Publication 3319 (Rev. 4 2017) P3319

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LITC

LOW INCOME
TAXPAYER CLINICS

Representation • Education • Advocacy

2018 Grant Application Package and Guidelines

TABLE OF CONTENTS

MAY 2017
DEAR PROSPECTIVE LOW INCOME TAXPAYER CLINIC GRANT APPLICANT:
I am pleased to announce the opening of the 2018 Low Income Taxpayer Clinic (LITC) grant application
period, which runs from May 1 through June 20, 2017.
The LITC program 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 Low Income Taxpayer Clinic matching grants
authorized under Internal Revenue Code (IRC) § 7526 and instructions about how to apply for a matching
grant. This publication contains information about:
nnBasic

eligibility requirements;

nnStandards

of operation;

nnCompliance

requirements;

nnApplication

and selection process;

nnPost-award

requirements;

nnLITC

Program Office responsibilities;

nnApplication
nnReporting

forms and instructions; and

forms and instructions.

This publication, including the Appendix section, should be
retained for future reference by all LITC grant recipients.

Low Income Taxpayer Clinics (LITCs) ensure
the fairness and integrity of the tax system
for taxpayers who are low income or speak
English as a second language (ESL) by:
Providing pro bono representation on their
behalf in tax disputes with the IRS;
Educating them about their rights and
responsibilities as taxpayers; and
Identifying and advocating for issues that
impact low income taxpayers.

The IRS remains committed to achieving maximum access to representation for low income taxpayers
under the terms of this grant program. Thus, in awarding 2018 LITC grants, we will continue to work
toward the following program goals:
nnEnsuring

that each state (plus the District of Columbia and Puerto Rico) has at least one clinic;

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 to fund one-year to three-year project periods.

LOW INCOME TAXPAYER CLINIC

i

To be considered for 2018 LITC Program grant funding, all applications and continuation requests must
be submitted electronically by June 20, 2017, via www.grants.gov or www.grantsolutions.gov, respectively.
The cost of preparing and submitting an application or continuation request is the responsibility of each
applicant.
The LITC Program Office will notify each applicant in November 2017 about whether it was selected to
receive a matching grant for 2018.
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 LITCProgramOffice@irs.gov.
I appreciate your interest in the LITC Program and look forward to working with the 2018 Low Income
Taxpayer Clinic grantees to ensure the fairness and integrity of federal tax administration.
Sincerely,

Nina E. Olson
National Taxpayer Advocate

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,
Room, 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

TABLE OF CONTENTS

RESOURCES
IMPORTANT DATES FOR 2018 LITC GRANTEES
Application period		

May 1 – June 20, 2017

Program Office review and evaluation

June – October 2017

Notification of selection/non-selection

November 2017

LITC Grantee Conference

Early December 2017

Grant year		

January 1, 2018 – December 31, 2018

Interim report due		

July 30, 2018

Year-End report due		

April 1, 2019

CONTACTING THE 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. (EST), Monday – Friday

Phone:

202-317-4700

Fax:

877-477-3520

Email:

LITCProgramOffice@irs.gov

Address:

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

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

INCOME GUIDELINES TO DETERMINE ELIGIBILITY FOR LITC SERVICES
www.irs.gov/Advocate/Low-Income-Taxpayer-Clinics/Low-Income-Taxpayer-Clinic-Income-Eligibility-Guidelines

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

QUESTIONS RELATING TO SPECIAL APPEARANCE AUTHORIZATION FOR
STUDENT AND LAW GRADUATE PRACTICE
Phone:
Fax:

212-298-2295
212-298-2079

LOW INCOME TAXPAYER CLINIC

iii

LITC PROGRAM PUBLICATIONS
Publication 3319, Low Income Taxpayer Clinic (LITC) Grant Application Package and Guidelines
https://www.irs.gov/pub/irs-pdf/p3319.pdf
Publication 4134, Low Income Taxpayer Clinic List
http://core.publish.no.irs.gov/pubs/pdf/p4134--2017-01-00.pdf
Publication 5066, Low Income Taxpayer Clinic (LITC) Program Report
http://core.publish.no.irs.gov/pubs/pdf/p5066--2017-01-00.pdf

OTHER USEFUL RESOURCES
Dun and Bradstreet Data Universal Numbering System (DUNS)
Website:
fedgov.dnb.com/webform
Support:
866-705-5711
Email:
govt@dnb.com
System for Award Management (SAM)
Website:
www.sam.gov
Support:
866-606-8220
Submission of a Grant Application via Grants.gov
Website:
www.grants.gov
Support:
800-518-4726
Email:
Support@grants.gov
Submission of a Continuation Request and Interim/Year-End Reports via Grantsolutions.gov
Website:
www.grantsolutions.gov
Email:
Beard.William@irs.gov
Department of Health and Human Services (HHS) Payment Management System
Website:
www.dpm.psc.gov
Support:
877-614-5533
Email:
PMSSupport@psc.gov
Civil Rights Protection
Website:
https://www.irs.gov/uac/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
Taxpayer Advocate Service Taxpayer Toolkit
Website:
www.TaxpayerAdvocate.irs.gov
United States Tax Court
Website:
www.ustaxcourt.gov

TABLE OF CONTENTS

TABLE OF CONTENTS
The organization of this publication represents a progression of the LITC grant process and administration
including the following information:

I.

LITC PROGRAM OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
A. History of the LITC Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. Types of Grants Awarded by the LITC Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Core Terms and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

II.

GRANT RECIPIENT ELIGIBILITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7
A. Subgrants are Prohibited  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
B. Requirements for Providing LITC Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C. Start-Up Expenses may be Paid Using LITC Grant Funds  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. Compliance with Federal Tax and Federal Nontax Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 9
E. Civil Rights Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
F. Other Assurances and Certifications  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

III. HOW TO APPLY FOR AN LITC GRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
A. Application Process  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. Completion and Submission of the LITC Grant Application Package  . . . . . . . . . . . . . . . . . . . . 17
C. Completion and Submission of a Non-Compete Continuation Request  . . . . . . . . . . . . . . . . . . 18
D. Eligible LITC Grant Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
E. Notice of Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

IV. STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC . . . . . . . . . . . . . . . . .  24
A. Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
B. Infrastructure and Resources  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
C. Developing a Community Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
D. Publicizing LITC Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
E. Building Community Partnerships  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
F. Networking With Other Clinics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
G. Mentoring and Technical Assistance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
H. Maintaining Client Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
I. Volunteers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
J. Recordkeeping and File Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

V.

