Education (IHEs), cost negotiation cognizance is
assigned to the Department of Health and Human Services (HHS) or the
Department of Defense's Office of Naval Research (DOD), normally
depending on which of the two agencies (HHS or DOD) provides more
funds to the educational institution for the most recent three years. In
cases where neither HHS nor DOD provides federal funding to an
educational institution, the cognizant agency for indirect costs assignment
must default to HHS. For more information, see Appendix III of the
Uniform Guidance, Indirect (F&A) Costs Identification and Assignment,
and Rate Determination for Institutions of Higher Education (IHEs),
paragraph C.11. In cases where neither HHS nor DOD provides federal
funding to an educational institution, the cognizant agency for indirect
costs assignment must default to HHS. Once an agency is assigned
cognizance for a particular nonprofit organization, the assignment will not
be changed unless there is a shift in the dollar volume of the federal
awards to the organization for at least three years.

MTDC means all direct salaries and wages, applicable fringe benefits,
materials and supplies, services, travel, and up to the first $25,000 of
each subaward (regardless of the period of performance of the subawards
under the award). MTDC excludes equipment, capital expenditures,
charges for patient care, rental costs, tuition remission, scholarships and
fellowships, participant support costs, and the portion of each subaward in
excess of $25,000. Other items may only be excluded when necessary to
avoid a serious inequity in the distribution of indirect costs, and with the
approval of the cognizant agency for indirect costs. See 2 CFR § 200.68.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Obtaining an ICRA is a complex process that requires preparing and
submitting an indirect cost rate proposal(including supporting schedules
and documentation), and may take several months or even years to
establish a final rate. A cognizant agency for indirect costs means the
federal agency responsible for reviewing, negotiating, and approving cost
allocation plans or indirect cost proposals developed under 2 CFR Part
200 on behalf of all federal agencies. See 2 CFR § 200.19.

Modified Total Direct Costs (MTDC)

Negotiated Indirect Cost Rate Agreements and Cognizant
Agencies

If the clinic elects to use the ten percent de minimis rate to charge
indirect costs on all federal awards, no facilities and administration costs
may be charged as direct costs.

Once the organization has classified expenses as either direct or indirect,
the organization must determine how to allocate the indirect costs amongst
the programs that they benefit, so that LITC funds do not subsidize the
indirect costs of other programs or functions of the organization. To
calculate the amount of federal funds allocable to indirect costs, the
organization may use a negotiated indirect cost rate agreement (ICRA)
approved by the organization’s cognizant agency. If the organization has
never obtained a negotiated indirect cost rate, it may elect to apply the de
minimis rate of ten percent. See Publication 3319 for additional guidance.

Form

13424-J (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

115

Page 7
Example: Paralegal – Alice Gonzaga
Alice works part-time for ABC Legal Services, for a total of 1,040 hours.
Annually she will spend a total of 832 hours on LITC grant activities,
making Alice a 0.4 FTE (832/2,080) for purposes of the LITC grant. Alice
is paid $22 per hour. She receives total annual compensation of $22,880
(1,040 x $22); $18,304 of which will be compensation for her work in the
LITC. Alice’s compensation will be comprised of $10,000 paid from LITC
grant funds (federal funds), and $8,304 (matching funds) paid from XYZ
Private Foundation funds. The remaining compensation of $4,576 is for
non-LITC work and therefore is not eligible match.
Example: Intake – Ruth Washington
Ruth works full-time at ABC Legal Services. She will spend 18.4 hours
per week on LITC grant activities, for an annual total of 957 hours, making
Ruth a 0.46 FTE (957/2,080) for purposes of the LITC grant. Ruth is paid
$15 per hour. She receives total annual compensation of $31,200 (2,080
x $15). Ruth’s compensation will be comprised of $14,355 paid from LITC
grant funds (federal funds), and $16,845 for non-LITC work is paid from
operating funds. None of Ruth’s compensation may be classified as
matching funds, because all of her time spent on LITC grant activities is
compensated using LITC grant funds.
Example: Receptionist – Debra Chapman
Debra works full-time at ABC Legal Services. She provides administrative
and clerical support to three programs including the LITC program. Debra
will spend one-third of her time on LITC activities, making her a one-third
FTE for purposes of the LITC grant. Debra’s annual salary is $30,000, so
$10,000 (1/3 x $30,000) of her annual salary is allocable to LITC
activities. The $10,000 allocable portion will be paid using $6,000 from
LITC grant funds (federal funds), and $4,000 paid from private cash
contributions. Thus, a maximum of $4,000 may be classified as matching
funds.

Catalog Number 57758V

116

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form

13424-J (Rev. 5-2018)

APPENDIX A

Form 13424-J
(May 2018)

Department of the Treasury - Internal Revenue Service

Match

12/31/2019

Total

80,355

33,504

113,859

1,259

21,513

22,772

2,168

1,845

11,814

26,253

97,097

178,711

C. Travel

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

B. Fringe Benefits

Federal

1/1/2019

A. Personnel

From

Grant Period

Name of Low Income Taxpayer Clinic
ABC LITC
Expense Categories

OMB Number
1545-1648

Detailed Budget Worksheet

D. Equipment
E. Supplies
F. Contractual
G. Construction
H. Other Expenses

J. Indirect Charges

11,386

K. Totals

93,000

11,386
97,097

190,097

VIII

81,614

VII

I. Total Direct Charges

II
III
IV
V
VI
VII
APPENDIX A
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 57758V

www.irs.gov

Form

13424-J (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

117

Page 2

Detailed Budget Narrative Explanations
A. Personnel
Note: ABC Legal Services LITC computes a 1.0 FTE based on a 40-hour work week (2,080 hours per year).
Clinic Director/QTE – John Fordham, Attorney - .80 FTE Annual Salary $89,000 x 0.80 = $71,200. Federal: $50,000 Match: $21,200 ABC
Operating Funds (Legal Service Corporation, LSC).
Paralegal – Alice Gonzaga - .4 FTE - $22/hr x 832 hrs = $18,304. Federal:$10,000 Match: $8,304 XYZ Private Foundation funds.
Intake – Ruth Washington - .46 FTE - $15/hr x 957 hrs = $14,355. Federal: $14,355 Match:$0.
Receptionist – Debra Chapman – 1/3 FTE – Annual Salary $30,000 x 1/3 = $10,000. Debra will provide administrative and clerical support to 3
programs including the LITC program. Her time is allocated as 1/3 to each program. Federal: $6,000 Match: $4,000 XYZ Private Foundation funds.
Federal: $80,355 Match: $33,504 ($21,200 ABC Operating Funds/LSC, $12,304 XYZ Private Foundation funds)
B. Fringe Benefits
Fringe Benefits are 20% of wages of $113,859.
Federal:$1,259 Match: $21,513 XYZ Private Foundation funds.

C. Travel
Local travel to conduct educational and outreach activities. $60 parking. $305 mileage (570 miles at $.535 per mile).
$1,800 of travel to LITC Conference. $1,000 Hotel. $553 Air fare. $200 MI&E. Travel to and from airport $50 Taxi.
Federal: $0 Match: $2,168 ($60 + $305 + $1800 + $1000 + $553 + $200 + $50) XYZ Private Foundation funds.

D. Equipment
N/A

E. Supplies
ABC Legal Services uses a full-time equivalent (FTE) method to allocate certain direct shared expenses, including Supplies, Telephone and Internet,
and 2 CFR § 200.501 Audit Cost. Under this method, the allocation percentage is determined by dividing the FTEs of employee time devoted to the
LITC program by the total FTEs available in the ABC Legal Services organization. The LITC program staffing will be 2 FTEs (.80 FTE for John
Fordham + .4 FTE for Alice Gonzaga + .46 FTE for Ruth Washington + .33 FTE for Debra Chapman = 2 FTEs). Total FTEs in the ABC Legal
Services organization is 40 FTEs. The ratio of shared expenses is estimated at 5% (2 / 40).
Total cost of supplies for the organization is estimated to be $36,900 and will include the cost of laptop computers, printers, copy paper, toner, pens,
pencils, envelopes, postage, etc.
$36,900 x 5% = $1,845
Federal: $0 Match: $1,845 XYZ Private Foundation funds.
F. Contractual
Total telephone and internet shared cost is estimated to be $35,880.$35,880 x 5%(FTE allocation) = $1,794. The organization's total audit cost (a
shared expense) is estimated to be $20,400. $20,400 x 5% (FTE allocation)= $1,020. Advertising costs – These costs will be incurred solely to
publicize the LITC program. Planned advertising for LITC representation and education services are estimated to be $3,000.
Rent – Facilities costs are generally included in the Indirect Cost Rate Agreement. However, the organization will be renting off-site space at
Neighborhood Drop-in, a community based organization, solely to conduct weekly intake. The cost of the space is $500 per month. $500 x 12 mo =
$6,000.
Federal: $0 Match: $11, 814($1,794 + $1,020 + $3,000 + $6,000) XYZ Private Foundation funds.

Catalog Number 57758V

118

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form

13424-J (Rev. 5-2018)

APPENDIX A

Page 3
G. Construction

I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

H. Other Expenses
Third-party in-kind contributions:
Representation services: $200/hr x 90 hrs = $18,000.
Non-representation services:
Volunteer attorneys will contribute services including research, consultations, and review of educational materials. Valuation rate is the same as pay
rate for staff attorney John Fordham. ($42.79/hr + $8.56/hr fringe) = $51.35/hr x 95 hrs = $4,878.
A bilingual Enrolled Agent will provide services including ESL consultations and review of educational materials. Valuation rate is consistent with
those paid for similar work in the labor market and were determined using BLS information for the locality plus reasonable fringe. ($22.50/hr +
$4.50/hr fringe) = $27/hr x 75 hrs = $2,025.
Law students will represent taxpayers before the IRS pursuant to a special appearance authorization. Valuation rate is $18/hr which represents 35%
of the staff attorney's pay rate, including fringe. (Note: students are not permitted to use the $200/hr rate available to other qualified representatives.)
$18/hr x 75 hrs = $1,350.
Federal: $0 Match: $26,253 ($18,000+$4,878+$2,025+$1,350) Third Party In-Kind
I. Total Direct Charges

VII
VIII
II
III

J. Indirect Costs
$113,859 x 10% = $11,386
Federal: $11,386
(Please note for this example the MTDC only takes into consideration the direct salary costs for LITC staff $113,859. Additional items such as
fringe benefits supplies and materials and travel directly attributable to the work of the grant could also be utilized in calculating the MTDC if it can
be shown they are direct costs of performing work under the LITC grant. See Section IV.E. ii. "Direct v. Indirect Expenses," Publication 3319
"2019 LITC Grant Application and Guidelines. )

IV
V
VI
VII
APPENDIX A

Matching Funds
Total matching funds will be $97,097 from the following sources:
$49,644 cash from XYZ Private Foundation
$21,200 cash from ABC Corp Operating Funds (LSC)
$26,253 third party in-kind
These funds will not be used as matching funds for any other federal program.

VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 57758V

www.irs.gov

Form

13424-J (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

119

Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative
Purpose
This form is used to report background information about the applicant, details about the Program Performance
Plan, and information for a Civil Rights Review. The Program Office uses the information reported on this form
to determine applicant eligibility. The information collected this form will be closely evaluated when reviewing
and scoring the grant application. Please follow the instructions carefully and report all information completely
and accurately. A complete response means an entry must be provided for each field.

Who Must Complete This Form
All organizations submitting a Full Grant Application must complete this form. NCC Requests do not need to
include Form 13424-M, but must include a Project Abstract to update program information previously supplied
in the Full Grant Application.

120

LOW INCOME TAXPAYER CLINIC

APPENDIX A

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

VIII

III

VI
VII
APPENDIX A

VIII

APPENDICES

GLOSSARY
GLOSSARY
INDEX
INDEX

121

LOW INCOME TAXPAYER CLINIC

122

LOW INCOME TAXPAYER CLINIC

APPENDIX A

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

VIII

III

VI
VII
APPENDIX A

VIII

APPENDICES

GLOSSARY
GLOSSARY
INDEX
INDEX

123

LOW INCOME TAXPAYER CLINIC

124

LOW INCOME TAXPAYER CLINIC

APPENDIX A

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

VIII

III

VI
VII
APPENDIX A

VIII

APPENDICES

GLOSSARY
GLOSSARY
INDEX
INDEX

125

LOW INCOME TAXPAYER CLINIC

126

LOW INCOME TAXPAYER CLINIC

APPENDIX A

COMPLETING THE PROJECT ABSTRACT IN GRANT SOLUTIONS
Purpose
I

The Project Abstract allows grantees that have been awarded a multi-year grant to update information reported
on the original Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative. The Project Abstract
is used to report numerical goals, material changes to the program plan, and to provide the civil rights statement,
which is required annually.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Who Must Complete This Form
Only grantees submitting a NCC Request must complete and submit a Project Abstract through
www.grantsolutions.gov. The Project Abstract must contain the following information regarding the grant year
for which the NCC Request is being submitted.
The Project Abstract starts as a completely blank document. The grantee must provide responses to Items I, II,
and III, including each subpart. There is no need to reprint the full text below in the Project Abstract.
I. Numerical Goals

VII

List separately numerical goals for each of the following i-iv:
i. New representation cases to be opened during the reporting period (see Form 13424-K, line 1B);

VIII

ii. Consultations (see Form 13424-A, line 6C);

iii. Educational activities to be conducted (see Form 13424-A, line 2D); and
iv. Taxpayers to be reached in educational activities (see Form 13424-A, lines 3A and 3B).

III

II. Changes to the Program Plan
IV
V

Enter a description of any material changes to the description of the Program Plan reported on the
Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative, submitted with your original
multi-year grant application. If no changes are anticipated, please indicate this in the space provided.

VI
VII
APPENDIX A

III. Civil Rights Statement

VIII

This information is mandatory and required of every applicant annually. If the applicant does not
have any information to report on these questions, a negative response is required. The applicant must
provide the following information as a condition of eligibility under the LITC Program. You must
respond to each item by entering Yes or None for each subpart i–vi, listed below. For each affirmative
answer, provide the detail requested for that subpart.

APPENDICES

i. A list of active lawsuits or complaints naming the applicant which allege discrimination on the
basis of race, color, national origin, age, sex, or disability with respect to service or benefits being
provided. The list should include the date the lawsuit or complaint was filed; a summary of the
allegation; and the status of the lawsuit or complaint, including whether the parties to a lawsuit have
entered into a consent decree.

GLOSSARY
GLOSSARY
INDEX
INDEX

ii. A description of all pending applications for financial assistance and all financial assistance currently
provided by other federal agencies.
iii. A summary of all civil rights compliance review activities conducted in the last three years. The
summary shall include the purpose or reason for the review; a summary of the findings and

LOW INCOME TAXPAYER CLINIC

127

recommendations of the review; and a report on the status or disposition of such findings and
recommendations.
iv. A description of how the needs of individuals with limited English proficiency (LEP) or individuals
who may need a reasonable accommodation will be addressed in order to access services.
v. A statement that all required records will be compiled and maintained, as appropriate, by the
applicant according to the agency’s guidelines.
vi. A statement that the applicant agrees to display Publication 4053, Civil Rights Poster (provided by
the IRS).

