Tax Justice Warriors

This week, Andrew Belter and William Schmidt look at some U.S. Tax Court topics.

First, the case Boechler v. Commissioner is before the U.S. Supreme Court where they have heard oral arguments.  In brief, an individual was a day late and missed the statutory deadline for a Collection Due Process hearing.  The Tax Court ruled that there was a strict jurisdictional deadline.  At issue before the Supreme Court is whether that deadline is jurisdictional or if equitable tolling can provide any relief.

Second, there was a discussion on the ABA Section of Taxation's Pro Bono and Tax Clinics Committee listserv regarding Answers from IRS Chief Counsel in Tax Court.  For years 1983-2007, the Tax Court did not require answers in S cases.  We discuss the pros and cons of Answers, plus suggestions for what could replace them.

Note:  the phrase we couldn't remember was financial disability.  William covered that topic way back in episode 55.  To learn more, you can also look at Internal Revenue Code section 6511(h), Rev. Proc. 99-21 or IRS Publication 556, page 15.

ID.me is a recent platform that the IRS was using as an online identity verification process for taxpayers to access self-help tools.  To verify their identity with ID.me, taxpayers needed to provide a photo of an identity document such as a driver's license, state ID or passport. They also needed to take a selfie with a smartphone or a computer with a webcam. Once their identity had been verified, the were able to access IRS online services.

Various people protested to Congress and that reached the IRS.  On February 7, 2022, the IRS announced it would transition away from using ID.me and its facial recognition tools to help authenticate people creating new online accounts. The transition was to occur over the following weeks in order to prevent larger disruptions to taxpayers during filing season.

During the transition, the IRS stated they would quickly develop and bring online an additional authentication process that does not involve facial recognition. The IRS stated they would “continue to work with its cross-government partners to develop authentication methods that protect taxpayer data and ensure broad access to online tools.”

On this episode, Andrew Belter and William Schmidt spoke with John Gilmore, Head of Research at Abine/DeleteMe.  The conversation started with how ID.me came to be used by the federal government and John’s concerns regarding ID.me, such as whether they are regulated and what they do with their data.  We discussed the IRS pivot away from facial recognition and that other state and federal government agencies are still using ID.me.  From there, we look at how this impacts low income taxpayers such as the complaints for people of color using facial recognition and how low income taxpayers do not have access to technology.

Well, before we started we didn’t think we had anything to talk about!  Andrew Belter (Wisconsin Judicare) and William Schmidt (Legal Aid of Western Missouri) caught up on recent tax news as the tax season is underway.  Access to transcripts with the CAF Unit and IRS budget restrictions from Congress are some of the topics.

The main portion of this episode is a discussion of the ABA 2022 Midyear Tax Meeting.  It was a virtual conference that took place from January 31 to February 4.  Hopefully we provided some insights in our preview of the event.  There are discussions that took place on topics such as diversity and ethics.  Updates on current events from the National Taxpayer Advocate Erin Collins, the IRS and the U.S. Tax Court.  Discussions of litigation that ranged from the U.S. Tax Court to the U.S. Supreme Court.  There are a variety of topics that should interest tax practitioners at American Bar Association Section of Taxation events.

Since the event has already happened, you have not necessarily missed out.  For American Bar Association members, the recordings are still available for 90 days after the meeting.  It is a bargain for LITC personnel to access the entire conference for $25.

The meeting was quite informative and it is always wonderful to see and speak with other tax professionals, even when it is all online.

Welcome to the tax filing season!  Andrew Belter and William Schmidt start with a discussion of reconciling the child tax credit with Letter 6419.  From there, we turn to differences between state and federal taxes.  For one, can you still find paper copies of your state tax forms at your local public library?  Who is faster at processing paper tax returns, the IRS or the state?  Does your state perform audits independently of the IRS?  Does the state follow IRS decisions regarding innocent spouse?  Is there a taxpayer advocate in your state?  What does that person do? 

Andrew and William talk through these questions based on their state tax experience.

Happy New Year 2022!  Andrew Belter and William Schmidt discuss what the year will hold regarding taxes.  The individual tax season will begin on January 24 and is expected to last through April 18 this year.