STANDARDS FOR PROVIDING TAXPAYER SERVICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
A. Representation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
B. Education  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

LOW INCOME TAXPAYER CLINIC

v

C. Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
D. Preparing Tax Returns and ITIN Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

VI. COMPLIANCE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
A. Uniform Administrative Requirements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
B. Civil Rights Protection Responsibilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
C. Lobbying Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
D. Spending LITC Grant Funds and Matching Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
E. Meeting the Matching Funds Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

VII. POST-AWARD REQUIREMENTS OF GRANTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
A. Events Requiring Notification to the LITC Program Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
B. Managing Grant Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
C. Reporting Responsibilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

VIII. LITC PROGRAM OFFICE RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
A. Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
B. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
C. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
D. Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
E. Sight Assistance Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
F. Suspension or Termination of a Grant  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
G. Grant Close Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

APPENDIX A: INFORMATION FORMS FOR LITC GRANT APPLICATIONS AND
CONTINUATION REQUESTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
APPENDIX B: BUDGET FORMS FOR LITC GRANT APPLICATIONS AND
CONTINUATION REQUESTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
APPENDIX C: FORMS FOR REPORTING LITC GRANTEE ACTIVITIES  . . . . . . . . . . . . . . . 111
COMMONLY USED ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

I.

LITC PROGRAM OVERVIEW

A. HISTORY OF THE LITC PROGRAM
I. LITC PROGRAM OVERVIEW

As part of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98), Congress enacted
IRC § 7526 to authorize funding for the LITC grant program. Subject to the availability of appropriated funds,
the IRS may award grants of up to $100,000 per year to qualifying organizations for the development, expansion,
or continuation of an LITC.
The program is designed to protect 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. Many low income taxpayers are also individuals for whom English is a second language (ESL
taxpayers). Consequently, Congress authorized funding for organizations to provide outreach and education
about taxpayer rights and responsibilities to ESL taxpayers in addition to representing low income taxpayers in
controversies with the IRS.

II

In June 2014, the IRS adopted the Taxpayer Bill of Rights — a set of ten fundamental rights that taxpayers
should be aware of when dealing with the IRS.1 One of those ten rights is the right to retain representation,
which gives taxpayers the right to retain an authorized representative of their choice to represent them in their
interactions with the IRS. In addition, taxpayers have the right to be informed that if they cannot afford to
hire a representative, they may be eligible for assistance from an LITC. In December 2015, Congress enacted
IRC § 7803(a)(3), which requires the Commissioner to ensure that employees of the IRS are familiar with and act
in accord with taxpayer rights, including the right to retain representation.2

III
IV

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)).

V

Figure 1, States With at Least One LITC Grantee, 1999 and 2016

VI
VII
VIII
APPENDICES

States with at Least One LITC Grantee – 1999

States with at Least One LITC Grantee – 2016

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

1

In 1999, the IRS awarded grants totaling less than $1.5 million to 34 entities located in 18 states and the District
of Columbia. In 2016, the IRS awarded over $11.4 million in grants to 138 entities located in 49 states and the
District of Columbia.

Representation, Education, and Advocacy Are the Primary Functions of LITCs
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

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OVERVIEW

(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.

I. LITC PROGRAM OVERVIEW

(3) Multi-year grants. Upon application of a qualified low-income taxpayer clinic, the Secretary is authorized
to award a multi-year grant not to exceed 3 years.
(4) Criteria for awards. In determining whether to make a grant under this section, the Secretary shall
consider—
(A) the numbers of taxpayers who will be served by the clinic, including the number of taxpayers in the
geographical area for whom English is a second language;
(B) the existence of other low-income taxpayer clinics serving the same population;
(C) the quality of the program offered by the low-income taxpayer clinic, including the qualifications of its
administrators and qualified representatives, and its record, if any, in providing service to low-income
taxpayers; and
(D) alternative funding sources available to the clinic, including amounts received from other grants and
contributions, and the endowment and resources of the institution sponsoring the clinic.
(5) Requirement of matching funds. A low-income taxpayer clinic must provide matching funds on a dollarfor-dollar basis for all grants provided under this section. Matching funds may include—

II

(A) the salary (including fringe benefits) of individuals performing services for the clinic; and
(B) the cost of equipment used in the clinic.

III

Indirect expenses, including general overhead of the institution sponsoring the clinic, shall not be counted as
matching funds.

IV
V

B. TYPES OF GRANTS AWARDED BY THE LITC PROGRAM OFFICE

VI

A grant may be awarded for up to a three-year period. However, funding is provided for one-year periods
(January 1 – December 31), subject to the availability of annually appropriated funds. First-time applicants may
request a one 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.

VII
VIII

New applicants and current grantees whose single year or multi-year grant period will end on December 31, 2017,
must submit an application. A recipient of an LITC grant entering the second or third year of a multi-year grant
in 2018 must submit a Non-Compete Continuation (NCC) request, in lieu of an application. See Section III,
How to Apply for an LITC Grant.

APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

With respect to multi-year grant awards, the second and third years will be funded subject to satisfactory
performance, compliance with the conditions outlined in the notice of award, and availability of appropriated
funds. All grant funds awarded must be used for the program specifically authorized in the notice of award.
Figure 2 explains how the LITC Grant Program receives its funding.

3

Figure 2, How the LITC Program Receives
Funding
How theItsLITC
Program Receives Its Funding
Step Four
Step Three
Step Two
Step One
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.

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.

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

C. CORE TERMS AND DEFINITIONS
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. 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. For additional rules with regard to
calculating the amount in controversy, see Section V. A, Representation.
Clinic means 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 individuals for whom English is a second
language about their rights and responsibilities under the Internal Revenue Code. Examples of a clinic include:
nnA

clinical program at an accredited law, business or accounting school in which students represent low
income taxpayers in controversies arising under the Internal Revenue Code; and

nnAn

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.

4

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OVERVIEW

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.

I. LITC PROGRAM OVERVIEW

Controversy means 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 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 and certain civil actions arising under the Internal Revenue
Code, 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.

II

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. In order 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 a
free training session at a local social services organization to educate case workers about earned income tax credit
(EITC) eligibility rules to so they can better assist their clients.

III
IV

Low income taxpayer means an individual whose income does not exceed 250 percent of the Federal Poverty
Guidelines, as determined in accordance with official guidance published by the federal government. A business
or other entity is not a low income 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. 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 V. A, Representation, of this publication.

V
VI
VII
VIII

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, taking into account all the facts and circumstances. A fee
does not include reimbursement for actual costs incurred (e.g., photocopies, court costs, and expert witness fees).
A nominal fee must be a flat fee; the fee cannot fluctuate based on an hourly rate, the type of services the LITC is
providing, and if being charged, must be paid by every taxpayer receiving representation from the LITC.