Example Project Abstract:
I. Projected Numerical Goals for 2019:
i. 200 new representation cases;
ii. 40 consultations;
iii. 10 educational activities;
iv. 200 taxpayers educated through planned activities.
II. Changes to the Program Plan
Beginning on January 5, 2019, Saturday operating hours will be extended from 9am–1pm to 9am–2pm.
As of February 2019, Jane Doe will be designated as QBA.
III. Civil Rights Statement
i. Active lawsuits or complaints naming the applicant which allege discrimination on the basis of race,
color, national origin, age, sex, or disability with respect to service or benefits being provided: None
ii. Pending applications for financial assistance: Legal Services Corporation, Basic Field Grant
$100,000
Financial assistance currently provided by other federal agencies: State Legal Services, Operations
Grant: $200,000
iii. Equality and Inclusion Committee (Committee) annually reviews the policies governing employee
supervision and how services are delivered to clients for compliance with civil rights protections.
The Committee issues a written report with recommendations to the Board of Directors. The
Committee’s most recent report indicated that the racial and ethnic diversity of the LITC’s staff
fairly represents the local population the LITC serves.
iv. JFT has bi-lingual staff who speak English and Spanish and English and French. The clinic uses
telephone interpretation for other languages and a translation service for required documents
and correspondence in other languages. The clinic notifies applicants of the right to reasonable
accommodations on the reverse of its investigative retainer and client retainer.
v. JFT asks applicants to voluntarily report race, ethnicity, gender, preferred language, and disability.
The applicant’s replies are recorded in the electronic case management system. Applicant and client
records are retained for six years pursuant to the state licensing rules.
vi. The applicant agrees to display Publication 4053, Civil Rights Poster (provided to by the IRS).

128

LOW INCOME TAXPAYER CLINIC

APPENDIX B

I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

VIII

III

VI
VII
APPENDIX B

VIII

APPENDICES

GLOSSARY
GLOSSARY
INDEX
INDEX

129

LOW INCOME TAXPAYER CLINIC

FORMS FOR REPORTING LITC GRANTEE ACTIVITIES

REPORTING FORMS
All reports are to be submitted through grantsolutions.gov. The forms contained in this Appendix are provided
for reference purposes only.
Due dates for reporting forms are:

Interim report: July 30, 2019

Year-End report: April 1, 2020

Timely submission of reporting forms is one criteria for evaluating clinic performance. If a clinic anticipates
needing additional time to submit a report, the clinic should address this with the advocacy analyst assigned to the
clinic as far in advance of the due date as is possible and should be an uncommon practice.
Content of the reports are subject to and may be released under the Freedom of Information Act (FOIA). For
this reason, it is important that the clinic when reporting client success stories or emerging issues be careful to
ensure that the taxpayer cannot be identified by the details supplied in the report. In response to a FOIA request,
the LITC Program Office will release these forms after having ensured that the clinic has properly redacted
information in order to protect the confidentiality of taxpayer information.
In addition to the instructions provided in this appendix, the Program Office routinely provides report training
to help ensure that the report is completed fully and accurately. Training is announced through the LITC Toolkit
and usually takes place several weeks in advance of the report due date.
Specific questions about how to report an item or activity of the clinic can be raised to the advocacy analyst
assigned to the clinic. For questions or problems working within grantsolutions.gov contact Bill Beard at
[email protected].

LITC GRANTEE REPORTING REQUIREMENTS
LITC grant award recipients are required to submit the following forms twice per grant year, as an Interim and a
Year-End report:
qqStandard Form 425, Federal Financial Report;*
qqForm 13424-A, Low Income Taxpayer Clinic (LITC) General Information Report;
qqForm 13424-B, Low Income Taxpayer Clinic (LITC) Case Issues Report;
qqForm 13424-C, Advocacy Information Report;
qqForm 13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report;
qqForm 13424-L, Statement of Grant Expenditures; and
qqForm 13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative.

* The Office of Management and Budget (OMB) requires completion of Standard Form 425. To assist applicants
in completing this form, detailed instructions specifically tailored to the LITC program are provided.

130

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Reporting Period

Clinics are required to report on LITC activities twice for each grant year. The grant year is January 1 through
December 31 for the year for which the grant was awarded. An Interim report is required to report activities
conducted for the period from January 1 through June 30; a Year-End report is required to report activities
conducted for the entire grant year. Check the appropriate box at the beginning of the form indicating for which
period the report is being completed.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Accessing Reporting Forms on Grantsolutions.gov
Log into Grant Solutions and the system will navigate to the screen below. Verify the budget period is correct
and click on the link, “Progress Reporting.” Click on “Show Expired Grants” if the desired grant period does not
appear on the screen.

VII
VIII
II
III
IV

The system will navigate to the screen below.

V
VI
VII
APPENDIX B
VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

131

To access a reporting form:
i.

Step 1 is pre-populated to indicate Low Income Taxpayer Clinics grant (no action required);

ii.

Step 2 is pre-populated to indicate the grantee organization (no action required);

iii.

Step 3 is pre-populated with the default All Report Types. To search for a particular form, click on the dropdown for “Report Name” and select the specific form (only forms matching the selected reporting form
will be displayed);

iv.

Step 4 is pre-populated with the project period (no action required);

Step 5 allows a user to sort by clicking on the column name. Click on a radio button to select a form;

vi.

Step 6 requires the user to click on the drop down arrow and select either: “New/Edit/Revise” or “View/
Print/Status/Approve”;

vii.

Step 7 requires the user to click on “Enter” to open the form that was selected;

viii.

Users can also sort by clicking on the title of the column; and

ix.

132

For each report, please ensure the correct reporting period is selected. This page lists the reporting forms
for each year of a multi-year grant and for each reporting period, Semi-Annual (Interim) or Annual
(Year-End). For instance, for 2019 reporting forms, the clinic should be sure to select the form that
corresponds to the correct period, either 01/01/2019–6/30/2019 (Semi-Annual) for the Interim report or
01/01/2019–12/31/2019 (Annual) for the Year-End report.

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Instructions for Standard Form 425, Federal Financial Report
Purpose
I

Standard Form 425, Federal Financial Report, is used to report the amount of federal grant funds received and
spent during the grant period and the amount of matching funds spent during the grant period. In preparing this
form, adhere to existing guidelines in 2 CFR Part 200 and Publication 3319, which explain allowable costs. See
Publication 3319, 2 CFR § 200.306, and 2 CFR § 1000.306 for guidance on matching funds.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

About the Instructions
The instructions for completing Standard Form 425, Federal Financial Report, contained in this Publication
(Publication 3319) are intended as a guide for submitting LITC grant reports. Standard instructions are available;
however, the standard instructions are written to accommodate all recipients’ federal funds, and do not contain
any instructions specific to the LITC grant. Standard instructions are available at www.whitehouse.gov/sites/
default/files/omb/grants/standard_forms/ffr_instructions.pdf.

VII

These instructions relate only to preparation of Standard Form 425 as part of the Interim and Year-End
reports. For instructions on preparing quarterly submissions of Standard Form 425 in the Division of Payment
Management (DPM), visit www.dpm.psc.gov.

VIII

Accessing the Form

To access Standard Form 425 on the Grant Solutions website, click on the “FFR” link on the Grants List screen.

III
IV
V
VI
VII
APPENDIX B

The system will navigate to the screen below. Click on the “start” link.

VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

133

Completing the Form
Complete all the fields contained in the form, following the guidance listed below:
Item

134

Field Name

Information

Federal Agency and
Organizational Element to
Which Report is Submitted

Enter Taxpayer Advocate Service.

Federal Grant or Other
Identifying Number
Assigned by Federal Agency

Enter the grant award number found on your Notice of Award for grant year 2019.

Recipient Organization

Enter the name and complete address of the recipient organization including zip code.

4a.

DUNS Number

Enter the recipient organization’s Data Universal Numbering System (DUNS) number.

4b.

EIN

Enter the recipient organization’s Employer Identification Number (EIN).

Recipient Account Number
or Identifying Number

Enter N/A.

Report Type

Mark Semi-Annual for the Interim report or Annual for the Year-End report.

Basis of Accounting (Cash/
Accrual)

Select either Cash or Accrual to indicate which basis was used for recording
transactions related to the award(s) and for preparing this Standard Form 425. See
Glossary for an explanation of each basis of accounting.

Project/Grant Period,
From/To (Month, Day, Year)

Enter 01/01/2019 to 12/31/2019.

Reporting Period End Date
(Month, Day, Year)

Enter 06/30/2019 for the Interim report or 12/31/2019 for the Year-End report.

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Item

Information

Transactions

Enter cumulative amounts from date of the beginning of the award through the end date of the
reporting period specified in line 9. Use lines 10a through 10o.

Field Name

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

10.

VII

Federal Cash
Enter the amount of federal cash that the grantee has drawn down from the 2019 grant award
in the DPM account during the reporting period.

10b.

Cash Disbursements

Enter the amount of federal cash reported on Line 10a that has been disbursed to pay or
reimburse LITC expenses during the reporting period.

10c.

Cash on Hand

Enter the amount of Line 10a minus Line 10b.

Cash Receipts

VIII

10a.

III

Note: Line 10c cannot be a negative number because a grantee cannot have disbursed more
federal cash than it has drawn down.
Federal Expenditures and Unobligated Balance

10e.

Federal share of
expenditures

Enter the amount of federal funds expended during the reporting period. See Glossary for an
explanation of the cash and accrual bases of accounting.

10f.

Federal share of
unliquidated obligations

Enter the amount of federal funds that represent expenses incurred but not yet paid as of the
end of the reporting period, if not reported on line 10e.

VI
VII
APPENDIX B

Enter the total amount of LITC grant funds awarded for 2019.

Total Federal funds
authorized

10d.

Note: Cash basis reporters may need to enter an amount on this line; for accrual basis
reporters, the amount on this line will likely be zero.
10g.

Total Federal share

Enter the sum of lines 10e and 10f.

10h.

Unobligated balance of
Federal funds

Enter the amount of line 10d minus line 10g.

VIII

Note: On the Year-End report, the amount shown on this line represents unspent grant funds
and must be explained in the narrative on Form 13424-L, Statement of Grant Expenditures.

Recipient Share
For purposes of the LITC Program, the term “recipient share” has the same meaning as the
term “matching funds.” Enter the amount of matching funds required for grant year 2019.
This amount should be the same as line 10d because the LITC grant requires a dollar-for-dollar
match.

10j.

Recipient share of
expenditures

Enter the amount of matching funds expended during the reporting period specified on line 9,
including the value of all third party in-kind contributions.

10k.

Remaining recipient share
to be provided (Line 10i
minus Line10j)

Enter the amount of line 10i minus line 10j. If recipient share in line 10j is greater than the
required match amount in line 10i, enter zero.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
GLOSSARY
INDEX
INDEX

Total recipient share
required

APPENDICES

10i.

135

Item

Field Name

Information

Program Income
10l.

Total Federal program
income earned

Enter the amount of any nominal fees or other program income earned during the reporting
period. Do not report any program income here that is being allocated as part of the
recipient’s match amount included in Line 10j.

10m.

Program income expended
in accordance with the
deduction alternative

Enter zero.

10n.

Program income expended
in accordance with the
addition alternative

Enter the amount of program income that was added to funds committed to the total project
costs and expended to further eligible project or program activities.

10o.

Unexpended program
income (Line 10l minus Line
10m or Line 10n)

Enter the amount of line 10l minus line 10m and line 10n. This amount equals the program
income that has been earned but not expended, as of the reporting period end date.

11.

Indirect Expense

Enter cumulative amounts from date of the inception of the award through the end date of the
reporting period specified on line 9.

Note: Only grantees using an indirect cost rate should complete this section.
Otherwise, skip to line 12.

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11a.

Type

State whether the type of indirect cost rate is Provisional, Predetermined, Final, Fixed, or de
minimis.

11b.

Rate (%)

Enter the indirect cost rate in effect during the reporting period.

11c.

Period From/ Period To

Enter the beginning and ending effective dates for the rate.

11d.

Base

Enter the amount of the base against which the rate(s) was applied.

11e.

Amount Charged

Enter the amount of indirect costs charged during the time period specified. (Multiply 11b by
11d).

11f.

Federal Share

Enter the amount of grant funds awarded for the reporting period that were allocated to
indirect costs.

12.

Remarks

If needed, enter See attached statement and attach additional pages containing explanations
or additional information.

13.

Certification

Enter the title, contact information, and signature of the authorized certifying official on line 13.

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Submit Standard Form 425
When the form is ready to submit do the following:
a check mark in the box next to the “I verify” statement;
on the “submit” button; and

nnClick

on the “close” button to exit the form.

nnClick

nnPut

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Instructions for Form 13424-A, LITC General Information Report
Purpose
Form 13424-A, LITC General Information Report, is used to report information about certain work the clinic
performed during the reporting period. This form is used to report all outreach activities, educational activities,
consultations, referrals, tax return and other document preparation, volunteer activities, work performed by
students, and professional education activities conducted during the reporting period.
The Program Office uses the information reported on this form and the other reporting forms to determine the
scope of services provided by clinics. Data is also aggregated to provide program-wide statistical information
about services provided to low income and ESL taxpayers. Please be careful to follow the instructions for this
form and to report all information completely and accurately. If additional room is necessary to provide details
about the activities reported on this form, include such details in the Program Narrative on Form 13424-N, where
appropriate.

Specific Instructions for Completing the Form
Outreach Activities
The system will navigate to the screen below when the Form 13424-A is selected on the Form Selection screen.
Report all outreach activities conducted during the reporting period in this section.

Outreach activities are efforts designed to publicize the clinic and its services. Outreach activities may involve
direct communication with taxpayers or be accomplished indirectly through other organizations or groups that
assist low income or ESL taxpayers. Examples of outreach activities include a presentation about clinic services
made to taxpayers, a campaign to distribute clinic flyers or other marketing materials to local social services
organizations, or staffing a table at a community event such as a fair, forum, or meeting to inform the public
about clinic services.
LITCs are encouraged to identify particular linguistic populations, geographic service areas, or other segments of
the low income taxpayer community in which to focus outreach efforts.

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APPENDIX B

Determine whether to record an outreach activity on line 1A, 1B, or 1C by looking to the primary intended
audience of the activity, rather than the actual attendees. Outreach activities primarily intended to reach ESL
taxpayers should be reported on line 1A, activities primarily intended to reach non-ESL taxpayers in general
should be reported on line 1B, and those intended for other organizations that assist ESL or low income taxpayers
should be reported on line 1C. Report each outreach activity only once on line 1A, 1B, or 1C.

A single outreach activity may span multiple days. For example, if a clinic staffs a booth for multiple days at
a weeklong event, that should be counted as one outreach activity. Additional details about the extent of such
efforts can be included in the Program Narrative.

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A campaign that involves sending the same or similar letters to multiple recipients should be counted as a single
outreach activity.
i. Line 1A. Report on this line the number of outreach activities conducted for ESL taxpayers;
ii. Line 1B. Report on this line the number of outreach activities conducted for non-ESL taxpayers;

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iii. Line 1C. Report on this line the number of outreach activities conducted for other organizations that
assist ESL or low income taxpayers. For example, the clinic meets with board members of a local church
in preparation for the church’s upcoming clothing drive to benefit the homeless. The clinic requests that
the church inform low income and ESL taxpayers about the clinic’s services. The clinic would record
those efforts as a single outreach activity on line 1C; and

VIII

iv. Line 1D. Report on this line the total number of outreach activities conducted during the reporting
period. The number reported on this line should equal the total of lines 1A, 1B, and 1C. A description
of the activities must be included in the Program Narrative on Form13424-N, Low Income Taxpayer
Clinic (LITC) Program Narrative Report, line 2.iv. See Publication 3319 for additional information.

