The IRS has announced that its Settlement Days program is going virtual in response to the COVID-19 crisis. Settlement Days bring together IRS attorneys, low-income taxpayers, who are not represented and the low income tax clinic attorneys who coach them to see if they can, you know, settle.
“Chief Counsel has scheduled Virtual Settlement Days events for May 2020 for cases docketed on the Detroit and Atlanta Tax Court trial sessions. Chief Counsel has invited more than 100 unrepresented taxpayers to meet with Chief Counsel attorneys or paralegals via WebEx for the two events. The taxpayers will be able to speak with LITC representatives prior to the WebEx meetings. If the taxpayer desires, the LITC representatives will later join the WebEx meetings.”
That’s just for starters. And here is the really interesting observation.
“Chief Counsel anticipates that Virtual Settlement Days will be a mainstay of its Settlement Day efforts even after this crisis is over.”
About The Tax Court
The Tax Court is a busy court. There were over 23,000 cases docketed in 2019. And the cases can kick around for quite a while. Scanning last month’s decisions, the greatest number were docketed in 2018 but several were earlier with one of them going back to 2009. (Here is a pro tip. The last two digits of the docket number are the year it was docketed.) Of course most cases don’t get opinions. They are settled or sometimes abandoned.
And it is a very accessible court. If you get a Notice of Deficiency from the IRS, you will be informed of your right to petition the Tax Court. Likewise if you are dissatisfied with the result of a Collection Due Process Hearing or your organization’s request for recognition of exempt status, you can file a Tax Court petition. And if your spouse says they are innocent and should not have to chip in for the deficiency, you can intervene and set the court straight on how innocent they aren’t.
Many Unrepresented Petitioners
A lot of people represent themselves in Tax Court. That it is why you don’t need to watch situation comedies or reality TV if you read Tax Court decisions like I do. Some of them, particularly lawyers and engineers, represent themselves because they are so smart. That often does not end well. Others do so because they can’t afford representation or the stakes are too low to make it worthwhile.
There was one taxpayer that represented himself on a three hundred dollar deficiency and lost. Ruth Bader Ginsburg and her husband represented him on appeal and from that we got a major motion picture – On The Basis of Sex.
Why We Need The Clinics
At any rate, easy as it is for an unsophisticated person to get their foot in the Tax Court door, the process can be somewhat bewildering, which is where the clinics come in.
Among the law schools that have clinics is that one in Cambridge, MA that RBG went to for a while.
“Students in the Federal Tax Clinic represent low-income taxpayers in controversies with the IRS, both before the IRS and in federal court. Students will work individually and in teams to represent taxpayers involving examinations, administrative appeals, collection matters and cases before the United States Tax Court and Federal District Courts.”
Seems Like A Good Idea
I asked Keith Fogg who directs the Harvard clinic and blogs at Procedurally Taxing how he thought the virtual Settlement Days might work. He wrote me:
“I think that virtual settlement days have the possibility to work better than regular settlement days.
I have been involved in two settlement days. We tried it once in Philadelphia when I was running the clinic at Villanova and no one showed up. We advertised it poorly and also held it at the IRS attorneys’ office which was downtown and rather difficult to reach.
At an ABA Tax Section meeting I participated in one held at a law firm office which was well attended by taxpayers and volunteers. It was successful.
Getting taxpayers to travel is difficult. Some will try the online option. Some will be left out because of inadequate infrastructure to participate but on the whole I think this is worth a try. I am curious how the volunteer attorneys will bond with clients over the internet. If that can happen and if the attorneys can obtain enough information about the taxpayer’s case, the this has the possibility of succeeding.”
Other Coverage
Frank DiPietro recently provided commentary on the general program on the American Bar Association website.
I see that Kelly Erb has already posted on this on Forbes.com and she provides some additional information on the program. No pop culture references though.
Law 360 and Bloomberg have something behind their paywalls.