APPENDICES

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

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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

5

Program to educate means the conduct of an activity intended to educate both low-income taxpayers and
individuals for those for whom English is a second language (ESL) about their rights and responsibilities under
the Internal Revenue Code. For additional information, see Educational Activities.
Program plan means an outline of a clinic’s planned operations, including a description of the particular services

to be offered, how the services will be delivered, the intended recipients of the services, and numerical goals.
Qualified representative means an attorney, certified public accountant, or enrolled agent who is authorized to

practice before the IRS. The term qualified representative also means 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). Thus, a student or law graduate working under the
supervision of a qualified representative is a qualified representative if the Director of the LITC Program Office
has authorized that student or law graduate to practice before the IRS. See Delegation Order 25-18 (Rev. 2),
IRM 1.2.52.19 (Sept. 9, 2015). In addition, the term qualified representative means an individual authorized
to appear before the applicable court where the controversy with the IRS will be adjudicated. 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.
Note: For more information on student representation of taxpayers, see Section V. A, Representation.
Referral activities for which grant funds may be spent are the referral of low income taxpayers to a pro bono panel

for representation or consultation.
Representing a taxpayer in a controversy means acting as an agent of the taxpayer in an advocacy capacity in a

matter before the IRS, the United States Tax Court, another federal court, or before a state or local tax authority
when the clinic is representing the taxpayer in a related federal controversy. Fact finding or advice alone is not
representation.

6

LOW INCOME TAXPAYER CLINIC

II. GRANT RECIPIENT ELIGIBILITY
I
I. LITCII.PROGRAM
GRANT RECIPIENT
OVERVIEW
ELIGIBILITY

To receive an LITC grant, an organization must represent low income individual taxpayers in controversies with the
IRS and educate low income and ESL taxpayers about their rights and responsibilities as U.S. taxpayers. Additionally,
organizations must offer LITC services for free or for no more than a nominal fee (except for reimbursements of actual
costs incurred). LITCs are encouraged to devote a significant portion of their budget to staffing. Figure 3 displays a
sample budget breakdown for a clinic receiving a $100,000 LITC grant.

Figure 3, Sample Budget Broken Down by IRS Grant and Matching Funds
Sample Budget Broken Down by IRS Grant and Matching Funds
Federal Funds

STAFFING

Matching Funds

$ 85,734 + $ 115,353

Personnel

$71,405

Volunteer Services

Total Budget

=

$ 201,087

$59,383

$36,086

Fringe Benefits

Percent of
Budget Allocation

$19,884

86.5%

$130,788

|

55.7%

$36,086

|

16.3%

$34,213

|

14.6%

$14,329

II

2,201

$

6,849

$

9,050

3.9%

TRAVEL

$

1,995

$

2,166

$

4,161

1.8%

EQUIPMENT

$

87

$

222

$

309

0.1%

OTHER
EXPENSES

$

2,710

$

7,881

$

10,591

4.6%

INDIRECT
EXPENSES

$

7,273

$

0

$

7,273

3.1%

$ 232,471

100%

IV IV

$

(i.e., Rent, Utilities)

III III

CONTRACTUAL

V
V VI
VI VII
VII
VIII

$ 132,471

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

$ 100,000

APPENDICES

TOTAL
EXPENDITURE

7

A. 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.

B. REQUIREMENTS FOR PROVIDING LITC SERVICES
At least 90 percent of the taxpayers represented must have incomes that do not exceed 250 percent of the Federal
Poverty Guidelines and the amount in controversy for any taxable year generally must not exceed the amount
specified in IRC § 7463 for eligibility for special small case procedures in Tax Court (currently $50,000) (see
Section V. A, Representation).
A grantee may provide qualifying LITC services within a broader spectrum of activity. A grantee may provide
representation in nontax matters as well as representation in tax matters as long as 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.

Matching Funds Are Required on a Dollar-for-Dollar Basis
IRC § 7526(c)(5) requires grantees to provide matching funds on a dollar-for-dollar basis for all federal funds
awarded by the IRS. Only funds that are used in direct support of the LITC Program qualify as matching funds.

What Contributions Qualify as Matching Funds?
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,
2 CFR § 200.306 provides that all contributions, including cash and third-party in-kind, shall be accepted as part
of the grantee’s cost sharing or matching when such contributions:
nnAre

verifiable from the grantee’s records;

nnAre

not included as contributions for any other federally assisted project or program;

nnAre

necessary and reasonable for proper and efficient accomplishment of project or program objectives;

nnAre

allowable under the applicable cost principles;

nnAre

not paid by the federal government under another award, except where authorized by the federal statute
to be used for cost sharing or matching;

nnAre

provided for in the approved budget when required by the federal awarding agency; and

nnConform

8

to other provisions of 2 CFR Part 200, when applicable.

LOW INCOME TAXPAYER CLINIC

GRANT RECIPIENT ELIGIBILITY

I

Grant funds received from the Legal Services Corporation are not considered federal funds and
therefore can be used as a source of matching funds.
I. LITCII.PROGRAM
GRANT RECIPIENT
OVERVIEW
ELIGIBILITY

For more detailed information regarding the matching funds requirement, see Section VI. E, Meeting the Matching
Funds Requirement.

Charging More Than a Nominal Fee for Services Is Prohibited
An LITC may not charge more than a nominal fee for its services, although reimbursement of actual costs
incurred (e.g., photocopying, court costs, and expert witness fees) is permitted. 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 the amount that a
clinic charges 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.

II

C. START-UP EXPENSES MAY BE PAID USING LITC GRANT FUNDS
III III

An applicant may be awarded an LITC grant for the full grant year although it anticipates that it will not begin
representing taxpayers until after the start of the grant year. An applicant may also be awarded a grant although it
anticipates that it will not begin representing taxpayers until after the close of the grant year for which the grant is
awarded. 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. In addition, LITC grants to these applicants will be conditioned on
the conduct of qualifying activities during the immediately succeeding grant year; however, grant funds for the
immediately succeeding grant year are not guaranteed to be awarded.

IV IV
V
V VI
VI VII

D. COMPLIANCE WITH FEDERAL TAX AND FEDERAL NONTAX OBLIGATIONS

VII
VIII

An applicant must be in full compliance with its federal tax responsibilities when applying for an LITC grant
and also throughout the grant year. Standard Form 424 (Appendix, 81–85) asks whether the applicant
is delinquent on any federal debt. In general, funds will not be awarded to an applicant with any outstanding
federal nontax debt. The LITC Program Office utilizes the Do Not Pay List to determine ineligible grant
recipients and prevent improper payments. See donotpay.treas.gov for more information.

APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

To facilitate the resolution of any potential 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. Failure to provide an appropriate
contact could delay application processing or the receipt of grant funds.

9

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 funded organization that has entered into and remains current with an installment
agreement or other payment arrangement with the federal government will be considered in compliance with any
federal tax or nontax obligation and will be eligible for funding.