II
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Educational Activities
IV

Report all educational activities conducted during the reporting period in this section.

Educational activities are programs designed to inform ESL or low income taxpayers about their rights and
responsibilities as taxpayers, as well as tax issues of particular significance to the intended audience. Educational
activities may also be conducted for other organizations that assist low income or ESL taxpayers.

VI
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APPENDIX B

To be considered an educational activity, information about a specific tax topic or topics must be conveyed to
the audience. Examples of educational activities include a presentation about tax collection issues made to ESL
taxpayers, a workshop for low income workers about how to properly complete a Form W-4 for withholding,
or the distribution to community case workers of a social services organization of written materials about EITC
eligibility rules that they can share with their clients.

VIII
APPENDICES

Determine whether to record an educational activity on line 2A, 2B, or 2C by looking to the primary intended
audience of the activity, rather than the actual attendees. Educational activities primarily intended to reach ESL
taxpayers should be reported on line 2A, activities primarily intended to reach non-ESL taxpayers in general
should be reported on line 2B, and those intended for other organizations that assist ESL or low income taxpayers
should be reported on line 2C. Report each educational activity only once on line 2A, 2B, or 2C. Do not include
any activities recorded as Outreach on lines 1A through 1D.

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i. Line 2A. Report on this line the number of educational activities conducted for ESL taxpayers;
ii. Line 2B. Report on this line the number of educational activities conducted for non-ESL taxpayers;
iii. Line 2C. Report on this line the number of educational activities conducted for other organizations that
assist ESL or low income taxpayers; and
iv. Line 2D. Report on this line the total number of educational activities conducted during the reporting
period. The number reported on this line should equal the total of lines 2A, 2B, and 2C.

i. Line 3A. Report on this line the total number of attendees at all educational activities conducted for
ESL taxpayers during the reporting period;
ii. Line 3B. Report on this line the total number of attendees at all educational activities conducted for
non-ESL taxpayers during the reporting period;
iii. Line 3C. Report on this line the total number of attendees at all educational activities conducted for
service providers during the reporting period; and
iv. Line 3D. Report on this line the total number of attendees at all educational activities conducted
during the reporting period. The system will total the sums of lines 3A, 3B, and 3C automatically in
3D; and

i. Line 4. List the topics that were covered during the educational activities reported on lines 2A through
2C. Input one title per line in section 4 and click on the “Add” button to enable additional line option.
Do not repeat the same topic on multiple lines. If a topic was presented at multiple events, you may list

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APPENDIX B

the number of times the topic was presented. For example, you may enter EITC x 4 to indicate you held
four EITC presentations during the reporting period.
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i. Line 5. List the languages, other than English, in which educational activities were conducted. Input
one language per line in section 5 and click on the “Add” button to enable additional line option.
Educational activities are intended to have attendees. Do not report the posting of educational materials to a
website or the distribution of educational materials via social media as educational activities. These activities are
properly reported on Form 13424-C, Low Income Taxpayer Clinic (LITC) Advocacy Information Report, in Part II,
Published Materials.

Consultations
Report all consultations conducted during the reporting period in this section.

VII
VIII
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IV

A consultation is 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. If a clinic undertakes representation of a taxpayer before
a court or the IRS, then that matter should not be reported on this form as a consultation, but rather reported
as a case on Form 13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report. A technical assistance
consultation is a discussion with a practitioner or other service provider designed to give brief advice about a tax
issue. For example, if a clinic staff member addresses a tax-related question for a staff member of another legal
services organization, that communication should be counted as a technical assistance consultation.

V
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APPENDIX B

i. Line 6A. Report on this line the number of consultations conducted with ESL taxpayers;
ii. Line 6B. Report on this line the number of consultations conducted with non-ESL taxpayers; and

VIII

iii. Line 6C. Report on this line the total number of consultations conducted with taxpayers during the
reporting period. The number reported on this line should equal the total of lines 6A and 6B.

APPENDICES

LOW INCOME TAXPAYER CLINIC

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i. Line 7. Report on this line the number of technical assistance consultations conducted with a
practitioner or other service provider during the reporting period. A description of the types of issues
and questions addressed in the consultations must be included in the Program Narrative on Form
13424-N, line 2.v. See Publication 3319 for additional information.

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Referrals
Report on Line 8 the number of cases reported on Form 13424-K, line 1C, for which the Taxpayer Advocate
Service (TAS) provided assistance during the reporting period.

Note: A description of the reasons for seeking TAS assistance must be included in the Program Narrative on
Form 13424-N, line 2.vi. See Publication 3319 for additional information.

Tax Returns and Other Documents

An LITC can provide assistance with a federal tax return, a claim for refund, or an Individual Taxpayer
Identification Number (ITIN) application if such assistance is necessary to resolve a dispute with the IRS or is
an ancillary part of the LITC’s ESL education. The clinic may not charge a fee (even if it is a nominal fee) for
the preparation of a tax return. 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 ).
i. Line 9A. Report on this line the number of tax returns prepared ancillary to ESL activities. Ancillary
tax return preparation must be incidental to the clinic’s primary mission and the program may only
provide such assistance if the request to do so arises from the clinic’s primary outreach and educational
activities;
ii. Line 9B. Report on this line the number of tax returns prepared to resolve a controversy; and
iii. Line 9C. Report on this line the total number of tax returns prepared during the reporting period. The
number reported on this line should equal the total of lines 9A and 9B.

i. Line 10. Report on this line the number of ITIN applications (Form W-7) prepared during the
reporting period.
Do not count returns that are prepared but not submitted to the IRS. Do not report any state tax returns that
were prepared, only federal returns.

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APPENDIX B

Volunteer Activities

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APPENDIX B

i. Line 11. Select the appropriate bubble to indicate whether the clinic maintains a pro bono panel to
which taxpayers can be referred for controversy representation;

VIII

ii. Lines 12A-F. In this section, report on the number of volunteers who provided service to the clinic
during the reporting period. Count each volunteer only once, based on the category of services the
volunteer typically provides to the clinic. For example, if an enrolled agent is multilingual and also
provides translation services, you may note that in the Program Narrative on Form 13424-N line 2.ix;
however, the clinic should only count that volunteer as either an enrolled agent or an interpreter/
translator, not both. Do not include any individuals receiving compensation from the clinic, or any
students receiving academic credit as volunteers;

APPENDICES

iii. Line 12G. Report on this line the total number of volunteers. The number reported on this line should
equal the total of lines 12A-12F and should be an accurate count of all individuals who volunteered
at the clinic during the reporting period. Only include volunteers who provided service during the
reporting period and whose hours are included on the line 13 total; and

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INDEX

iv. Line 13. Report on this line the total number of service hours provided by volunteers during the
reporting period. Form 13424-F, Volunteer/Pro Bono Time Reporting, is available on the LITC Toolkit to

LOW INCOME TAXPAYER CLINIC

143

assist you in tracking volunteer hours. Form 13424-F is for internal record keeping by the clinic only
and should not be submitted to the LITC Program Office.
Do not include time spent by any individuals receiving compensation from the clinic or any students receiving
academic credit as volunteer service hours.

Student Representation

i. Line 14. Report on this line the number of students that worked at the clinic during the reporting
period who were authorized to practice before the IRS under a special appearance authorization; and
ii. Line 15. Report on this line the number of students that worked at the clinic during the reporting
period who received academic credit for their clinic work.

Professional Education Activities
Report on accredited Continuing Professional Education (CPE) or Continuing Legal Education (CLE)
presentations conducted during the reporting period in this section.

i. Line 16. Report on this line the total number of CPE or CLE credits available through presentations
held during the reporting period. For example, if during the reporting period the clinic held three
lunchtime presentations offering one hour of CLE credit each, and one day-long presentation, offering
eight hours of CLE credit, the clinic would enter 11 on this line; and
ii. Line 17. Report the topics covered during CPE or CLE presentations. Input one title per line in
section 17 and click on the “Add” button to enable additional lines. Do not repeat topics on multiple
lines. If a topic was repeated throughout multiple presentations, you may list the number of times
the topic was presented. For example, you may enter EITC x 4 to indicate you held four CPE or CLE
presentations on the EITC during the reporting period.
Report only professional education activities dealing with issues affecting low income or ESL taxpayers.
To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms Section at the end of
this Appendix.

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APPENDIX B

Instructions for Form 13424-B, LITC Case Issues Report
Purpose
I

Form 13424-B, LITC Case Issues Report, is used to report issues worked by a clinic while representing taxpayers
in controversy cases that were open at any time during the reporting period, including cases carried over from
the previous grant year. The issues reported should relate to all cases reported on Form 13424-K, Low Income
Taxpayer Clinic (LITC) Case Information Report, line 1C. The Program Office uses the information reported
on this form and the other reporting forms to determine the scope of services provided by clinics. Data is also
aggregated to provide program-wide statistical information about services provided to low income and ESL
taxpayers. Be careful to follow the instructions for this form and to report all information completely and
accurately.

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Specific Instructions for Completing the Form

VII

A case arises from a controversy between an individual and the IRS concerning the determination, collection,
or refund of any tax, penalties, additions to tax, or interest under the Internal Revenue Code, and includes any
proceeding brought by the taxpayer under Title 26. A controversy includes a dispute related to the tax provisions
of the Affordable Care Act. A controversy does not include a federal criminal tax matter, but may include certain
civil actions arising under the Internal Revenue Code, for example those arising under Internal Revenue Code
(IRC) §§ 7431–7435.

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II

A case may involve more than one issue. An issue is counted only if the clinic undertakes representation on behalf
of the taxpayer, the issue is disputed between the taxpayer and the IRS, and the clinic takes steps to resolve the
dispute. An issue is counted and reported on this form only once for each case, regardless of the number of tax
years involved in the dispute. See Example 2 below. An issue is not counted on this form when the clinic only
discusses the issue with the taxpayer and provides advice, but does not take steps to advocate on behalf of the
taxpayer to the IRS or a court. See Example 3 below.

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Example 1: Reporting Case Issues
Clinic A represented ten taxpayers in EITC examination cases during the reporting period. Each case has
four issues in dispute: head of household filing status, dependency exemptions, child tax credit, and EITC
eligibility. Clinic A would enter 10 on lines 30, 31, 37, and 38.

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APPENDIX B
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Example 2: Reporting Case Issues
Clinic B represented a taxpayer in a collection case involving six tax years. Clinic B advocated for the
taxpayer’s accounts to be placed in currently not collectible status. Clinic B would count this case as one
currently not collectible issue on line 60, regardless of the number of tax years in dispute. (This case would
be included in the total on line 6 of Form 13424-K for cases having more than one tax year in dispute.)

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APPENDICES

Example 3: Reporting Case Issues
Clinic C represented a taxpayer in a collection case that involved negotiating with the IRS to establish an
installment agreement. In the course of the representation, Clinic C discussed with the taxpayer various
collection alternatives, including an Offer In Compromise (OIC). The installment agreement issue would be
counted as an issue and reported on line 58 because Clinic C negotiated the installment agreement on behalf
of the taxpayer. The OIC discussion would not be counted as an issue and reported online 59 because Clinic
C did not prepare or submit to the IRS an OIC on behalf of the taxpayer.

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Income Issues

Lines 1-14. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular income issue. For example, a dispute involving the amount or
classification of a taxpayer’s wages would be reported on line 1, Wages.

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APPENDIX B

Deduction Issues

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Lines 15-27. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular deduction issue. For example, a dispute involving the allowance of
an adjustment for alimony would be reported on line 15, Alimony.

Credit Issues
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APPENDIX B
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Lines 28-34. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular credit issue. For example, a dispute involving a taxpayer’s eligibility
for an adoption credit would be reported on line 34, Other Credits.

Status Issues

Lines 35-44. Report on the appropriate line the number of cases worked during the reporting period where
the taxpayer’s controversy involved the particular status issue. For example, a dispute involving the taxpayer’s
eligibility to claim head of household filing status would be reported on line 37, Filing Status.

Tax/Refund/Return/Statute of Limitations Issues

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APPENDIX B

Lines 45-52. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular tax or refund or statute of limitations issue. For example, a dispute
involving suspected fraud on the part of a return preparer would be reported on line 46, Suspected Return Preparer
Fraud.

Penalty and Addition to Tax Issues

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Lines 53-56. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular penalty issue. For example, a dispute involving the assessment of an
accuracy-related penalty would be reported on line 54, Other Civil Penalties.

VII

Collection Issues

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APPENDIX B

Lines 57-62. Report on the appropriate line the number of cases worked during the reporting period where the
taxpayer’s controversy involved the particular collection issue. For example, a dispute involving the release of a
levy on a taxpayer’s Social Security benefits would be reported on line 62, Levies.

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APPENDICES

Total. Report the total number of issues reported on lines 1 – 62.
To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms Section at the end of this
Appendix.

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Instructions for Form 13424-C, LITC Advocacy Information
Purpose
Form 13424-C, LITC Advocacy Information, is used to report information about certain advocacy work the
clinic performed during the reporting period. This form is used to report all systemic advocacy issues submitted,
written materials published, television and radio appearances made, and public service announcements aired
during the reporting period.
The Program Office uses the information reported on this form and the other reporting forms to determine the
scope of services provided by clinics. Data is also aggregated to provide program-wide statistical information
about services provided to low income and ESL taxpayers. Please be careful to follow the instructions for this
form and to report all information completely and accurately. If additional room is necessary to provide details
about the activities reported on this form, include such details in the Program Narrative.
Note: For purposes of this Form 13424-C, clinics are not required to repeat information included in the
Interim report on the Year-End report. Report advocacy work performed between January 1 and June 30 on
the Interim report, and report advocacy work performed between July 1 and December 31 on the Year-End
report.

Specific Instructions for Completing the Form

Systemic Advocacy Submissions
Report in this section all systemic issues that relate to low income or ESL taxpayers that were submitted to the
Systemic Advocacy Management System (SAMS) during the reporting period.

Include the SAMS issue number, the name of the individual who made the submission, the date of each
submission, and a brief description of the issue described in the submission. The SAMS site is available at
www.irs.gov/uac/Systemic-Advocacy-Management-System (SAMS).

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APPENDIX B

Published Materials

Report in this section all written materials published during the reporting period to educate low income or ESL
taxpayers or to bring awareness to the public about the LITC program or tax issues that affect low income or ESL
taxpayers.

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Include the posting of educational materials to a website or the distribution of educational materials via social
media. Select from the list the source where the material was published. If the publication was released in
multiple formats (i.e., in a magazine and on a website) check one box and list the other formats in the Program
Narrative on Form 13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative Report, line 2.ix.

VII

Include the author’s name, the publication date, the title of the publication or website, the title of the work, and a
brief description of the work (4,000 characters).

VIII

Click “Add” to report additional publications.

Television and Radio Appearances
III
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Report in this section all television and radio appearances produced by or featuring clinic staff and broadcast
during the reporting period to educate low income or ESL taxpayers or to bring awareness to the public about the
LITC program or tax issues that affect low income or ESL taxpayers.

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APPENDIX B
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APPENDICES

If the broadcast was released in multiple formats or on multiple channels, list the other formats in the Program
Narrative on Form 13424-N, line 2.ix.

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Include the airing dates of each segment, a reasonable estimate of the number of listeners or viewers, the topic
of the discussion or on-air piece, the names of any clinic representatives involved in the appearances, and a brief
description of the topic discussed on-air.
Click “Add” to report additional appearances.

