by John B. Hinton

I have the good fortune of directing the Low-Income Tax Law Clinic at the University of Idaho College of Law.  The Tax Clinic is one of the College of Law’s clinical programs, where law students build practical skills while helping clients who cannot afford to hire a lawyer.

Students in the Tax Clinic help low-income clients with their tax problems.  At first blush, the words “low-income” and “tax problems” may appear to be an unlikely combination – since some people might think “tax problems” affect mainly higher income taxpayers.  However, many lower income individuals also have tax problems even if they do not ordinarily pay income tax.

The Clients

What types of clients does the Tax Clinic represent?  Since the inception of the Tax Clinic in 2023, we have encountered clients with a diverse range of tax issues. Some of our clients are crime victims. For example, the taxpayer may have been a victim of fraud where the fraudster tricked the taxpayer into removing money from a retirement account, so the taxpayer not only loses money because of the fraud but is also taxed on the withdrawal. We have also had cases involving identity theft where someone else has reported income under the taxpayer’s social security number. The Internal Revenue Service (“IRS”) then mistakenly asserts a tax liability against the victim.

The IRS also audits many low-income taxpayers even though these folks do not pay taxes. Why?  The IRS may doubt the validity of taxpayers’ claims for refunds. In some audits, the IRS may question whether the taxpayer improperly claimed a tax credit, such as the child tax credit or earned income credit. Taxpayers working as independent contractors are also frequently targets for audit, with the IRS questioning both the amount of income and deductions. In 2023, the IRS recommended $39.6 billion of tax adjustments due to audit examinations.[i] Taxpayers with annual income between $1 and $25,000 accounted for $18,589,000 of adjustments.[ii] Federal income tax audits often result in parallel adjustments for state income tax liabilities. The Tax Clinic can assist with state income tax issues which are ancillary to a federal tax issue.

Other clients simply struggle to pay an outstanding tax liability from a prior tax year and want to work out a settlement or installment payment arrangement. In some cases, the person has so little income that the IRS has agreed to forego collection.

The Students

Students who work in the Tax Clinic are third year students at the College of Law who are granted a limited license to practice under the supervision of a licensed attorney.[iii]  The Tax Clinic gives them a chance to learn practical legal skills.  Clinic students learn how to interview clients, draft engagement letters, consider ethical issues, research substantive legal issues, consider federal tax procedure and administrative rules, and come up with a solution.  Sometimes this involves representation in the United States Tax Court or through the administrative processes of the IRS.

In addition to handling real legal issues presented by the clients themselves, students also study practical legal skills through class lectures.  The Tax Clinic always welcomes other lawyers interested in sharing practical advice to students through guest lectures.

Finally, students learn legal practice and management skills and tips on how to succeed as a law firm associate, including tracking mock “billable hours” for all their client work.

How the Clinic Works

Clients who come to the clinic are assigned to work with one or more students. Once assigned, the students typically set up a meeting with the client and their supervising attorney. After meeting with the client, the students prepare an engagement letter to be signed by the client, and then commence performing the legal services needed.

All the clinic students get together in a weekly meeting to discuss the matters they are working on with each other and their supervising professor. The students thus learn from each other and are exposed to legal issues presented by matters other than their own. In this way the clinic operates much like a law firm or practice group that has collaborative meetings among colleagues.

The relationship between the students and their supervising professor is also similar to that of a law firm associate and a partner in the firm. All work is reviewed by the supervising professor before presenting it to the client. However, students in the clinic generally have more direct contact with clients than do many law firm associates.

Students who participate in the clinic benefit from the experiential learning approach. They leave the clinic much better prepared to be an associate in a law firm or enter a governmental law practice. Although these students have already developed the skills of reading cases and understanding the law at an intellectual level, the Tax Clinic, and the other clinics at the U of I give students a chance to apply this knowledge to provide practical solutions to help their clients. The clinical experience thus completes a well-rounded legal education.