E. CIVIL RIGHTS REVIEWS
To the extent necessary to make a Civil Rights Compliance determination, the Civil Rights Division (CRD) of
the IRS may request additional data only to the extent that it is readily available or can be compiled within 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 CRD staff member will review each grant application and continuation request for compliance with civil rights
reporting requirements. Upon completion, the CRD will forward a preliminary civil rights determination based
on the information in the grant application or continuation request to the LITC Program Office. No LITC
grant funding may be awarded until the CRD has made a preliminary determination of probable or conditional
compliance. Department of Justice regulations state that all federal agency staff determinations of Title VI
compliance shall be made by or be subject to review by the agency’s civil rights office.
The CRD annually conducts selected post-award reviews to ensure civil rights requirements are in place and to
provide technical assistance. The following are examples of civil rights compliance items addressed during site
reviews:
nnExternal

building accessibility (e.g., accessible entrances, curb cuts, 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,
the organization’s non-discrimination policy posted and disseminated in marketing);

10

LOW INCOME TAXPAYER CLINIC

GRANT RECIPIENT ELIGIBILITY

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

I

nnAccommodations

documents); and
nnAccommodations

I. LITCII.PROGRAM
GRANT RECIPIENT
OVERVIEW
ELIGIBILITY

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

The results from the selected site reviews are compiled into a report and provided to the Office of the Taxpayer
Advocate.

Contacting the Civil Rights Division
For additional information on civil rights requirements, see Publication 4454, Your Civil Rights are Protected, or
contact the Operations Director, Civil Rights Division at edi.civil.rights.division@irs.gov. If you believe you’ve
been discriminated against, send a written complaint to:
Director, Civil Rights Unit
Office of Equity, Diversity and Inclusion
Internal Revenue Service, Room 2413
1111 Constitution Avenue NW
Washington, DC 20224

II
III III

F. OTHER ASSURANCES AND CERTIFICATIONS

IV IV

Trafficking Victims Protection Act of 2000

V

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.

V VI
VI VII

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:

VII
VIII

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;

APPENDICES

b. Procure a commercial sex act during the period of time that the award is in effect;
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:

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

i. Destroying, concealing, removing, confiscating, or otherwise denying an employee access to that
employee’s identity or immigration documents.

11

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. Office of Management and Budget (OMB) has issued guidance to
establish requirements for grantees to report information about executive compensation in certain circumstances.
See 2 CFR Part 170.

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

12

LOW INCOME TAXPAYER CLINIC

GRANT RECIPIENT ELIGIBILITY

I

Certain Criminal Law Violations

I. LITCII.PROGRAM
GRANT RECIPIENT
OVERVIEW
ELIGIBILITY

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 disbarment 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 114-113,
Division E, Title VII, § 746 (2015); Public Law 114-223, Division C, § 101(a)(5) (2016), as extended by
Pub Law 114-254, § 101 (2016). If necessary, the LITC Program Office will advise grantees of any changes in
this prohibition for fiscal year 2018.
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
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.

II

At a minimum, an LITC grantee’s Conflicts of Interest Policy (“Policy”) must:
nnApply

III III

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

IV IV

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.
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 of Interest”
or “Conflict”).

V

nnCover

V VI

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.

VI VII

nnCover

VII
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

13

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
At this time, 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; 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.

Other Applicable Law 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 at 18 U.S.C. §§ 595, 598, 600-603;

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

nnWhistleblower
nnRules

protections at 41 U.S.C. § 4712;

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

nnEnvironmental

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

nnThe

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

Assurances of compliance are required for LITC funding, according to the “common rule” on non-procurement,
debarment, and suspension adopted by Department of Treasury at 31 CFR Part 19, Subpart C. An applicant
must certify that its organization and Clinic Director are not presently debarred or suspended from covered
transactions by any federal agency. In addition, an applicant must indicate that within the three-year period
before applying for a grant, its organization and Clinic Director have not been convicted of or had a civil
judgment rendered against them for fraud, theft or certain other offenses, and have not had one or more public
transactions terminated for cause or default. An applicant must also indicate that its organization and Clinic
Director are not presently criminally or civilly charged with certain offenses.
Additional assurances are required according to the governmentwide requirements for a drug-free workplace
(41 U.S.C. §§ 8101-06), adopted by the Department of the Treasury at 31 CFR Part 20, Subpart B and C, and
assurance of civil rights compliance, as specified above.

When an applicant submits Standard Form 424 and checks the box on line 21 marked “I agree,” the
applicant is agreeing to each of the assurance and certification provisions that accompany Standard
Form 424. The list of assurances and certifications is included in the Appendix on page 86.

14

LOW INCOME TAXPAYER CLINIC

III. HOW TO APPLY FOR AN LITC GRANT
I

A. APPLICATION PROCESS
II

An overriding goal of the LITC Program is to provide services to low income and ESL taxpayers in every state,
the District of Columbia and Puerto Rico. 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.

I. LITC PROGRAM
III. HOWOVERVIEW
TO APPLY FOR AN LITC GRANT
II

Preparing and submitting your grant application is a major undertaking. Take time to understand and review the
process well in advance of submitting an application. Prepare and start as early as possible.

Get Registered
Submitting an application for an LITC grant requires that the applicant organization be registered with
https://www.grants.gov/ and the System for Award Management (SAM). In order to register with SAM, the
organization will also need an Employer Identification Number (EIN) and a Data Universal Numbering System
(DUNS) number. 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.

System for Award Management

III

Applicants are required to register with the System for Award Management (SAM) prior to submitting a grant
application and are required to maintain an active SAM registration with current information at all times
during which they have an active federal award or an application under consideration. SAM is a web-enabled
governmentwide application that collects, validates, stores, and disseminates business information about the
federal government’s trading partners in support of the contract award, grants, and electronic payment processes.
To remain active in the SAM database after registration, the applicant is required to 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.

IV IV
V
V VI
VI VII

Employer Identification Number (EIN)

VII
VIII

If the applicant does not have an EIN, it should submit a request to the IRS to be assigned one. See Form SS-4,
Application for Employer Identification Number. The fastest way to get an EIN is online at www.irs.gov/ein. The
hours of operation are Monday to Friday, 7 a.m. to 10 p.m. Eastern Time.

APPENDICES

Data Universal Numbering System

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Applicants are required to provide a Data Universal Numbering System (DUNS) number with each 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 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

15

number may be obtained by calling 866-705-5711 or applying online at fedgov.dnb.com/webform. For more
information on the requirement, see 2 CFR Part 25.
Here is some of the basic information you need to know as you begin learning about or navigating this important
process.

If you are seeking an LITC grant award for the first time, or if a multi-year LITC grant that you’ve already
received ends on December 31, 2017, you must submit an LITC Grant Application in order to receive
2018 funding. See Section III. B, Completion and Submission of the LITC Grant Application Package.
If you are already funded with a multi-year LITC grant that ends after December 31, 2017, you must
submit a Non-Compete Continuation Request. See Section III. C, Completion and Submission of a NonCompete Continuation Request.
All grant application and continuation requests must be submitted by June 20, 2017.

APPLICATIONS SUBJECT TO FOIA REQUESTS
Grant applications may be released in response to Freedom of Information Act (FOIA) requests after
appropriate redactions have been made. Do not include any individual taxpayer information in the grant
application.