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Public Service Announcements
Report all public service announcements (PSAs) produced by or featuring clinic staff and broadcast during the
reporting period written to educate low income or ESL taxpayers or to bring awareness to the public about the
LITC program or tax issues that affect low income or ESL taxpayers.

Include the number of times each segment aired, a reasonable estimate of the number of listeners or viewers, the
topic of the discussion or on-air piece, the names of any clinic representatives involved in the appearances, and a
brief description of the topic discussed on-air.
Click “Add” to report additional PSAs.
Television and Radio Appearances and Public Service Announcements are informational and may be educational
in nature, but they are not the same as, and should not be reported as, educational activities.
To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms section at the end of this
Appendix.

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APPENDIX B

Instructions for Form 13424-K, LITC Case Information Report
Purpose
I

Form 13424-K, LITC Case Information Report, is used to report information about the work performed by a
clinic while representing taxpayers in controversy cases that were open at any time during the reporting period,
including cases carried over from the previous grant year. The information reported should relate to all cases
reported on line 1C of this form, unless otherwise instructed. The Program Office uses the information reported
on this form and the other reporting forms to determine the scope of services provided and the breadth of work
done by clinics. Data is also aggregated to provide program-wide statistical information about services provided
to low income and ESL taxpayers. Please be careful to follow the instructions for this form and to report all
information completely and accurately.

II
I. LITC PROGRAM OVERVIEW
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Specific Instructions for Completing the Form

VII

VIII

A case is counted and reported in inventory when a taxpayer retains the clinic to represent him or her in an
advocacy capacity before the IRS or a federal court and the clinic takes steps to begin the case, including
developing a plan for advocacy. Case information continues to be counted and reported on this form each period
until the case is closed.

II
III

Note: Matters involving fact-finding or advice only are not cases; these matters are counted and reported as
consultations on Form 13424-A, Low Income Taxpayer Clinic (LITC) General Information Report.

If a taxpayer’s case requires the clinic to advocate before more than one IRS function or court or involves more
than one tax year, it is still counted and reported as a single case on Form 13424-K. The clinic can capture the
breadth of the work done in the case by including the case in the numbers reported on line 5 (cases involving
matters worked in more than one IRS function or court) or line 6 (cases involving more than one tax year) and
by reporting all of the relevant tax issues on Form 13424-B, Low Income Taxpayer Clinic (LITC) Case Issues Report.
Additional information may also be included in the Program Narrative on Form 13424-N, Low Income Taxpayer
Clinic (LITC) Program Narrative Report, line 2.ix.

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APPENDIX B
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Case Inventory
Report in this section the volume of case inventory.

i. Line 1A. Report on this line the number of cases that were worked in the previous year that remained
open as of January 1. This number should be the same as the ending case inventory reported on Form
13424-K, line 1D, of the Year-End report submitted for the previous grant year;
ii. Line 1B. Report on this line the number of new cases that were opened during the reporting period;
iii. Line 1C. The total from line 1A and 1B will be calculated automatically;
iv. Line 1D. Report on this line the number of cases closed during the reporting period; and
v. Line 1E. The system will automatically calculate the ending inventory.

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APPENDIX B

Cases Worked
Report in this section the IRS function or federal court where cases are being worked.
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If a case was open at the end of the reporting period, indicate the IRS function or federal court where the case is
being addressed as of the end of the reporting period.
If a case was closed during the reporting period, indicate the IRS function or federal court where the case was
handled immediately before closing. Each case should be counted only once during a reporting period; however, a
case that remains open beyond a single reporting period may be properly reported as being handled by a different
function from one reporting period to the next. Thus, a case may be reported as being handled by a different
function in the Year-End report than was reported in the Interim report. If a single case is being addressed by
more than one IRS function at the end of a reporting period, report that case where the primary issue is being
addressed.

The total reported in this section must equal the total number of cases worked during the reporting period as
reported on line 1C.
Example 1: Reporting Case Work
Clinic A is representing a taxpayer in a dispute involving a proposed deficiency. On May 15, Clinic A
submitted correspondence to the IRS’s Correspondence Exam unit on behalf of the taxpayer. On August
1, the IRS issued a Notice of Deficiency. On November 20, Clinic A filed a petition in the U.S. Tax Court.
On its Interim report, Clinic A would report the case on line 2E because the case was being addressed in the
Correspondence Exam unit as of June 30. On its Year-End report, Clinic A would report the case on line 2U
because the case was being addressed in the U.S. Tax Court as of December 31.
Example 2: Reporting Case Work
Clinic B is representing a taxpayer in a dispute involving eligibility for EITC for two tax years. At the close
of the reporting period, one tax year is being addressed in the U.S. Tax Court and the other tax year is being
addressed by the IRS in an audit reconsideration. The Clinic B may report the case on either line 2I or 2U,
but may not report the case on both lines. Clinic B has discretion to decide whether to report the case on
line 2I or 2U, taking into account whatever factors it deems important to help the Program Office better
understand the status of the casework performed as of the end of the reporting period.

Additional Case Information
Report additional information about cases worked during the reporting period. Lines 3 and 4 relate to new cases
opened during the reporting period, as reported on line 1B. Lines 5 through 10 apply to all cases worked during
the reporting period, as reported on line 1C.

156

LOW INCOME TAXPAYER CLINIC

APPENDIX B

I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI
VII

i. Line 3. Report on this line the number of new cases opened during the reporting period in which the
amount in controversy exceeds $50,000 for any tax year. A clinic may represent a taxpayer in a case in
which the amount in controversy exceeds $50,000. However, the clinic must include an explanation of
why each case was accepted for representation on Form 13424-N, Low Income Taxpayer Clinic (LITC)
Program Report, line 2.vii. See Publication 3319 for additional information;

VIII
II

ii. Line 4. Report on this line the number of new cases opened during the reporting period for taxpayers
whose income exceeds 250 percent of federal poverty guidelines; and
III

iii. Line 5. Report on this line the number of cases worked during the reporting period where the
representative advocated to more than one IRS function or federal court.

IV
V

Example 1: Reporting Additional Case Details
Clinic A is representing a taxpayer in a collection matter in which the IRS is levying the taxpayer’s Social
Security benefits. The clinic agrees to represent the taxpayer and contacts Automated Collection System
(ACS) to prove financial hardship, get the levy released, and have the taxpayer’s account placed in currently
not collectible status. The clinic later assists the taxpayer in submitting an OIC. Clinic A should include
this case among the number reported on line 5 because the clinic worked the case in both the ACS and OIC
units.

VI
VII
APPENDIX B
VIII

Example 2: Reporting Additional Case Details
Clinic B is representing a taxpayer in a dispute involving eligibility for the EITC for two tax years. At the
close of the reporting period, one tax year is being addressed in the U.S. Tax Court and the other tax year is
being addressed by the IRS in an audit reconsideration. Clinic B should include this case among the number
reported on line 5 because the clinic is working the case both in a federal court and Examination.

APPENDICES

i. Line 6. Report on this line the number of cases worked during the reporting period in which the clinic
represented a taxpayer in a dispute involving more than one tax year;

LOW INCOME TAXPAYER CLINIC

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INDEX

ii. Line 7. Report on this line the number of cases worked during the reporting period in which the clinic
represented an ESL taxpayer;

157

iii. Line 8. Report on this line the number of cases worked during the reporting period in which the clinic
represented both the taxpayer and the taxpayer’s spouse with regard to a joint tax liability;
iv. Line 9. Report on this line the number of cases worked during the reporting period in which the
clinic used a volunteer to represent the taxpayer. Do not count as volunteers any individuals receiving
compensation from the clinic or any students receiving academic credit for their work at the clinic; and
v. Line 10. Report on this line the number of cases worked during the reporting period in which the clinic
represented a taxpayer on state or local tax matters related to a federal tax controversy.

U.S. Tax Court Activities

i. Line 11. Select “Yes” or “No” to indicate whether the clinic participates in the U.S. Tax Court Clinical
Program. If “Yes” is selected, list the “place of trial” city or cities served. Input one location per line and
click on “Add” to add additional locations;

ii. Line 12. Report on this line the number of cases reported on line 1C for which the clinic entered
an appearance to represent the taxpayer in the U.S. Tax Court, whether through filing an entry of
appearance or via a petition submitted by the clinic;
iii. Line 13. Report on this line the number of cases reported on line 1C for which the clinic represented
a taxpayer in a case filed in the U.S. Tax Court, but where no entry of appearance was submitted by the
clinic. For example, if a clinic staff attorney represented a client who filed a petition in the U.S. Tax
Court and the attorney negotiated a settlement with the IRS but did not enter an appearance with the
Tax Court, include this case among the number reported on line 13; and
iv. Line 14. Report on this line the number of informal consultations conducted with taxpayers in the U.S.
Tax Court during the reporting period. Representation of taxpayers reported on lines 12 and 13 should
not be reported on this line. For example, if a clinic staff attorney assisted a taxpayer at a U.S. Tax Court
calendar call by providing advice to the taxpayer or acting as a communicator or mediator between
the parties, but does not represent the taxpayer, such assistance would be counted as an informal
consultation and reported on line 14.

158

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Closed Case Outcomes

Report in this section the outcomes of cases that were closed during the reporting period. Information reported
in this section should only relate to cases reported on line 1D. The information reported in this section will help
the Program Office better understand the impact of the clinic’s casework on taxpayers.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

i. Line 15A. Report on this line the number of cases closed during the period in which the taxpayer
was brought into filing compliance during the representation. Cases where a taxpayer was successfully
assisted or referred for assistance with return preparation to resolve a collection matter can be included
here;

VII

ii. Line 15B. Report on this line the number of cases closed during the period in which the taxpayer was
brought into collection compliance during the representation. Cases where the taxpayer paid his tax
liabilities in full, entered an approved installment payment plan, was placed in currently not collectible
status, or obtained an OIC can be included here;

VIII
II

iii. Line 15C. Report on this line the total dollars in tax refunds that were paid to taxpayers whose cases
were closed during the reporting period, rounded to the nearest whole dollar. Do not include refunded
dollars that were offset against any other outstanding tax liability. This amount may include all refunds
issued to the taxpayer during the representation that relate to the tax years in dispute. Include state
and local tax refunds if the clinic represented taxpayers before those agencies on a matter related to the
federal tax controversy; and

III
IV
V

iv. Line 15D. Report on this line the total dollar impact in tax liabilities, penalties, and interest to
taxpayers whose cases were closed during the reporting period, rounded to the nearest whole dollar.
Include an abatement of tax, penalties, or interest, a reduction in a proposed deficiency, the amount of
innocent spouse relief obtained, the difference between the full amount owed and the total amount to be
paid on an accepted OIC, and similar items. Do not include amounts placed in currently not collectible
status. Include the total dollar impact in state and local tax liabilities, penalties, and interest to taxpayers
if the clinic represented taxpayers before those agencies on a matter related to the federal tax controversy.

VI
VII
APPENDIX B
VIII

Example 1: Reporting Case Outcomes
A clinic represented a taxpayer facing a proposed deficiency of $3,000. After review of the facts, the clinic
determined that the IRS failed to credit $4,000 in withholding. The $3,000 liability was abated in full, and
the taxpayer received a cash refund of $1,000. The clinic should report $1,000 on line 15C, and $3,000 on
line 15D.

APPENDICES

To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms Section at the end of this
Appendix.

GLOSSARY
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INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

159

Instructions for Form 13424-L, Statement of Grant Expenditures
Purpose
Form 13424-L, Statement of Grant Expenditures, is used to report how federal grant funds and matching funds
were spent by the clinic during the reporting period. This form is also used to report a narrative explanation of
how each expense amount was calculated and the sources and valuation of matching funds. All expenses must be
reasonable, necessary, and allocable to this grant. See Publication 3319 or 2 CFR Part 200 for guidance on costs
and matching funds.
Note: Grant expenditure amounts must also be reported on Standard Form 425 (described above).

Specific Instructions for Completing the Form
Detailed Budget Worksheet
The system will navigate to the screen below when the Form 13424-L is selected on the Form Selection screen.

Each line item does not require a dollar-for-dollar match, but the total matching funds must equal or exceed the
total federal funds expended.
The total amount reported on this form for expenditure of federal funds (line K, Federal column) must be the
amount of federal funds spent during the reporting period; do not include any amounts drawn from the award
using the Payment Management System (PMS), but not spent. The PMS is operated by the Department of
Health and Human Services, Division of Payment Management.

Grant Expenditures Narrative Explanation
This section requires more detailed information about your LITC’s expenditures.
Each letter of the Grant Expenditures Narrative Explanation corresponds to an expense category in the Detailed
Budget Worksheet. The information provided in the narrative should be sufficiently detailed so that a reviewer
can arrive at the same amounts listed on the Detailed Budget Worksheet by expense and by category (federal or
match).

160

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Personnel

I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Report salaries and wages that were paid to LITC staff. Do not include fringe benefits in this category (fringe
benefits should be accounted for in Category B). In the explanation, list each staff member’s name, position,
rate of pay, and time devoted to clinic activities (hourly wage and number of hours of service, or annual salary
and percentage of annual salary). State the portion of each staff member’s salary or wages paid from federal and
matching funds, as well as the source of the matching funds. Volunteer in-kind services should not be included in
the Personnel category. They must be included in Category H, Other Expenses.
Calculate each clinic staff member’s full-time equivalent (FTE). Take the staff member’s total hours worked for
the clinic and divide it by total hours in the reporting period. For staff assigned to LITC activities on a percent of
total working hours, convert the applicable percentage into a decimal.

VII

Note: If a staff member is full-time with the organization but only a partial FTE for the clinic, multiply the
FTE times the full-time salary to arrive at the proper amount to include as a personnel expense.

VIII
II

Calculate the personnel expense for each staff member. Personnel expense can be calculated as a percent of total
time/FTE multiplied by salary, or by multiplying the number of hours worked by the applicable hourly rate.

III

Determine and list out the dollar amount attributable to federal and match. List sources of match in the
comment section.

Input one person per line in the personnel narrative section. Click on the “Add” button to enable additional line
option.

Fringe Benefits

VI
VII
APPENDIX B

nnState

APPENDICES

nnShow

VIII

Report fringe benefits that were paid on behalf of LITC staff whose wages and salaries are reported in personnel
costs (Category A above). In the explanation, state the fringe benefits rate(s), the items that constitute the fringe
benefits, what portion was paid by federal funds and matching funds, and the source of matching funds. Identify
the rate applicable to each staff position if varying rates apply by position.
the formula (methodology) for calculating fringe benefits for each position listed in Category A;
what items are included in fringe benefits;

nnIndicate

the dollar amount attributable to federal and match; and

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INDEX

nnProvide

the source of matching funds.

LOW INCOME TAXPAYER CLINIC

161

Travel

Report travel costs, including costs associated with attendance at the annual LITC conference and other travel
expenses directly related to conducting LITC business or activities. In the explanation, identify the travel costs
listed, whether the costs were paid with federal or matching funds, and the source of the matching funds.
Please break down travel costs by category, such as transportation, hotel, meals, incidental expenses, and mileage.
If using a mileage rate, show the computation.

Equipment

Report the cost of equipment that was purchased by the clinic and used in operating an LITC program. Donated
equipment may be included as matching funds and must be valued at the fair market value of the property at the
time of the donation. In the explanation, identify the equipment purchased or donated, whether the associated
costs were paid using federal or matching funds, and the source of the matching funds. If there were third-party
in-kind contributions of equipment, identify the equipment, the donor, and how the valuation was determined.
Only equipment costing $5,000 or more is included in the category; equipment costing less is included in
Category E.