We discuss our outlook on the upcoming tax season and other items for the year.  This tax filing season, a difference will be reconciliation of the recovery rebate credit for the 3^rd stimulus payment and reconciling the advance child tax credit.  One suggestion I have heard is to make an appointment with your local Taxpayer Assistance Center if the amounts received by the taxpayer and the notice letter from the IRS do not match up.

Beyond that, what are our personal goals for our clinics and related items on our jobs?  We discuss deadlines, outreach, interviews for the podcast, and keeping a work balance without adding too much the workload.

Andrew Belter and William Schmidt do an end of year discussion.  They talk about the LITC conference and how the year has been working with the IRS.  Along with that, they discuss how the year went – moving from one LITC to another for each of them and some self-reflection on how outreach progressed during the year.

On this episode, Andrew Belter and William Schmidt discuss issues that the Taxpayer Advocate Service (TAS) is having in 2021.  Due to the IRS being backed up, taxpayers are contacting TAS for assistance.  While TAS normally provides assistance to taxpayers, the IRS and TAS are being contacted by taxpayers in record numbers.  As a result, TAS is difficult to reach and that means limited assistance for Low Income Taxpayer Assistance (LITCs).

Note:  It was not mentioned in the episode, but we heard from the National Taxpayer Advocate at a later point on guidance for LITCs.  If there are issues in contacting TAS, the LITCs need to reach out to their Local Taxpayer Advocate (LTA).  The LITCs need to build close working relationships with their LTAs during these difficult times.  Contact your LTA especially if a form 911 has been submitted and you have not heard anything – send it directly to the LTA if you are able!

Also, Andrew and William talk through some networking tips and help if you are dealing with stress during the holidays.

On this episode, Andrew Belter and William Schmidt review offers in compromise – what are some of the basics in making an offer and what are the types of offers?  There is also a discussion of offset bypass refunds – working with the Taxpayer Advocate Service to try and get a refund for a client who owes a past-due government debt.

Next, we turn to the look at a recent National Taxpayer Advocate blog post and discuss the changes the IRS recently brought to offers in compromise (OICs) and the offset bypass refund (OBR).

Two recent changes noted in the blog post:

• Not applying the current year refunds to the agreed-upon tax liability
• For hardship situations, the OBR remedy is now available during the pendency of an OIC

Andrew and William discuss how those changes provide assistance for low income taxpayers.

NTA Blog: IRS Initiates New Favorable Offer In Compromise Policies - Taxpayer Advocate Service

The IRS uses Frequently Asked Questions (FAQs) to quickly get information to the public regarding hot topics concerning taxes.  Most recently, the IRS has been using FAQs regarding stimulus payments and the advance child tax credit.  The IRS has been getting the word out about these topics to assist taxpayers to receive payments they are entitled to receive.

The public treats different IRS communications like FAQs as if they are reliable, but the IRS stance is that the FAQs cannot be relied upon in a court of law.  The FAQs might also change and disappear from the IRS website.  This creates a difficulty for any taxpayer relying upon IRS FAQs.

Most recently, the IRS has changed their stance regarding FAQs that any taxpayer relying upon those FAQs now has a stronger defense against penalties.

For a discussion of this change and updates regarding the LITC 2021 Bootcamp, tune in to hear the talk between William Schmidt and Andrew Belter.

Happy Halloween!  No tricks this time, just a treat.

This time we have a discussion of the filing status on tax returns.  William Schmidt asks Andrew Belter – what is the need for listing whether you are married or single on the tax return?  When the tax return started, traditional values supported marriage incentives.  Now, there have been changes in society with marriages leading to separated or divorced spouses, non-traditional families, same-sex marriages and more.  Is it worth having to prove marital status when there are audits by the IRS?

In the discussion, there are mentions of the marriage penalty, differences between state and federal tax filing, inequity between what is allowed for joint and married filing separate filers, and community state tax filing.  What changes would need to be made?  What about child-related tax benefits?

Also, there is a brief discussion of cryptocurrency.

Note:  we forgot to bring up phasing out innocent spouse and injured spouse issues and filing.