Figure 4, Overview of the Grants Process
How to Apply for an LITC Grant

Are you seeking continuation
of a multi-year award?
NO

Submit Grant Application
Package on Grants.gov for a
single-year or multi-year grant

16

LOW INCOME TAXPAYER CLINIC

YES

Submit a Continuation Request
on GrantSolutions.gov

HOW TO APPLY FOR AN LITC GRANT

I

B. COMPLETION AND SUBMISSION OF THE LITC GRANT APPLICATION
PACKAGE

II

If you are seeking an LITC grant award for the first time, or if a multi-year LITC grant that you’ve already
received ends on December 31, 2017, you must submit an LITC Grant application. To be considered for 2018
LITC Program grant funding, all continuation requests must be submitted by June 20, 2017.

I. LITC PROGRAM
III. HOWOVERVIEW
TO APPLY FOR AN LITC GRANT
II

Submit Applications on Grants.gov
The application must be submitted electronically via www.grants.gov. Use of grants.gov provides assurance
that required entries are not left blank on the standard forms and provides receipt acknowledgement when the
application is received by the LITC Program Office. The grants.gov website includes a narrated tutorial and
Frequently Asked Questions to help you use the system. The Funding Opportunity Number for the 2018 LITC
grant application is TREAS-GRANTS-052018-001.

Can I Withdraw My Application After Submission?
An LITC Grant Application 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 www.grants.gov. All withdrawals must be made in writing and faxed to 877-477-3520.

III

Sample Application Forms

IV IV

Copies of all required application forms and certifications, as well as instructions, are included in the Appendix
section of this publication for your review. General information and budget forms, including examples, can be
found in the Appendix. See Appendix A and B.

V

A complete LITC Grant Application consists of the following items, submitted through www.grants.gov and
prepared in accordance with the relevant instructions:

V VI

a. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (see Appendix);
b. Standard Form 424, Application for Federal Assistance (see Appendix);

VI VII

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

VII
VIII

e. IRS Form 13424-J, Detailed Budget Worksheet and Narrative (see Appendix);
f. Attachments Form (used to attach items g-j);

APPENDICES

g. Tax exemption determination letter, if applicable;*
h. Proof of academic accreditation, if applicable;*

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

i. 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;
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);* and

17

j. Indirect cost rate agreement, if applicable.*
* Items marked with an * must be submitted via the Attachments Form (which is incorporated into the
downloadable pdf from www.grants.gov).

Incomplete Submissions
An LITC grant application is considered incomplete if it fails to follow the instructions provided on the
appropriate application form or if the application is submitted after the receipt deadline — except in very rare
cases. Incomplete applications do not proceed further in the process and will not be reviewed.

C. COMPLETION AND SUBMISSION OF A NON-COMPETE CONTINUATION
REQUEST
If you are already funded with a multi-year LITC grant that ends after December 31, 2017, you must submit a
Non-Compete Continuation request. To be considered for 2018 LITC Program grant funding, all continuation
requests must be submitted by June 20, 2017.

Submit Continuation Requests on Grantsolutions.gov
All continuation requests must be submitted via www.grantsolutions.gov. Use of grantsolutions.gov provides
assurance that required entries are not left blank on the standard forms and provides receipt acknowledgement
when the entry is received by the LITC Program Office. Do not submit continuation requests via
www.grants.gov. The LITC Program Office will provide annual training on how to use the grantsolutions.gov
website to submit reports and continuation requests. Additional questions regarding use may be directed to
the Program Office at Beard.William@irs.gov. The Funding Opportunity Number for the 2018 LITC grant is
TREASGRANTS-052018-001.

Sample Forms
Copies of all required forms and certifications, as well as instructions, are included in the Appendix section of this
publication for your review. General information forms and budget forms, including examples can be found in
the Appendix.
Copies of all required forms and certifications, as well as instructions, for the submission of an NCC are included
in the Appendix section of this publication for your review.
A complete continuation request consists of the following items, submitted through www.grantsolutions.gov and
prepared in accordance with the relevant instructions (see Appendix A and B):
a. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (see Appendix);
b. Standard Form 424, Application for Federal Assistance (see Appendix);
c. Standard Form 424A, Budget Information – Non-Construction Programs (see Appendix);
d. IRS Form 13424-J, Detailed Budget Worksheet and Narrative (see Appendix);

18

LOW INCOME TAXPAYER CLINIC

HOW TO APPLY FOR AN LITC GRANT

I

e. Project Abstract, which includes the following information (see Appendix A, pages 94–95):
i. Numerical goals;

II

ii. Changes to the Program Plan; and

I. LITC PROGRAM
III. HOWOVERVIEW
TO APPLY FOR AN LITC GRANT
II

iii. Civil Rights Statement;
f. Most recent audited or unaudited 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; 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);* and
g. Indirect cost rate agreement, if applicable.*
* Items marked with an * must be submitted via an attachment. The LITC Program Office provides training
to grantees on how to use www.grantsolutions.gov.

D. ELIGIBLE LITC GRANT APPLICATIONS
Grant Period

III

The LITC Program may award grants for up to a three-year period to applicants evaluated under the award
process. Applicants that have never been awarded an LITC grant are not eligible for a multi-year award and may
only apply for a single-year grant award; experienced LITC grantees are eligible to apply for a multi-year 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.

IV IV
V

Organizations awarded a multi-year grant based on the selection and award process for the 2018 grant year
will not undergo formal evaluation of their program plans during the second or third year selection and award
process. However, multi-year recipients will be reviewed annually for satisfactory performance and progress in
meeting goals and objectives as well as compliance with grant terms. The funding level for subsequent years
will be reviewed annually and may be increased or decreased at the discretion of the IRS, based on performance,
compliance with grant terms, and the availability of annually appropriated funds. Awarding of multi-year grants
is at the discretion of the IRS.

V VI
VI VII
VII
VIII

Eligibility Screening

APPENDICES

All LITC grant applications will undergo a preliminary eligibility screening. Applications will be reviewed to
determine that the application package is complete and satisfies the following criteria:
nnRequests

a single year grant or a multi-year grant of up to 3 years;

nnRequests

no more than $100,000 in grant funding;
GLOSSARY
INDEX

nnBudget

provides for dollar-for-dollar matching funds; and

nnApplicant

has an active SAM registration.

LOW INCOME TAXPAYER CLINIC

19

All applications undergo a civil rights review by the Civil Rights Division of the IRS. The LITC Program Office
will also conduct a review to verify that the applicant is:
nnIn

compliance with all federal tax obligations;

nnIn

general compliance with all federal nontax obligations; and

nnNot

disbarred or suspended (2 CFR Part 180), or otherwise excluded from or ineligible for a federal grant
award.

Applicants that fail to satisfy the eligibility screening criteria will be notified and provided an opportunity to
correct the problem. Applications that are not corrected in a timely manner will be eliminated from the award
process. Applications that pass the eligibility screening will then undergo a technical evaluation. For additional
information, see Section III.E, Application Evaluation Process.