Supplies

Report the cost of supplies and equipment costing less than $5,000 that were used in operating the LITC.
Donated supplies may be included as matching funds and must be valued at the fair market value of the property
at the time of the donation. In the explanation, identify:
nnThe

value of supplies used;

nnWhether
nnSource

the associated costs were paid using federal or matching funds; and

of the matching funds.

If there are third-party in-kind contributions of supplies, explain the amount of the supplies contributed and how
the valuation.

162

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Contractual

of the expense;

nnWhether
nnSource

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

nnNature

the associated costs were paid using federal or matching funds; and

of the matching funds.

If a contracted item or service pertains to other programs in addition to LITC activities, only the portion
directly attributable to LITC activities may be allocated to the LITC program. The narrative must explain the
methodology used to apportion costs between the LITC activities and other programs.
There are two acceptable methodologies for calculating federal funds allocable to indirect costs:
Cost Rate Agreement

VII

nnIndirect

i. Must be approved in advance;
VIII

ii. Agreement must set forth cost items included in the rate; and

iii. The clinic may not charge items included in the rate as separate expense items.
minimis ten Percent Rate

III

nnDe

i. Rules are set forth in 2 CFR Part 200; and
IV

ii. Clinics that elect to use the de minimis rate are prohibited from charging administrative or facility
costs as separate expense items.

For example, if a clinic is part of a larger organization that has an indirect cost rate agreement and the rental cost
of the facility in which the clinic operates is included in the negotiated rate, then the clinic may not include the
facilities cost under the Contractual Expense category. Similarly, if the clinic elects to use the de minimis rate to
charge indirect costs on all its federal awards, no facilities and administration costs may be charged as direct costs.

VI
VII
APPENDIX B

Construction
This section has been disabled. No construction expenses are allowed.

VIII
APPENDICES
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LOW INCOME TAXPAYER CLINIC

163

Other Expenses

Report all other direct costs that were incurred in operating an LITC program that are not properly included in
categories A through G. The value of volunteer in-kind services is included in this category as matching funds.
The explanation should identify:
nnThe

type of expense;

nnWhether
nnSource

the cost was paid using federal or matching funds; and

of the matching funds.

The explanation must also disclose the rate or rates that were used to value volunteer in-kind services and the
number of volunteer hours that were provided, categorized by type of service or volunteer.

Indirect Costs

Report indirect costs not directly related to the LITC program, but incurred as part of the general overhead and
administration of the grantee. Indirect charges may be charged as a use of federal funds based upon an approved
Indirect Cost Rate Agreement or the de minimis rate allowed under 2 CFR Part 200. However, indirect charges
may not be counted as matching funds and the rate may only be applied to the base paid with federal funds.
The narrative explanation should identify the indirect cost rate, the base to which the rate was applied, and the
computation for the indirect charges amount. Briefly summarize the expenses included in the indirect cost rate
agreement.
If indirect costs were charged to the LITC grant, no items that are included in the indirect cost rate or the de
minimis rate may be charged as direct expenses. For example, if a clinic is part of a larger organization that has
an Indirect Cost Rate Agreement and the rental cost of the facility in which the clinic operates is included in
the negotiated rate, then the clinic may not include the facilities cost under the Contractual Expense category.
Similarly, if the clinic elects to use the de minimis rate to charge indirect costs on all its federal awards, no facilities
and administration costs may be charged as direct costs. See Publication 3319 or 2 CFR Part 200 for guidance on
indirect charges.

164

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Matching Funds
This section addresses matching funds from sources other than the federal government.
I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Complete this section by providing a narrative that includes an explanation of the sources and amounts of
matching funds. The clinic must state explicitly that matching funds provided to the LITC program (1) were
not used as matching funds for any other federal program and (2) were not funds received from any other federal
grant unless specifically authorized by statute to be used as matching funds.
nnList

amount of match by source; and

nnList

total of all match funding.

Input one source of matching funds per line. Click on the “Add” button to enable the additional line option.

VII
VIII

Returning Unused Grant Funds

Complete this section if your LITC has unused grant funds to be returned.

III

Complete this section by providing a statement as to whether the clinic will spend its entire LITC grant award by
the end of the grant year. In the event the clinic anticipates that it will not spend its entire award, the clinic must
contact the LITC Program Office immediately so the funds can be redistributed to other grantees. Complete this
section for the Year-End report if the amount of unused grant funds at the end of the grant year exceeds $500.
Include the reason(s) why excess grant funds were not expended or made available for redistribution to other
grantees and whether this was due to a one-time occurrence or an ongoing issue.

IV
V
VI
VII
APPENDIX B

Request Additional Grant Funds
This section applies to the Interim report only.

VIII

If you wish to request additional LITC grant funds for the current grant year (to be used before December 31),
and your LITC grant award is less than $100,000, indicate the amount of additional funds requested, the expense
category or categories where the funds will be spent, and the amount and source of matching funds that will be
provided if the additional funding is awarded.

APPENDICES

The total funds requested for the grant year may not exceed $100,000. See IRC § 7526(c)(2). After entering
amounts into the Grant Expenditures Narrative, verify that the sum of the amounts listed under each expense type
and each category (federal/match) are consistent with the amounts listed on the Detailed Budget Worksheet.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
GLOSSARY
INDEX
INDEX

To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms Section at the end of this
Appendix.

165

Form 13424-L
(May 2018)

Department of the Treasury - Internal Revenue Service

OMB Number
1545-1648

Statement of Grant Expenditures
Grant Period

Name of Low Income Taxpayer Clinic

From
Expense Categories

Federal

Match

To
Total

A. Personnel
B. Fringe Benefits
C. Travel
D. Equipment
E. Supplies
F. Contractual
G. Construction
H. Other Expenses
I. Total Direct Charges
J. Indirect Charges
K. Totals

Catalog Number 58506B

www.irs.gov
For Paperwork Reduction Act Notice, see Publication 3319.

166

LOW INCOME TAXPAYER CLINIC

Form 13424-L (Rev. 5-2018)

APPENDIX B

Page 2

Grant Expenditures Narrative Explanations
A. Personnel

I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

B. Fringe Benefits

C. Travel

VII
VIII
II

D. Equipment

III
IV
V

E. Supplies

VI
VII
APPENDIX B

F. Contractual

VIII
APPENDICES

G. Construction

GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 58506B

www.irs.gov

Form 13424-L (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

167

Page 3

H. Other Expenses

I. Total Direct Charges

J. Indirect Costs

Matching Funds

Unused Grant Funds

Additional Funding Request (Interim Report ONLY)

Catalog Number 58506B

168

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-L (Rev. 5-2018)

APPENDIX B

Page 4

Instructions for Form 13424-L, Statement of Grant Expenditures

Note: Grant expenditure amounts must also be reported on SF
425.
Reporting Requirements

Reporting Period

B. Fringe Benefits
Report fringe benefits that were paid on behalf of LITC staff
whose wages and salaries are reported in personnel costs
(category A above). In the explanation state the fringe benefits
rate(s), the items that constitute the fringe benefits, what portion
was paid by federal funds and matching funds, and the source of
matching funds. Identify the rate applicable to each staff position
if varying rates apply by position.

IV
V
VI
VII
APPENDIX B

The total amount reported on this form for expenditure of Federal
funds (line K, Federal column) must be the amount of Federal
funds spent during the reporting period; do not include any
amounts drawn from the award using the Payment Management
System (PMS), but not spent. The PMS is operated by the
Department of Health and Human Services, Division of Payment
Management.

Determine and list out the dollar amount attributable to federal
and match. List sources of match in the comment section.

III

Each line item does not require a dollar-for-dollar match, but the
total matching funds must equal or exceed the total federal funds
expended.

Calculate the personnel expense for each staff member.
Personnel expense can be calculated as a percent of total time/
FTE multiplied by salary, or by multiplying the number of hours
worked by the applicable hourly rate.

Specific Instructions for Completing the Form

Note: If a staff member is full-time with the organization but only
a partial FTE for the clinic, multiply the FTE times the full-time
salary to arrive at the proper amount to include as a personnel
expense.

VIII

Clinics are required to report on LITC activities twice for each
grant year. The grant year is January 1 through December 31 for
the year in which a grant award is received. An Interim Report is
required to report expenditures incurred for the period from
January 1 through June 30; a Year-End Report is required to
report expenditures incurred for the entire grant year, the period
from January 1 through December 31.

Calculate each clinic staff member's full-time equivalent (FTE).
Take the staff member's total hours worked for the clinic and
divide it by total hours in the reporting period. For staff assigned
to LITC activities on a percent of total working hours, convert the
applicable percentage into a decimal.

VII

All clinics must complete this form. See Publication 3319 for
additional information.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Form 13424-L, Statement of Grant Expenditures, is used to
report how federal grant funds and matching funds were spent
by the clinic during the reporting period. This form is also used to
report a narrative explanation of how each expense amount was
calculated and the sources and valuation of matching funds. All
expenses must be reasonable, necessary, and allocable to this
grant. See Publication 3319 or 2 CFR Part 200 for guidance on
costs and matching funds.

Report salaries and wages that were paid to LITC staff. Do not
include fringe benefits in this category (fringe benefits should be
accounted for in category B). In the explanation, list each staff
member's name, position, rate of pay and time devoted to clinic
activities (hourly wage and number of hours of service, or annual
salary and percentage of annual salary). State the portion of
each staff member's salary or wages paid from federal and
matching funds, as well as the source of the matching funds.
Volunteer in-kind services should not be included under the
Personnel category. They must be included under category H,
Other Expenses.

Purpose

A. Personnel

Note: Interim and Year-End Reports, including this form (Form
13424-L) may be released under the Freedom of Information Act
(FOIA). In response to a FOIA request, the LITC Program Office
will release these reports after appropriate redactions to ensure
confidentiality of taxpayer information.

• Show the formula (methodology) for calculating fringe
benefits for each position listed in Category A;
• State what items are included in fringe benefits;
• Provide the dollar amount attributable to federal and match;
and
• Indicate the source of matching funds.
C. Travel
Report travel costs, including costs associated with attendance
at the annual LITC conference and other travel expenses directly
related to conducting LITC business or activities. In the
explanation, identify:

APPENDICES

This section requires more detailed information about your
LITC's expenditures. Each letter of the Grant Expenditures
Narrative Explanation corresponds to an expense category in the
Detailed Budget Worksheet. The information provided in the
narrative should be sufficiently detailed so that a reviewer can
arrive at the same amounts listed on the Detailed Budget
Worksheet by expense and by category (federal or match).

VIII

Grant Expenditures Narrative Explanation

• The travel costs listed;

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INDEX
INDEX

• Whether the costs were paid with federal or matching funds;
and
• The source of the matching funds.

Catalog Number 58506B

www.irs.gov

Form 13424-L (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

169

Page 5

Please break down travel costs by category, such as
transportation, hotel, meals, and incidental expenses (MIE), and
mileage. If using a mileage rate, show the computation.

• De Minimis 10 percent rate
i. Rules are set forth in 2 CFR Part 200; and

D. Equipment
Report the cost of equipment that was purchased by the clinic
and used in operating an LITC program. Donated equipment
may be included as matching funds and must be valued at the
fair market value of the property at the time of the donation. In
the explanation, identify:
• The equipment purchased or donated;
• Whether the associated costs were paid using federal or
matching funds; and
• The source of the matching funds.

ii. Clinics that elect to use the de minimis rate are prohibited
from charging administrative or facility costs as separate
expense items.
For example, if a clinic is part of a larger organization that has an
indirect cost rate agreement and the rental cost of the facility in
which the clinic operates is included in the negotiated rate, then
the clinic may not include the facilities cost under the Contractual
Expense category. Similarly, if the clinic elects to use the de
minimis rate to charge indirect costs on all its federal awards, no
facilities and administration costs may be charged as direct costs.

If there were third-party in-kind contributions of equipment,
identify the equipment, the donor, and the how the valuation was
determined. Only equipment costing $5,000 or more is included
in the category; equipment costing less is included in Category E.

G. Construction

E. Supplies

H. Other Expenses

Report the cost of supplies and equipment costing less than
$5,000 that were used in operating the LITC. Donated supplies
may be included as matching funds and must be valued at the
fair market value of the property at the time of the donation. In the
explanation, identify:

Report all other direct costs that were incurred in operating an
LITC program that are not properly included in categories A
through G. The value of volunteer in-kind services is included in
this category as matching funds.The explanation should identify:

• The value of supplies used;
• Whether the associated costs were paid using federal or
matching funds; and
• The source of the matching funds.
If there are third-party in-kind contributions of supplies, explain
the amount of the supplies contributed and how the valuation was
determined, as well as the source of the donation.

Report the cost of rent, utilities, and other contracted items or
services that were used in operating an LITC program. Donated
space may be included as matching funds and the value
assigned may not exceed the fair rental value of comparable
space. The explanation should identify:
• Nature of the expense;
• Whether the associated costs were paid using federal or
matching funds; and
• The source of the matching funds.
If a contracted item or service pertains to other programs in
addition to LITC activities, only the portion directly attributable to
LITC activities may be allocated to the LITC program. The
narrative must explain the methodology used to apportion costs
between the LITC activities and other programs.
There are two acceptable methodologies for calculating federal
funds allocable to indirect costs:
• Indirect Cost Rate Agreement
i. Must be approved in advance;
ii. Agreement must set forth cost items included in the
rate; and
Catalog Number 58506B

LOW INCOME TAXPAYER CLINIC

This category is not applicable to this grant. No construction
expenses are allowed.

• Nature of the expense;
• Whether the associated costs were paid using federal or
matching funds; and
• The source of the matching funds.
The explanation must also disclose the rate or rates that were
used to value volunteer in-kind services and the number of
volunteer hours that were provided, categorized by type of
service or volunteer, as appropriate.
I. Total Direct Charges

F. Contractual

170

iii. The clinic may not charge items included in the rate
as separate expense items.

www.irs.gov

The total of the direct charges is the sum of lines A through H for
each column.
J. Indirect Charges
Report indirect costs not directly related to the LITC program, but
incurred as part of the general overhead and administration of the
grantee. Indirect charges may be charged as a use of federal
funds based upon an approved Indirect Cost Rate Agreement or
the 10% de minimis rate allowed under 2 CFR Part 200.
However, indirect charges may not be counted as matching funds
and the rate may only be applied to the base paid with federal
funds. The narrative explanation should identify the indirect cost
rate, the base to which the rate was applied, and the computation
for the indirect charges amount. Briefly summarize the expenses
included in the indirect cost rate agreement.
If indirect costs were charged to the LITC grant, no items that are
included in the indirect cost rate or the de minimis rate may be
charged as direct expenses. For example, if a clinic is part of a
larger organization that has an Indirect Cost Rate Agreement and
the rental cost of the facility in which the clinic operates is
included in the negotiated rate, then the clinic may not include the
facilities cost under the Contractual Expense category. Similarly,
if the clinic elects to use the de minimis rate to charge indirect
Form 13424-L (Rev. 5-2018)

APPENDIX B

Page 6

costs on all its federal awards, no facilities and administration
costs may be charged as direct costs. See Publication 3319 or 2
CFR Part 200 for guidance on indirect charges.

Matching Funds

This section addresses matching funds from sources other than
the federal government. Complete this section by providing a
narrative that includes an explanation of the sources and
amounts of matching funds. The clinic must state explicitly that
matching funds provided to the LITC program (1) were not used
as matching funds for any other federal program and (2) were not
funds received from any other federal grant unless specifically
authorized by statute to be used as matching funds.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

• List amount of match by source; and
• List total of all match funding.
Returning Unused Grant Funds
Complete this section by providing a statement as to whether the
clinic will spend its entire LITC grant award by the end of the
grant year. In the event the clinic anticipates that it will not spend
its entire award, the clinic must contact the LITC Program Office
immediately so the funds can be redistributed to other grantees.

VII

Complete this section for the Year-End Report if the amount of
unused grant funds at the end of the grant year exceeds $500.
Include the reason(s) why excess grant funds were not
expended or made available for redistribution to other grantees
and whether this was due to a one-time occurrence or an
ongoing issue.

VIII
II

Request Additional Grant Funds (This section applies to the
Interim report only.)

III
IV

If you wish to request additional LITC grant funds for the current
grant year (to be used before December 31), and your LITC
grant award is less than $100,000, indicate the amount of
additional funds requested, the expense category or categories
where the funds will be spent, and the amount and source of
matching funds that will be provided if the additional funding is
awarded.

V
VI
VII
APPENDIX B

The total funds requested for the grant year may not exceed
$100,000. See IRC § 7526(c)(2). After entering amounts into the
Grant Expenditures Narrative, verify that the sum of the amounts
listed under each expense type and each category (federal/
match) are consistent with the amounts listed on the Detailed
Budget Worksheet.

VIII
APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

Catalog Number 58506B

www.irs.gov

Form 13424-L (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

171

Form 13424-L
(May 2018)

Department of the Treasury - Internal Revenue Service

OMB Number
1545-1648

Statement of Grant Expenditures

Name of Low Income Taxpayer Clinic

Grant Period

ABC LITC

From
Expense Categories

Federal

A. Personnel
B. Fringe Benefits

1/1/2019

Match

12/31/2019
Total

79,821

36,720

116,541

1,525

21,783

23,308

2,079

1,900

11,899

25,653

100,034

181,380

C. Travel
D. Equipment
E. Supplies
F. Contractual
G. Construction
H. Other Expenses
I. Total Direct Charges

81,346

J. Indirect Charges

11,654

K. Totals

93,000

Catalog Number 58506B

www.irs.gov
For Paperwork Reduction Act Notice, see Publication 3319.

172

LOW INCOME TAXPAYER CLINIC

11,654
100,034

193,034

Form 13424-L (Rev. 5-2018)

APPENDIX B

Page 2

Grant Expenditures Narrative Explanations
I

A. Personnel
ABC Legal Services computes 1.0 FTE on a 40-hour work week (2,080 hours per year) All dollars are rounded to the nearest dollar. FTE rounded to
nearest hundreth.
CD/QTE (Atty)-John Fordham-.8 FTE Annual Salary $89,000 x 0.8=$71,200 Federal:$50,000 Match: $21,200 (ABC Operating Funds, Legal
Services Corporation, LSC)
Paralegal- Alice Gonzaga .43 FTE $22 x 900 hours= $19,800 Federal: $10,000 $9,800 XYZ Private Foundation funds
Intake- Ruth Washington .50 FTE $15 x 1036.09 hours= $15,541 Federal: $15,541 Match: $0
Receptionist- Deborah Chapman 1/3 FTE x $30,000= $10,000 Federal: $4,280 Match:$5,720 XYZ Private Foundation funds
Federal: $79,821 Match: $36,720 ($21,200 ABC Operating Funds/LSC + $15,520 XYZ Private Foundation)

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

B. Fringe Benefits
Fringe Benefits are 20% of wages of $116,541.
Federal:$1,525 Match: $21,783 XYZ Private Foundation funds.

C. Travel
Local travel to conduct educational and outreach activities. $45 parking. $281 mileage (525 miles at $.535 per mile).
$1,753 of travel to LITC Conference. $950 Hotel. $553 Air fare. $200 MI&E. Travel to and from airport $50 Taxi.
Federal: $0 Match: $2,079 ($45 + $281 + $1,753) XYZ Private Foundation funds.

VII
VIII
II

D. Equipment
$0

III
IV
V

E. Supplies
ABC Legal Services uses a full-time equivalent (FTE) method to allocate certain direct shared expenses, including Supplies, Telephone and Internet,
ABC Legal Services uses a full-time equivalent (FTE) method to allocate certain direct shared expenses, including Supplies, Telephone and Internet,
and and 2 CFR § 200.501 Audit Cost. Under this method, the allocation percentage is determined by dividing the FTEs of employee time devoted to
the LITC program by the total FTEs available in the ABC Legal Services organization. The LITC program staffing will be 2.06 FTEs (.80 FTE for
John Fordham + .43 FTE for Alice Gonzaga + .50 FTE for Ruth Washington + .33 FTE for Debra Chapman = 2.06 FTEs). Total FTEs in the ABC
LegalServices organization is 40 FTEs. The ratio of shared expenses is estimated at 5.15% (2.06/ 40).
Total cost of supplies for the organization is estimated to be $36,900 and will include the cost of laptop computers, printers, copy paper, toner, pens,
pencils, envelopes, postage, etc. $36,900 x 5.15% = $1,900.
Federal: $0 Match: $1,900 XYZ Private Foundation funds.

VI
VII
APPENDIX B
VIII

F. Contractual
Total telephone and internet shared cost is estimated to be $35,880.$35,880 x 5.15%(FTE allocation) = $1,848. The organization's total audit cost (a
shared expense) is estimated to be $20,400. $20,400 x 5.15% (FTE allocation)= $1,051. Advertising costs – These costs will be incurred solely to
publicize the LITC program. Planned advertising for LITC representation and education services are estimated to be $3,000.
Rent – Facilities costs are generally included in the Indirect Cost Rate Agreement. However, the organization will be renting off-site space at
Neighborhood Drop-in, a community based organization, solely to conduct weekly intake. The cost of the space is $500 per month. $500 x 12 mo =
$6,000.
Federal: $0 Match: $11, 899($1,848 + $1,051 + $3,000 + $6,000) XYZ Private Foundation funds.

APPENDICES

Catalog Number 58506B

GLOSSARY
GLOSSARY
INDEX
INDEX

G. Construction

www.irs.gov

Form 13424-L (Rev. 5-2018)

LOW INCOME TAXPAYER CLINIC

173

Page 3

H. Other Expenses
Representation services: $200/hr x 87 hrs = $17,400. Non-representation services:
Volunteer attorneys will contribute services including research, consultations, and review of educational materials. Valuation rate is the same as pay
rate for staff attorney John Fordham. ($42.79/hr + $8.56/hr fringe) = $51.35/hr x 95 hrs = $4,878.
A bilingual Enrolled Agent will provide services including ESL consultations and review of educational materials. Valuation rate is consistent with
those paid for similar work in the labor market and were determined using BLS information for the locality plus reasonable fringe. ($22.50/hr +
$4.50/hr fringe) = $27/hr x 75 hrs = $2,025.
Law students will represent taxpayers before the IRS pursuant to a special appearance authorization. Valuation rate is $18/hr which represents 35%
of the staff attorney's pay rate, including fringe. (Note: students are not permitted to use the $200/hr rate available to other qualified representatives.)
$18/hr x 75 hrs = $1,350.
Federal: $0 Match: $25,653 ($17,400+$4,878+$2,025+$1,350) Third Party In-Kind
I. Total Direct Charges

J. Indirect Costs
$116,541 x 10% = $11,654
Federal: $11,654
(Please note for this example the MTDC only takes into consideration the direct salary costs for LITC staff $116,541. Additional items such as
fringe benefits supplies and materials and travel directly attributable to the work of the grant could also be utilized in calculating the MTDC if it can
be shown they are direct costs of performing work under the LITC grant. See Section IV.E. ii. "Direct v. Indirect Expenses," Publication 3319
"2019 LITC Grant Application and Guidelines. )

Matching Funds
Total matching funds will be $100,034 from the following sources:
$53,181 cash from XYZ Private Foundation
$21,200 cash from ABC Corp Operating Funds (LSC)
$25,653 third party in-kind
These funds were not used as matching funds for any other federal program.

Unused Grant Funds
NA

Additional Funding Request (Interim Report ONLY)
NA

Catalog Number 58506B

174

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-L (Rev. 5-2018)

APPENDIX B

Instructions for Form 13424-N, LITC Program Narrative Report
Purpose
I

Form 13424-N, LITC Program Narrative Report, is used to report information about certain representation,
education, and advocacy work the clinic performed during the reporting period. This form is used to report
narrative explanations of the program plan, how the clinic is able to meet the requirements of the grant, trends in
the types of cases encountered, and success stories of note that occurred during the reporting period. This form
also provides an opportunity to supplement responses from other reporting forms included in the Interim and
Year-End report that relate to representation, education, and advocacy efforts.

II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

This form is also used to report the steps taken to resolve open cases and provide ongoing representation, where
appropriate, for clinics that will no longer be participating in the LITC grant program in the next grant period.
The Program Office uses the information reported on this form and the other reporting forms to determine the
scope of services provided by clinics. Data is also aggregated to provide program-wide statistical information
about services provided to low income and ESL taxpayers.

Specific Instructions for Completing the Form
VII
VIII

All fields require an entry even if the response is N/A or Not Applicable. Each section has an 8,000 character
limit, except where designated. For purposes of reporting on Program Plan progress, addressing Grant
Requirements, or Success Stories on this form, clinics are not required to repeat information included in the
Interim report on the Year-End report. Report activities performed between January 1 and June 30 on the
Interim report, and those performed between July 1 and December 31 on the Year-End report. If a trend noted in
the emerging issues in the Interim report is still being seen at Year-End, it is appropriate to indicate so especially if
the trend is strengthening or if there are newer stronger examples of a trend previously identified.

II
III
IV

Program Plan Progress

The system will navigate to the screen below when the Form 13424-N is selected on the Form Selection screen.
Report the progress made in implementing the program plan during the reporting period in this section.

VI
VII
APPENDIX B
VIII
APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
GLOSSARY
INDEX
INDEX

Include the description of the progress made in meeting the numerical and substantive goals and objectives,
respectively, that were detailed in the grant application on Form 13424-M, Low Income Taxpayer Clinic (LITC)
Application Narrative, or as revised in any amendments or continuing funding requests.

175

Grant Requirements
Report how certain requirements of the LITC grant are fulfilled in this section.

176

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Use line 2.ix to supplement responses from other reporting forms included in the Interim and Year-End report
that relate to representation, education, and advocacy efforts.
I

Emerging Issues

Report frequently encountered trends identified in the types of cases encountered through work on behalf of low
income or ESL taxpayers during the reporting period in this section.

I. LITC PROGRAM OVERVIEW
III
IV
V
VI

Input one issue per item box. Click on the “Add” button to enable additional line option.

VII

Note: Do not include any confidential or personally identifiable taxpayer information. See Publication 3319
for additional information about confidentiality.

VIII

Success Stories

Report notable stories of achievement of the LITC mission that occurred during the reporting period in this
section.

III
IV
V
VI
VII
APPENDIX B

Input one issue per item box. Click on the “Add” button to enable additional line option.
The response should describe particular cases or activities but do not include any confidential or personally
identifiable taxpayer information. See Publication 3319 for additional information about confidentiality.

VIII

Report advocacy work performed between January 1 and June 30 on the Interim report, and report advocacy
work performed between July 1 and December 31 on the Year-End report.

APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

177

Last Year in LITC Program
Only complete this section if included with a final Year-End report of a clinic that will not be receiving LITC
grant funding in the next grant period.

If the clinic will no longer be participating in the LITC grant program, report the steps taken to resolve open cases
and provide ongoing representation, where appropriate.
To finalize the form, see the Instructions for How to Save, Validate, and Submit Your Forms Section at the end of this
Appendix.

178

LOW INCOME TAXPAYER CLINIC

APPENDIX B

HOW TO SAVE, VALIDATE, AND SUBMIT YOUR FORMS
Click “Save” to save data entered before validating. When ready to submit, click “Validate” to indicate the
information is complete.
I
II
I. LITC PROGRAM OVERVIEW
III
IV
V
VI

When there are errors, the system will refresh to the screen below and list at the top of the screen the fields that
were not completed. The system will not allow the report status to change to “Validated” until all issues resolved
and re-validated.

VII

The system will refresh screen below and the report status shown as “Validated” if there are no errors or once all
errors are corrected.

VIII
II
III
V

to the Form Selection screen;

nnLocate

the form to submit;

nnFollow

the steps above to access the form; and

nnClick

VI
VII
APPENDIX B

nnGo

Once a reporting form is “Saved and Validated” without any errors it is ready to be submitted to the LITC
Program Office. The statuses can be found on the Form Selection screen and/or within each form itself. The
person who has the role of Principal Investigator/Program Director (PI/PD) must submit the reporting forms.
Ordinarily this is the Clinic Director in some organizations the (PI/PD) role may be held by an Executive
Director. To submit reporting forms, do the following:

on the “Submit” link (the submit link will not appear until the form moves to the “Validated” status).

VIII

Note: Once a form is submitted to the Program Office it is no longer editable. To edit a form that was
prematurely submitted, email the LITC Program Office at [email protected] and copy (i.e., cc)
your assigned Advocacy Analyst. The Advocacy Analyst will contact the organization to confirm the request
and the form will be released for edit. Follow the instructions above to resubmit the form to the LITC
Program Office.

APPENDICES
GLOSSARY
GLOSSARY
INDEX
INDEX

LOW INCOME TAXPAYER CLINIC

179

To exit the form, click the “Form Selection” link and the system will navigate back to the form details screen.