For purposes of this grant program, entering into and remaining current with respect to an installment
agreement or other payment arrangement with the federal government to satisfy any outstanding
federal obligations constitutes being in compliance.

Application Evaluation Process
Applications that pass the eligibility screening process will undergo a two-tiered evaluation process. Applications
will be subject to both a technical evaluation and a Program Office evaluation.

Technical Evaluation
During the technical evaluation, each application will be reviewed using the criteria listed below and awarded
points based on the information provided in the application. 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 as stated elsewhere in this Publication.
Points will be assigned as follows:
Experience (Maximum 10 points)

Experience in operating a low income taxpayer clinic or delivering representation and education services to low
income and ESL taxpayers.
Financial Responsibility (Maximum 10 points)

Quality of grant administration and internal accounting procedures.

20

LOW INCOME TAXPAYER CLINIC

HOW TO APPLY FOR AN LITC GRANT

I

Program Performance Plan (Maximum 75 points)

nnAmount

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

of time devoted to the program by clinic staff;

nnComprehensiveness

of services to be provided;

nnProcedures

for ensuring the confidentiality of taxpayer information;

nnProcedures

for monitoring and evaluating program results;

nnPublicity
nnDates

I. LITC PROGRAM
III. HOWOVERVIEW
TO APPLY FOR AN LITC GRANT
II

nnQualifications,

II

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

and outreach plans; and

and hours of clinic operation.

Program Coverage (Maximum 5 points)

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.

III

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.

IV IV

Figure 5, Grants Evaluation and Scoring Process

10

10

75

V VI

Technical
Evaluation

V

Grants Evaluation and Scoring Process

5

VI VII

100 points
Experience

Financial Responsibility

Program Performance Plan

Program Coverage

VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

21

Program Office Evaluation
After the completion of the technical evaluation, applications will undergo a secondary review by the LITC
Program Office. This evaluation will be based on the information contained in the program plan, as well as the
applicant’s performance history in the LITC Program, if applicable.
Review of New Applicants

The LITC Program Office will perform a general review of the application and proposed program plan. The
review will consider the quality of the proposed program, the soundness of the proposed budget, and any
significant concerns identified during the technical evaluation.
Review of Funded Grantees Submitting a Continuation Request

The LITC Program Office will perform a general review of the application, proposed budget, and program plan,
as well as a more detailed review of the grantee’s performance history in the LITC Program. The review will
consider:
nnTimeliness,
nnAny

accuracy, and completeness of Interim and Year-End reports;

significant concerns identified by site assistance visits and how the grantee addressed those concerns;

nnWhether

the grantee’s activities match its program plan;

nnGrantee’s

involvement with other tax clinics, community groups, the Taxpayer Advocate Service (TAS), and
the LITC Program Office;

nnWhether

the grantee has a history of not drawing down funds in a timely manner; and

nnWhether

the grantee has failed to use all funds awarded in prior years.

Additional Considerations

Grant funds may be withheld or denied based on an applicant’s failure to be in full compliance with all civil rights
requirements or federal obligations, or a determination that the applicant is currently suspended or disbarred from
receiving a federal grant award.
To foster parity regarding clinic availability and accessibility for low income and ESL taxpayers nationwide, the
LITC Program Office will consider an applicant’s geographic coverage area, the number of low income and ESL
taxpayers assisted, and the languages in which assistance will be provided to taxpayers.
If applications are submitted by more than one clinic sponsored by the same institution or organization, the LITC
Program Office will consider all factors surrounding the operation of the clinics, including the geographic area(s)
served by the clinics and the comprehensiveness of the services to be provided, in determining whether and in
what amount grants will be made to one or more such clinics.
For academic clinics, which may assist fewer taxpayers than non-academic clinics because of the time involved
in teaching and mentoring students, the LITC Program Office will consider additional ways in which academic
clinics can accomplish LITC Program goals (e.g., providing technical assistance, training, and mentoring to other
LITCs, publishing articles about the LITC Program, commenting on proposed Treasury regulations that affect
low income or ESL taxpayers, and monitoring graduates to determine whether they perform pro bono work on
behalf of or otherwise assist low income taxpayers).

22

LOW INCOME TAXPAYER CLINIC

HOW TO APPLY FOR AN LITC GRANT

existence of other clinics representing the same population of low income taxpayers;

nnOther

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

I. LITC PROGRAM
III. HOWOVERVIEW
TO APPLY FOR AN LITC GRANT
II

nnReasonableness

II

nnThe

I

The decision of whether or not to award grant funds will be based on the technical evaluation, Program Office
evaluation, and the following additional considerations:

sources of funding available to the clinic.

Final funding decisions are made by the National Taxpayer Advocate, unless recused. In recusal situations, final
funding decisions are made by the Deputy National Taxpayer Advocate.

E. NOTICE OF AWARD
When Will I Know If I Have Been Selected to Receive an Award?
The LITC Program Office will notify all applicants no later than November 2017 whether or not they have been
selected to receive a 2018 grant award. However, no specific award amount information will be available until
after Congress appropriates funding for fiscal year 2018.

III

The LITC Program Office will issue a notice of award to each applicant selected to receive funding for the grant
year. The notice of award states the amount of funding awarded 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. If an applicant incurs
expenses and a grant is not awarded, all costs incurred will be the responsibility of the applicant.

IV IV
V

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
accompanied by a Notice of Award amendment stating the revised award amount.

V VI
VI VII
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

23

IV. STANDARDS FOR OPERATING A LOW INCOME
TAXPAYER CLINIC
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.

A. STAFFING
LITCs are required to fill the following positions:
Qualified Tax Expert (QTE): The 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.
Qualified Business Administrator (QBA): The QBA is a staff member with sufficient business administration
expertise to oversee the clinic’s business operations. If a department, as opposed to a single individual, fulfills
this requirement, please provide details about the staff member who oversees the department. The QBA must
demonstrate education or experience with business or program administration, such as internal controls, grant
funds management, budgeting, procurement, or the equivalent.
Clinic Director: The 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-today 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)’s office.

B. INFRASTRUCTURE AND RESOURCES
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. That
individual must be an attorney, certified public accountant, or enrolled agent currently authorized to practice
before the IRS. 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. Staff or volunteers who do not meet the
definition of qualified representative may nonetheless participate in providing representation services, provided
their work is supervised by a qualified representative on behalf of the clinic.

24

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC

I

Requirement to Maintain a Physical Location

II

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.

III PROGRAM OVERVIEW
IV. STANDARDS FOR OPERATING
I. LITC
II A LITC
III

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.

Requirement to Provide Training
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. The clinic director
is required to ensure and document that the LITC staff, volunteers, and other program participants receive
appropriate training to enhance skills. Clinic staff and volunteers are encouraged to attend continuing
professional education programs sponsored by the IRS and professional organizations. Grantees may use grant
funds to attend such programs if the subject matter is necessary for the performance of the grant.