180

LOW INCOME TAXPAYER CLINIC

COMMONLY USED ACRONYMS

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

VI COMMONLY
VII
USED
VIII ACRONYMS
APPENDICES

GLOSSARY
INDEX

181

LOW INCOME TAXPAYER CLINIC

182

ABA

American Bar Association

ACA

Affordable Care Act

ACS

Automated Collection System

AES

Automated Examination System

AGI

Adjusted Gross Income

AICPA

American Institute of Certified Public Accountants

ALS

Automated Lien System

AMT

Alternative Minimum Tax

AMTAP

Accounts Management Taxpayer Assurance Program

ARC

Annual Report to Congress

ASED

Assessment Statute Expiration Date

ASFR

Automated Substitute for Return

AUR

Automated Under Reporter Program

BLS

Bureau of Labor Statistics

BMF

Business Master File

BWH

Backup Withholding

CAA

Certifying Acceptance Agent

CADE2

Customer Account Data Engine 2

CAF

Centralized Authorization File

CAP

Compliance Assurance Process

CAWR

Combined Annual Wage Reporting

CCR

Central Contractor Registration

CDP

Collection Due Process

CSED

Collection Statute Expiration Date

CFP

Civil Fraud Penalty

CFR

Code of Federal Regulations

Criminal Investigation

CNC

Currently Not Collectible

COB

Close of Business

CODI

Cancellation of Debt Income

COIC

Centralized Offer in Compromise

CPA

Certified Public Accountant

CPE

Continuing Professional Education

CPU

Central Processing Unit

CTC

Child Tax Credit

CSED

Collection Statute Expiration Date

DPM

Division of Payment Management

DUNS

Data Universal Numbering System

Enrolled Agent

EFS

Electronic Filing System

LOW INCOME TAXPAYER CLINIC

COMMONLY USED ACRONYMS

ETA

Effective Tax Administration

F&A

Facilities and Administrative Costs

FAC

Federal Audit Clearinghouse

FBAR

Report of Foreign Bank and Financial Accounts

FDIC

Federal Deposit Insurance Corporation

FEIE

Foreign Earned Income Exclusion

FFR

Federal Financial Report

FFATA

Federal Funding Accountability and Transparency Act

FICA

Federal Insurance Contribution Act

FOA

Funding Opportunity Announcement

FOIA

Freedom of Information Act

FPLP

Federal Payment Levy Program

Fiscal Year

HHS

Department of Health and Human Services

Installment Agreement

IP PIN

Identity Protection Personal Identification Number

IPSU

Identity Protection Specialized Unit

IRA

Individual Retirement Account

IRC

Internal Revenue Code

IRM

Internal Revenue Manual

ITIN

Individual Taxpayer Identification Number

LITC

Low Income Taxpayer Clinic

LB&I

Large Business & International

LSC

Legal Services Corporation

LTA

Local Taxpayer Advocate

MSP

Most Serious Problem

NCC

Non-Competing Continuation

NFTL

Notice of Federal Tax Lien

NOA

Notice of Award

NOPA

Notice of Proposed Adjustment

NTA

National Taxpayer Advocate

OIC

Offer-in-Compromise

OLS

Office of Online Services

OMB

Office of Management and Budget

OVD

Offshore Voluntary Disclosure

PDC

Private Debt Collection

GLOSSARY
INDEX

English as a Second Language

VI COMMONLY
VII
USED
VIII ACRONYMS
APPENDICES

ESL

Employer Identification Number

APPENDICES
III
IV

EIN

VIIII

Earned Income Tax Credit

EITC

II I. LITC III
PROGRAMIV OVERVIEW
V

Electronic Funds Transfer

EFT

LOW INCOME TAXPAYER CLINIC

183

184

PII

Personally Identifiable Information

Personal Identification Number

PMS

Payment Management System

PSP

Payroll Service Provider

PTIN

Preparer Tax Identification Number

PMS

Payment Management System

POA

Power of Attorney

Processing Year

QBA

Qualified Business Administrator

QRP

Questionable Refund Program

QTE

Qualified Tax Expert

RCP

Reasonable Collection Potential

Revenue Officer

ROI

Return on Investment

RRA98

IRS Restructuring and Reform Act of 1998

RSED

Refund Statute Expiration Date

SAM

System for Award Management

SAMS

Systemic Advocacy Management System

SB/SE

Small Business/Self-Employed

SNOD

Statutory Notice of Deficiency

SSN

Social Security Number

TAC

Taxpayer Assistance Center

TAO

Taxpayer Assistance Order

TAP

Taxpayer Advocacy Panel

TAS

Taxpayer Advocate Service

TBOR

Taxpayer Bill of Rights

TCE

Tax Counseling for the Elderly

TDA

Taxpayer Delinquent Account

TEFRA

Tax Equity and Fiscal Responsibility Act Of 1982

TE/GE

Tax Exempt & Government Entities

TIGTA

Treasury Inspector General for Tax Administration

Tax Year

UDOC

Uniform Definition of Child

URP

Under-Reporter Program

USPS

United States Postal Service

VFTF

Virtual Face to Face

VITA

Volunteer Income Tax Assistance

W&I

Wage & Investment

LOW INCOME TAXPAYER CLINIC

GLOSSARY

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

VII GLOSSARY
VIII
APPENDICES

GLOSSARY
INDEX

185

LOW INCOME TAXPAYER CLINIC

90/250 Income Requirement – at least 90 percent of taxpayers represented by an LITC must have incomes
which do not exceed 250 percent of the poverty level or criteria established by the Director of the Office of
Management and Budget (OMB). See IRC § 7526(b)(1)(B)(i). The Director of OMB has not established a
poverty level or criteria. The Department of Health and Human Services (HHS) publishes annual Federal Poverty
Guidelines based on family unit size and geographic location, which are applicable to the LITC Program. For
2018, the Federal Poverty Guidelines were published at 83 FR 2642 (Jan. 12, 2018).

A
Allowable Expenses – expenses chargeable to a grant as a use of federal funds or matching funds in accordance
with the cost principles guidance in 2 CFR Part 200 and 2 CFR Part 1000. Generally, for an expense to be
allowable, the expense must:
nn Be

necessary and reasonable for the performance of the federal award and be allocable thereto under the
applicable cost principles;

nn Conform

with any limitations or exclusions set forth in the cost principles or in the Notice of Award;

nn Be

consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the grantee;

nn Be

accorded consistent treatment by the grantee;

nn Be

determined in accordance with generally accepted accounting principles (GAAP), except, for state
and local governments and Indian tribes only, as otherwise provided for in the cost principles;

nn Not

be included as a cost or used to meet cost sharing or matching requirements of any other
federally-financed program in either the current or a prior period; and

nn Be

adequately documented.

Amount in Controversy – the amount in dispute for each tax year for which the LITC is representing the
taxpayer. Often the amount in controversy is the amount owed or the refund requested that is in dispute. In
some disputes with the IRS, however, the amount in controversy is the amount associated with an action taken
by the IRS. In some disputes with the IRS, however, the amount in controversy is the amount associated with an
action taken by the IRS. The amount includes the tax liability in dispute for a tax year, plus any related penalties
imposed. Whether interest is included will depend on the nature of the controversy. Further, the amount in
controversy is limited to the amount in dispute, which may be less than the amount specified in a statutory notice
of deficiency. If the taxpayer is disputing the amount due in more than one tax year or period, the amount in
controversy is the amount in dispute for a single tax year.
Application – is used to refer to a request for LITC grant funding submitted to the LITC Program office.
When used it is referring to either a LITC Full Grant Application or a Non-Competing Continuation Request
depending upon the type of application that the organization needs to complete.
Appropriation – a law authorizing federal agencies to obligate funds and make payments from the Treasury for
specified purposes. Appropriations are annual acts and permanent law. Until Congress makes an appropriation

186

LOW INCOME TAXPAYER CLINIC

GLOSSARY

for the LITC Program, the LITC Program Office may not be able to inform grantees of the amount of their
funding.

II I. LITC III
PROGRAMIV OVERVIEW
V

Award – the provision of funds by the LITC Program Office, based on an approved application and budget or
continuation request, to an organization to carry out activities in support of the LITC mission.

B
Basis of Accounting – refers to the time at which financial transactions are recorded. There are two primary
methods for tracking income and expenses. With accrual basis accounting, income is recorded when earned and
expenses are recorded when incurred. With cash basis accounting, income is recorded when received and expenses
are recorded when paid.
Budget – a request for funds to support an activity, presented by expense category.

VIIII

Case Management System – a system used to capture intake information, calculate client financial eligibility,
track case status and outcomes, input case notes, maintain timekeeping records, record educational and outreach
activities, and compile data for Interim and Year-End reports. LITCs are strongly encouraged to use professional
case management software to maintain client files. An LITC may purchase case management software with grant
funds to efficiently track and report its program activities.

APPENDICES
III
IV
V

Catalog of Federal Domestic Assistance (CFDA) – a governmentwide compendium of federal programs and
activities that provide assistance or benefits. The General Services Administration maintains the database from
which program information is obtained. See www.cfda.gov. The CFDA number for the LITC Program is
21.008.

Clinic – see Low Income Taxpayer Clinic.

VII GLOSSARY
VIII
APPENDICES

Clinic Director – a 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 (LTA)
office. In most circumstances, the Clinic Director will have the role of Principal Investigator/Program Director
(PI/PD) in GrantSolutions for purposes of signing and submitting forms. In some organizations, the PI/PD
might be the Executive Director.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Close Out – process by which the federal awarding agency determines that all applicable administrative
actions and all required work of the federal award have been completed and takes actions as described in
2 CFR § 200.343, Closeout.

187

Congressional District – an electoral constituency, apportioned by population, which elects a Member of
Congress.
Consultation – 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.
Continuing Legal Education (CLE) – an accredited professional educational program for attorneys. CLE is
also known as MCLE (Mandatory or Minimum Continuing Legal Education). The number of CLE credit hours
will vary by program and is dependent upon state CLE board approval. CLE rules vary by jurisdiction. Some
jurisdictions may not allow CLE credit for all types of programs, such as teleconferences or webinars.
Continuing Professional Education (CPE) – an accredited educational program required to maintain a
professional license, such as a Certified Public Accountant or Enrolled Agent designation.
Controversy – a dispute arising under the Internal Revenue Code between an individual and the IRS concerning
the determination, collection, or refund of any tax, penalties or interest, including any proceeding brought by
the taxpayer under Title 26. For example, a controversy includes a dispute related to the tax provisions of the
Affordable Care Act and certain civil actions arising under the Internal Revenue Code (IRC), for example those
arising under IRC §§ 7431 – 7435. While representing a taxpayer in a controversy with the IRS, an LITC
may also need to represent the taxpayer in a controversy with a state or local tax agency concerning the same or
related tax matter. A controversy does not include a federal criminal tax matter, but may include a state criminal
matter. For example, in some instances, the controversy may be considered a civil matter in the federal context,
but a criminal matter under state or local law. If the LITC is already representing the taxpayer in the federal civil
matter, it may be appropriate for the LITC to continue the representation to resolve the state or local matter.

D
Digital Accountability and Transparency Act (DATA) of 2014 – a law that requires the U.S. Department
of the Treasury to establish common standards for financial data provided by all government agencies on the
USASpending website to increase transparency in federal expenditures and to make the information more
accessible to the public.
Data Universal Numbering System (DUNS) Number – a nine-digit unique entity identifier 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 or applying online at http://
fedgov.dnb.com/webform.
Demographics – vital or social statistics (e.g., income, education level, native spoken language) of a group or
population of taxpayers within a defined state, county, or geographic regional area.

188

LOW INCOME TAXPAYER CLINIC

GLOSSARY

Direct Costs – costs that can be identified or allocated specifically with a particular program, such as a
Low Income Taxpayer Clinic, with a high degree of accuracy. Costs incurred for the same purpose in like
circumstances must be treated consistently as either direct or indirect. For additional information, see
2 CFR § 200.413.

II I. LITC III
PROGRAMIV OVERVIEW
V

Direct Lobbying – activities supporting the enactment, modification, or adoption of any law, regulation, or
policy at any level of government. Direct lobbying includes influencing or attempting to influence a Member of
Congress, a state or local legislator, or any of their staff members to take a position or action on a specific piece of
legislation or potential legislation. For additional information, see 2 CFR § 200.450.

Educational Activities – are programs designed to inform ESL or low income taxpayers about their rights and
responsibilities as taxpayers, as well as tax issues of particular significance to the intended audience and generally
delivered in person. Educational activities may also include a workshop or free training for other organizations
that assist low income or ESL taxpayers. To be considered an educational activity, information about a specific tax
topic or topics must be conveyed to the audience.

VIIII

Employer Identification Number (EIN) – a type of Taxpayer Identification Number issued by the IRS to
identify a business entity.

APPENDICES
III
IV

Engagement Letter – an engagement letter or retainer agreement defines the specific matters for which the LITC
will provide representation and protects both the representative and the taxpayer by informing both parties as to
the agreement of assigned responsibilities over the course of the professional relationship. Written copies of the
engagement letter or retainer agreement signed by both the representative and the taxpayer should be retained by
the LITC and a copy should be retained by the taxpayer.

V
VI

English as a Second Language (ESL) Taxpayers – taxpayers who are not proficient in English. This includes
taxpayers who speak minimal English, no English at all, and taxpayers who communicate using American Sign
Language.

VII GLOSSARY
VIII
APPENDICES

F
Family Unit – for purposes of the 90/250 rule, 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, civil union, or adoption who
live together. However, if related individuals live together, but the person seeking assistance from the LITC is
financially independent, then that person may be treated as a family unit, distinct from relatives in the household.
If two unrelated individuals live together, they constitute two family units.

GLOSSARY
INDEX

Federal Register – an official daily publication that provides a uniform system for communicating proposed and
final regulations and legal notices issued by federal agencies, including announcements of the availability of funds
for financial assistance programs.

LOW INCOME TAXPAYER CLINIC

189

Fringe Benefits – allowances and services provided by employers to their employees as compensation in addition
to regular salaries and wages. Fringe benefits include, but are not limited to, the costs of leave (vacation, familyrelated, sick, or military), employee insurance, pensions, and unemployment benefit plans. The costs of fringe
benefits must be reasonable. For additional information, see 2 CFR § 200.431.

G
Grant – financial assistance mechanism providing money, property, or both to an eligible entity to carry out an
approved project or activity.
Grassroots Lobbying – activities supporting the enactment, modification, or adoption of any law, regulation, or
policy at any level of government. 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. For additional information, see 2 CFR § 200.450.

I
Indirect Costs – costs that have been incurred for common or joint objectives with other programs and cannot
be readily identified with the LITC Program. After direct costs have been determined and assigned directly where
appropriate, indirect costs are those remaining to be allocated to a particular program. Direct cost of minor
amounts may be treated as indirect costs under the conditions described in 2 CFR § 200.413(d). A cost may
not be allocated to the LITC Program as an indirect cost if any other cost incurred for the same purpose, in like
circumstances, has been assigned to another Federal award as a direct cost. Indirect costs may be charged as a
use of federal funds based upon an approved Indirect Cost Rate Agreement or the de minimis rate of ten percent
allowed under 2 CFR Part 200. Indirect costs are not allowable as matching funds.
Intake – a process used by clinic staff to gather information from a taxpayer seeking assistance to determine
eligibility for services. LITCs must record the taxpayer’s income information on an intake form (paper or
electronic). LITCs must solicit income information from taxpayers seeking assistance 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 potential client, the LITC must make appropriate
inquiry to verify the information, in a manner consistent with the attorney-client relationship. LITCs must also
determine and document the amount in controversy during intake.
Individual Taxpayer Identification Number (ITIN) – a unique nine-digit number used for tax administration
purposes that is issued by the IRS to individuals who are not eligible to obtain a Social Security number (SSN).

L
Low Income Taxpayer – 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. A sole proprietor is
considered an individual and may be assisted if otherwise eligible. A business or other entity is not a low income

190

LOW INCOME TAXPAYER CLINIC

GLOSSARY

taxpayer eligible for LITC representation. An individual trying to resolve the individual’s tax liability arising from
involvement with a business can be a low income taxpayer. For example, an individual who is personally liable for
taxes owed from a business (e.g., a responsible person within the meaning of IRC § 6672) may be a low income
taxpayer, provided the individual otherwise meets the definition.

II I. LITC III
PROGRAMIV OVERVIEW
V

Low Income Taxpayer Clinic (LITC) – an organization receiving a grant pursuant to IRC § 7526 that represents
low income taxpayers in controversies with the IRS and that operates a program to educate low income and ESL
individuals about their rights and responsibilities under the IRC. Examples of a clinic include:
nn A

clinical program at an accredited law, business or accounting school in which students represent low
income taxpayers in controversies arising under the IRC; and

nn An

organization described in IRC § 501(c) and exempt from tax under IRC § 501(a) in which
employees and volunteers represent low income taxpayers in controversies with the IRS.

Local Taxpayer Advocate (LTA) – a delegate of the National Taxpayer Advocate (NTA) who is a manager in a
local jurisdiction and reports directly to the NTA. IRC § 7803(c)(2)(D)(i)(I) requires that each state have at least
one LTA who is independent of the local IRS office. Each LTA provides essential guidance and assistance to the
LITCs within his or her geographic area.

VIIII

APPENDICES
III
IV

verifiable from the grantee’s records;

nn Are

not included as contributions for any other federally assisted project or program;

nn Are

necessary and reasonable for proper and efficient accomplishment of project or program objectives;

nn Are

allowable under the applicable cost principles;

nn Are

Matching Funds – the portion of program costs not funded by federal funds. Grantees must provide matching
funds on a dollar-for-dollar basis for all LITC grant funds received. See IRC § 7526(c)(5), 2 CFR § 200.29, and
§ 200.306 for more information. Only funds that are used in direct support of the LITC Program qualify as
matching funds. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
2 CFR § 200.306 (and the Treasury Department’s implementation thereof at 2 CFR § 1000.306) 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:

VII GLOSSARY
VIII
APPENDICES

nn 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;

nn Are

provided for in the approved budget when required by the federal awarding agency; and

nn Conform

to other provisions of 2 CFR Part 200, when applicable.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

191

N
National Taxpayer Advocate (NTA) – the official who supervises and directs the Office of the Taxpayer Advocate.
The NTA reports directly to the IRS Commissioner and serves as the voice of the taxpayer within the IRS and
before Congress. The NTA is appointed by the Secretary of the Treasury following consultation with the IRS
Commissioner and the IRS Oversight Board. Final funding decisions are made by the NTA, unless recused. In
recusal situations, final funding decisions are made by the Deputy National Taxpayer Advocate.
Nominal Fee – a fee that is insignificantly small or minimal. A nominal fee is a trivial payment, bearing no
relation to the value of the representation provided, taking into account all the facts and circumstances. A
nominal fee does not include reimbursement for those costs actually incurred (photocopies, court costs, and
expert witness fees, for example).
Non-Competing Continuation (NCC) Request – A request for LITC grant funding submitted to the
LITC Program Office by using www.grantsolutions.gov on the specified forms and in accordance with LITC
instructions. Organizations already funded with a multi-year LITC grant that ends after December 31, 2018,
must submit an NCC request.

O
Office of Management and Budget (OMB) – the White House office that oversees the preparation of the federal
budget and supervises its administration in Executive Branch agencies. OMB evaluates the effectiveness of agency
programs, policies, and procedures, assesses competing funding demands among agencies, and sets funding
priorities. OMB ensures that agency reports, rules, testimony, and proposed legislation are consistent with the
President’s Budget and with Administration policies.
OMB Guidance – comprehensive principles issued by OMB that provide guidance relating to administration
of federal grant awards. Grant award administrative requirements are set forth in the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200 (and the Treasury
Department has implemented those requirements at 2 CFR Part 1000). The uniform guidance helps ensure
the highest integrity in the financial management and operation of federal grant programs, and strengthens
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
Operational Review Visit – a site assistance visit conducted by LITC Program Office staff to evaluate a clinic’s
overall operations and to provide technical assistance to help the grantee maintain compliance with the terms
and conditions of the LITC grant. During an operational review visit, an LITC Program analyst will interview
clinic personnel, examine intake procedures, review case management and reporting systems, and sample financial
records. An operational review visit may also include observation of clinic facilities and review of procedures
and internal controls, personnel policies, training plans, privacy and confidentiality policies, outreach plans and
materials, educational curricula, fee policies, and client satisfaction instruments. When monitoring and evaluating
clinic activities, the LITC Program Office will respect the clinic’s duty to protect confidential information, and

192

LOW INCOME TAXPAYER CLINIC

GLOSSARY

will not interfere with the confidential nature of the relationship between qualified representatives and their
clients. 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 visit at any time.

II I. LITC III
PROGRAMIV OVERVIEW
V

Orientation Visit – a site assistance visit to a grantee that did not receive a grant in the previous year. An
orientation visit generally occurs during the first 120 days of the grant 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 grantee may need to create systems or improve processes to
meet the requirements of the LITC Program.

Outreach Activities – efforts designed to publicize the clinic and its services to low income and ESL taxpayers.
Outreach activities may involve direct communication with taxpayers or be accomplished indirectly through other
organizations or groups that assist low income and ESL taxpayers. LITCs are encouraged to identify particular
linguistic populations, geographic service areas, or other segments of the low income taxpayer community in
which to focus outreach efforts. For new grantees, outreach plans should be completed in advance of the start of
the period during which representation and other assistance will be offered.

VIIII

APPENDICES
III
IV

Payment Management System (PMS) – an electronic system maintained by the Department of Health and
Human Services Division of Payment Management (DPM) that is used to pay federal funds. 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.

V
VI

Pro Bono Panel – a group of qualified representatives who do not charge a fee for representing or advising low
income or ESL taxpayers to whom low income taxpayers in need of LITC services may be referred.

VII GLOSSARY
VIII
APPENDICES

Program Plan – 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.
Program to Educate – an activity intended to educate taxpayers about their rights and responsibilities under the
IRC, with a focus on issues impacting low income and ESL taxpayers.
Publicity – see Outreach Activities.

GLOSSARY
INDEX

Qualified Business Administrator (QBA) – 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

LOW INCOME TAXPAYER CLINIC

193

demonstrate education or experience with business or program administration, such as internal controls, grant
funds management, budgeting, procurement, or the equivalent.
Qualified Representative – means a person who is an attorney, a certified public accountant, an enrolled
agent; an individual authorized to appear before the applicable court where the controversy with the IRS will
be adjudicated; or an individual authorized to practice before the IRS pursuant to 31 CFR § 10.7(d) (e.g., a
student, law graduate, tribal court advocate, or other individual for whom the IRS has issued a special appearance
authorization. For individuals other than students or law graduates, the Commissioner (or delegate) has the
authority to issue Special Appearance Authorizations to allow practice before the IRS. If the Director of the LITC
Program Office has authorized a student or law graduate to practice before the IRS, the student or law graduate
must be supervised by a qualified representative. See Delegation Order 25-18 (Rev. 2), IRM 1.2.52.19 (Sept. 9,
2015). An unenrolled return preparer who can practice before the IRS based upon return preparation is not a
qualified representative for purposes of the LITC program, because the authority of the unenrolled return preparer
to act as a representative is limited to only certain taxpayers and select functions of the IRS.
Qualified Tax Expert (QTE) – a staff member with sufficient tax law expertise to oversee technical substantive
and procedural tax matters. The QTE must be a qualified representative. The QTE is also responsible for
reviewing all educational materials for accuracy before distribution.

R
Referral Activity – the referral of low income taxpayers to a pro bono panel for representation or consultation.
Representation – 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.

S
Special Appearance Authorization – a letter issued by LITC Program Office that authorizes students and
law graduates working at an LITC to represent taxpayers before the IRS. Practice under a special appearance
authorization issued by the Director of the LITC Program Office is limited to students and law graduates at an
LITC or Student Tax Clinic Program working under the direct supervision of an individual authorized to practice
before the IRS. For additional information, see Section VI.C.xi, Representing Low Income Taxpayers.
Standards of Operation – baseline operational requirements applicable to all clinics developed by the LITC
Program Office to ensure that all programs provide consistent and quality service to low income and ESL
taxpayers.
Support Staff – a person that performs such activities as answering the phone, scheduling appointments, copying
materials, maintaining information on employees or volunteers, and maintaining timekeeping records.

194

LOW INCOME TAXPAYER CLINIC

GLOSSARY

nn Participating

in advocacy projects with professional organizations;
II I. LITC III
PROGRAMIV OVERVIEW
V

nn Commenting
nn Preparing

Systemic Advocacy – identifying and advocating for issues that impact low income and ESL taxpayers utilizing a
variety of methods, including but not limited to:

on proposed IRS regulations and guidance;

and filing an amicus brief to alert a court about the concerns of low income or ESL taxpayers;

nn Authoring

articles in scholarly journals or general interest publications;

nn Appearing

on television or radio to raise awareness about tax issues that affect low income or ESL

taxpayers;
nn Producing

public service announcements; or

nn Submitting

issues to the Systemic Advocacy Management System (SAMS), available through the IRS
website at www.irs.gov/Advocate/Systemic-Advocacy-Management-System-SAMS.

VIIII

Tax Counseling for the Elderly (TCE) – an IRS initiative designed to promote and support free tax counseling
and basic income tax return preparation for individuals aged 60 or over who cannot afford professional assistance.

APPENDICES
III
IV

Tax Compliance Officer – an individual responsible for handling the organization’s federal tax matters. Some
applicants are part of a larger organization (e.g., academic institution which operates a clinic), in which case
the LITC Program Office must be able to verify that the sponsoring organization does not have a federal tax
compliance issue before awarding grant funds. Applicants must also provide documentation (e.g., articles of
organization or a Form 2848) which shows how such individual referred to as a Tax Compliance Officer on
form 13424 is properly authorized to receive tax information to prevent the IRS from making an unauthorized
disclosure.

V
VI

Tax Return Preparation – an LITC 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 or is an ancillary part of the
LITC’s ESL education.

VII GLOSSARY
VIII
APPENDICES

Technical Assistance Consultation – a discussion with a practitioner or other service provider designed to give
brief advice about a tax issue.
Third Party In-Kind Contributions – the value of non-cash contributions provided as matching funds by parties
other than the federal government or grantee. Third party in-kind contributions may be in the form of goods,
space, or services donated to the LITC by third parties.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

195

U
Unallowable Expenses – expenses for which LITC grant funds may not be used according to restrictions
published by OMB, LITC Program Office, appropriations language, or the conditions outlined in the notice of
award.
Underserved Area – an identifiable geographic area where the need for LITC services exceeds the capacity
available from current grantees.
Unused Funds – the portion of grant funds awarded to clinics that have not been spent, whether or not those
funds have been drawn down from PMS. If a grantee determines that it will not spend its entire award, the
grantee should immediately notify the LITC Program Office.

V
Volunteer Income Tax Assistance (VITA) – an IRS initiative designed to promote and support free tax return
preparation for low to moderate income individuals who cannot afford professional assistance.

196

LOW INCOME TAXPAYER CLINIC

INDEX

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

VII

INDEX
VIII
APPENDICES

GLOSSARY
INDEX

197

LOW INCOME TAXPAYER CLINIC

90/250 requirement 45

direct expenses 22
direct lobbying 65

disallowed costs 58

allowable expenses 21, 64
amount in controversy, defined 5

amount in controversy limit 49

education 1, 10, 37, 54

appropriation 9

educational activities 6, 10, 38, 55
eligibility screening 12, 29

Employer Identification Number (EIN) 18, 19, 134

back-up file system 43

engagement letter 44

budget 69, 93

English as a Second Language (ESL) Taxpayers 1, 6,
10, 56, 97

Budget Information for Non-Construction Programs
93

family unit 45, 48

Case Management System 43

Federal Financial Report 133

Catalog of Federal Domestic Assistance (CFDA) 89,
94

Federal Poverty Guidelines 1, 7, 45

Changes in Program Plan or Budget 70

fees 13, 21, 27, 41

civil rights reporting requirements 120

fringe benefits 26, 95, 102, 108

Federal Register 45

clinic, defined 4, 7
clinic director 7, 35

close out 73

grant period 10, 93, 97, 102, 131, 175, 178

confidentiality 39

grassroots lobbying 65, 67

congressional district 86
congressional districts 90

consultation 6, 44, 141

indirect costs 22, 64, 95, 106

Continuing Legal Education (CLE) 55, 144

Individual Taxpayer Identification Number (ITIN)
37, 56

Continuing Professional Education (CPE) 35, 55,
144
controversy 6, 45, 145, 153

intake 44
Interim report 70, 72, 130, 150, 165, 175

controversy representation 10, 27, 46

198

LITC Grantee Conference 36

data breach 43

LITC Program Office 74, 78

Data Universal Numbering System (DUNS) 18, 19,
78, 88, 134

lobbying restrictions 65

direct costs 24, 95, 105, 107, 164
See also direct expenses

Low income taxpayer 7

LOW INCOME TAXPAYER CLINIC

Local Taxpayer Advocate (LTA) 35, 75

INDEX

matching funds 5, 10, 12, 20, 24, 36, 42, 58, 61, 65,
73, 76, 80, 93, 95, 102, 108

site assistance visits 76

mentoring 31, 39

Standard Form 424 13, 16, 17, 84, 85, 86

special appearance authorization 8, 53, 78, 144
Standard Form 424A 84, 85, 93
Standard Form 425 72, 133

National Taxpayer Advocate 32, 66, 74, 81

standards of operation 34, 58

networking 39

Start-Up Expenses 20

nominal fee 1, 4, 7, 13, 56, 142

student 4, 7, 8, 12, 25, 51, 52–54, 75, 78, 138, 143,
144, 158

Non-Competing Continuation (NCC) Request 10,
15, 17, 19, 30, 58, 69, 78, 84, 93, 97

subgrants 10
System for Award Management (SAM) 14, 18, 78,
87, 97

operational review visit 76, 77

orientation visit 76

Tax Compliance Officer 13, 16, 85, 98

outreach 1, 6, 7, 29, 37, 43, 52, 77, 138

Tax Counseling for the Elderly (TCE) 56

pro bono panel 35, 40, 41, 55, 61, 143
Pro bono panel 7
program to educate 8, 12, 57
Publicity 21

qualified representative 4, 8, 26, 27, 40, 44, 55, 76
Qualified Tax Expert (QTE) 7, 21, 34, 36, 55, 70, 98

R
referral 8, 38, 41, 44, 55, 138, 142

termination of a grant 81
third-party in-kind contributions 12, 24, 26, 71, 104,
162

U
unallowable expenses 21, 93, 102
unused funds 71

V
Volunteer Income Tax Assistance (VITA) 39, 56

GLOSSARY
INDEX

recordkeeping 6, 41, 43, 54

technical assistance consultation 39, 141

INDEX
VIII
APPENDICES

Qualified Business Administrator (QBA) 7, 35, 70,
98

tax return preparer 39, 42, 55, 56, 142
See also tax return, tax return preparation

VII

tax return preparation 37, 56, 57, 142
See also tax return, tax return preparer

publicity 29, 37, 40, 67

tax return 6, 13, 39, 56, 138, 142
See also tax return preparer, tax return preparation

program plan 8, 17, 29, 31, 69, 85, 127, 175

tax library 36

APPENDICES
III
IV

Payment Management System (PMS) 28, 64, 79, 160

VIIII

systemic advocacy 150

Office of Management and Budget (OMB) 16, 45,
84, 130

II I. LITC III
PROGRAMIV OVERVIEW
V

volunteers 12, 21, 24, 29, 35, 38, 81, 143, 158

reporting responsibilities 69

LOW INCOME TAXPAYER CLINIC

199

Y
Year-End report 28, 70, 72, 73, 81, 131, 132, 150
Year-End report, deadline 130
Year-End reporting 44
year-end report, late submission of 73
Year-End report(s) 31, 43, 48, 51, 69, 76, 78, 133
Year-end reports post-termination 81

200

LOW INCOME TAXPAYER CLINIC

Publication 3319 (Rev. 5-2018) Catalog Number 26939S Department of the the Treasury Internal Revenue Service www.irs.gov

File Type	application/pdf
File Title	Publication 3319 (Rev. 5-2018)
Subject	Low Income Taxpayer Clinics (LITC) Grant Application Package and Guidelines
Author	TA:LITC
File Modified	2018-05-15
File Created	2018-05-15