Maintaining Physical Access to Tax Research Materials

IV

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.
Grantees may use grant funds to acquire tax research materials.

V

Attending the Annual LITC Conference

V VI

Applicants notified they have been selected to receive a 2018 grant award must attend the annual LITC
conference in December 2017, held in Washington, D.C. The Clinic Director and the QTE are required to
attend the annual LITC conference in its entirety unless the Director of the LITC Program Office has excused
them from attending all or part of the conference (see below). The QBA is not required to attend the conference,
but may choose to attend upon receiving approval from the Director of the LITC Program Office.

VI VII
VII
VIII
APPENDICES

For all new grantees, the Clinic Director and the QBA must attend a mandatory conference call held
prior to the LITC Conference.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

25

What If I Can’t Attend the LITC Conference?
A request by the Clinic Director or QTE to be excused from attending all or part of the annual LITC conference
must be submitted in writing to the Director of the LITC Program Office no later than two weeks prior to the
first day of the conference. The request should identify the critical reason for the exception request, and the
name, title, and duties of any other person who will attend the annual conference on behalf of the grantee.

How Many Staff Members May Attend the Conference?
If a grantee wishes to send more than two staff members to the conference, it must obtain approval. A grantee
must submit a written request to the Director of the LITC Program Office no later than two weeks in advance of
the conference.

May I Use Grant Funds to Pay for the Cost of Attending?
The cost of attending the LITC Conference (e.g., transportation, hotel) is an allowable expense under the grant
and should be included in an applicant’s budget. Please note that LITC grant funds or matching funds may not
be used to pay the cost of more than two attendees.

C. DEVELOPING A COMMUNITY PLAN
LITCs are responsible for developing an outreach plan to effectively publicize the clinic and its services to
low income taxpayers and ESL taxpayers. LITCs should advertise and promote themselves as providing
representation, education, and advocacy on behalf of low income taxpayers and taxpayers who speak English as
a second language. 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.

D. 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. In
order 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.

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

26

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC

nnRepresentation

about taxpayer rights and responsibilities; and

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

III PROGRAM OVERVIEW
IV. STANDARDS FOR OPERATING
I. LITC
II A LITC
III

nnAdvocacy

in controversy cases;
II

nnEducation

I

Publicity materials and announcements to advertise the services provided by an LITC must focus on core services:

What Are Core LITC Services?
Representing taxpayers in federal tax controversies with IRS examinations, appeals, collection matters, and
litigation are core LITC services. Core services also include representing taxpayers before specialized units of the
IRS that handle matters such as account disputes, identity theft, innocent spouse relief, worker classification, or
individual taxpayer identification number (ITIN) processing.
Education is another core service and includes offering presentations and workshops for ESL taxpayers about their
taxpayer rights and responsibilities. Education services can also include identification of topics for clinic staff to
address during presentations, such as:
nnTax

recordkeeping;

nnHow

to choose a tax return preparer;

nnUnderstanding
nnTax

the Taxpayer Bill of Rights; or

payment options.

nnIf

IV

Publicity materials should state that the LITC can provide consultations or advice to individual taxpayers.
Publicity materials may not advertise tax return preparation services or ITIN preparation assistance because LITCs
are permitted to provide these services only in two limited contexts:
necessary to resolve a controversy; or

to ESL education, as discussed in Section V. D, Preparing Tax Returns and ITIN Applications, of
this publication.

V

nnAncillary

V VI
VI VII

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

VII
VIII
APPENDICES

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
taxpayer’s decision to utilize services from an LITC will not affect the taxpayer’s rights before the IRS.

GLOSSARY
INDEX

nnA

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.

LOW INCOME TAXPAYER CLINIC

27

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 particular LITC. Local
IRS offices can, however, provide taxpayers with information about all the LITCs in that geographic area, and can
provide taxpayers with a copy of Publication 4134, Low Income Taxpayer Clinic List.

E. BUILDING COMMUNITY PARTNERSHIPS
LITCs should develop and maintain relationships with other community-based organizations that assist
low income and ESL individuals. Effective community partnerships help LITCs to enhance visibility in the
community, access taxpayers in insular hard-to-reach communities, better understand non-tax issues that affect
low income individuals and families, and establish a framework for mutual referrals of taxpayers in need of
services. In the application, the applicant must identify organizations within the community with which it can
work to reach its identified audience.

Identify Successful Outreach 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.

F. NETWORKING WITH OTHER CLINICS
LITCs are encouraged to actively participate in maintaining a network with other clinics. Networks provide
an opportunity for clinics to collaborate on tax issues that affect low income and ESL taxpayers, discuss case
strategies, share ideas on education and outreach, and 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.

28

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC

I

G. MENTORING AND TECHNICAL ASSISTANCE

II

Mentors and other sources of technical assistance should be available for clinic staff and volunteers. The LITC
Program Office may ask experienced LITCs to informally assist less experienced clinics with operational inquiries
and technical matters or issues.

III PROGRAM OVERVIEW
IV. STANDARDS FOR OPERATING
I. LITC
II A LITC
III

What Is a Technical Assistance Consultation?
A technical assistance consultation is a discussion with a tax practitioner or other service provider designed to give
brief advice about a tax issue. Grantees must report the number of technical assistance consultations provided on
Form 13424-A, LITC General Information Report.

H. MAINTAINING CLIENT CONFIDENTIALITY
Avoiding Unauthorized Disclosure
Tax professionals have ethical requirements to maintain client confidentiality. See, for example, American Bar
Association Model Rule of Professional Responsibility 1.6 and IRC § 7525.

IV

An LITC’s employees and volunteers generally must not disclose information relating to the representation of a
client unless the client gives informed consent. The confidential nature of each taxpayer’s information must be
respected by an LITC’s employees and volunteers at all times, and each employee and volunteer must safeguard
taxpayer information against inadvertent or unauthorized disclosure. Thus, an LITC must have adequate
safeguards in place to ensure taxpayer information is secure, and only those who have a need to know to assist the
taxpayer are allowed access to the taxpayer’s information.

V

While generally a grantee, its employees, and volunteers are not treated as tax return preparers for purposes
of preparer penalties, the Treasury Regulations under IRC § 7216 define “tax return preparer” more 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 generally
26 CFR § 301.7216-2.

V VI
VI VII
VII
VIII

The regulations authorize disclosure or use without consent only in very limited situations. These situations
include disclosures made pursuant to an order of a court or a federal or state agency, and uses for purposes
of preparation or audit of state or local tax returns. For unauthorized disclosure or use, IRC § 7216 imposes
a sanction of up to one year in prison or a $1,000 fine, or both, 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.

APPENDICES

Client Information Must Be Redacted From Training Materials

GLOSSARY
INDEX

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.

LOW INCOME TAXPAYER CLINIC

29

Sharing Information With the Media
If a media representative approaches clinic staff seeking information about a taxpayer represented by the clinic,
clinic personnel should, as a general rule, decline an interview and refuse to provide details about any particular
taxpayer’s case due to confidentiality requirements and disclosure restrictions. Only those who have a “need to
know” to effect a resolution of the controversy should be allowed access to taxpayer information. News reporters
and other members of the media do not have a “need to know” taxpayer information.
In the unlikely event that a client approaches a member of the clinic staff and asks the clinic to participate in a
news article, the clinic must obtain a written waiver for the disclosure of the client’s taxpayer information and be
confident that the client fully understands the potential ramifications that could result from disclosing taxpayer
information.
The LITC Program has no authority to prohibit a taxpayer from sharing the details of his or her case with the
media. However, clinics should exercise caution when advising clients in regard to the media. 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 the client may face.
Make sure the client fully understands the possible ramifications that could occur from disclosing personal
information to the media. The client may be dealing with other nontax issues (e.g., custody or support battles,
other creditors, immigration) that could be impacted by the media coverage.
If a clinic encourages a client to participate in an interview, the client may believe that he or she is under an
obligation to participate as a condition of receiving clinic services. Clinics should clearly communicate that clients
are under no obligation to share any personal information with the media.

Clinic Staff Must Act in the Best Interests of the Client
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. In order for the clinic to share any details
of a taxpayer’s case with the media, the client must give voluntary, informed consent in writing.

In general, a clinic should not seek permission from a client to publicize any details of a case until after
the controversy case has been resolved and the case is closed.

30

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC

I

I. VOLUNTEERS

II

Create Written Position Descriptions for Volunteers

III PROGRAM OVERVIEW
IV. STANDARDS FOR OPERATING
I. LITC
II A LITC
III

LITCs are encouraged to create written position descriptions for volunteers and use a process to determine
the qualification of volunteers, such as authority to represent taxpayers before the IRS, training, educational
background, language skills, and other qualifications relevant to providing representation, education, and
advocacy on behalf of low income and ESL taxpayers.

Establish and Maintain Pro Bono Panel
In order to provide assistance to more low income and ESL taxpayers, LITCs are encouraged to maintain a pro
bono panel to which they may refer taxpayers for representation and advice. The clinic may establish relationships
directly with qualified representatives who have agreed to provide pro bono representation or advice to low income
and ESL taxpayers or may establish a relationship with a state or local bar association or society of accountants
that maintains a network of professionals willing to provide pro bono representation or advice.

Referrals May Only Be Made to Qualified Representatives
LITCs may refer taxpayers only to individuals authorized to practice before the IRS or the applicable court where
the controversy with the IRS will be adjudicated. A clinic may also refer taxpayers to another LITC in appropriate
circumstances; however, grant funding will not be awarded to an organization that is making referrals in lieu of
providing representation.

IV

Referrals Must Be Monitored

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. Pro bono representatives may not charge any fees for
services (other than reimbursement of expenses such as photocopying and court filing fees).

V VI
VI VII

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 refer the taxpayer to 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.

VII
VIII
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

APPENDICES

For example, suppose an LITC agrees to represent a taxpayer in a controversy with the IRS and refers the case to
a member of the LITC’s pro bono panel. On behalf of the LITC, the pro bono representative resolves the dispute,
bringing the taxpayer into compliance. The taxpayer owns a partnership interest in a family business that is
under audit by the IRS and offers to hire the representative to represent the partnership. Business entities are
not low income taxpayers eligible for representation and the LITC representative must decline to represent the
partnership. The LITC representative cannot refer the taxpayer to someone else who charges a fee to represent the
partnership.

31

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.

J. RECORDKEEPING AND FILE MANAGEMENT
Maintaining Records of Grant Expenditures
LITCs must maintain financial records to ensure adequate control over and accountability for all funds, property,
and other assets related to the grant. LITCs must establish written procedures explaining the process for
approving expenditures from grant funds to ensure compliance with the applicable procurement, payment, and
cost principles in 2 CFR Part 200 and to safeguard assets. The procedures should address which individuals have
approval authority, when written approval is required, and what documentation must be submitted for an expense
to be approved by the approving official. The approval process may differ based on size and type of expense.
Also, LITCs must have written procedures to track their fixed assets and tangible personal property.

Maintaining Sufficient Detail in Client Records
LITCs must maintain client case records to ensure 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 an attorneys’ fee, the clinic has
adequate records to support an award.
The records must identify the date on which the services were performed and must describe the nature of those
services in detail. For each representative for whom fees are claimed, the records must identify the individual’s
name and position, such as supervisory attorney, student, or paralegal, and the associated incremental periods of
time spent by that individual. For each increment of time for which fees are claimed, the records must identify
the date on which the representation was provided and must describe the nature of the representation in detail.
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

32

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

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR OPERATING A LOW INCOME TAXPAYER CLINIC

of taxpayer or third-party records (identifying the records);
with tax return preparer (identifying the preparer);

nnConsultation

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

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

III PROGRAM OVERVIEW
IV. STANDARDS FOR OPERATING
I. LITC
II A LITC
III

nnTelephone

II

nnConsultation

I

nnAnalysis

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.

Use a Professional Case Management System
A case management system can be used to capture intake information, calculate client financial eligibility, track
case status and outcomes, input case notes, maintain timekeeping records, record 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.

Backup Electronic Files Offsite

IV

LITCs should have an offsite back-up file system in place for information stored on its computers. This is
good business practice and enables resumption of business in case of disaster or other work stoppage. An LITC
may spend grant funds to develop a back-up file system. In addition to having offsite back-up, clinics can get
additional suggestions from www.irs.gov/businesses/small-businesses-self-employed/preparing-for-a-disastertaxpayers-and-businesses and www.ready.gov/business.

V

Client Records Must Be Kept in a Secure Location

V VI

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 in the event of a breach.

VI VII
VII
VIII

Retain Records That Document Compliance

APPENDICES

Federal award recipients must maintain financial records and supporting documents to substantiate compliance
with grant requirements. Generally, such records must be maintained for a period of three years from the date of
submission of the Year-End Report. See 2 CFR § 200.333(b).

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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

33

Name Change Requests Must Be Submitted in Writing
Requests to approve name or organizational status changes must be submitted to SAM.gov in advance of the
effective dates of proposed changes with sufficient time to afford program evaluation and legal review.

Ask Clients How You Can Better Assist Them
LITCs should solicit client comments regarding services provided and use such observations to improve clinic
services. Clinics should create a method of soliciting these assessments that is appropriate, depending on the
services provided to the client. Clients should be advised that their participation in surveys is voluntary.

34

LOW INCOME TAXPAYER CLINIC

V. STANDARDS FOR PROVIDING TAXPAYER SERVICES
I

A. REPRESENTATION
I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

nnAccount

II

LITCs represent low income taxpayers in controversies with the IRS. In addition, they may represent low income
taxpayers in controversies with state or local tax authorities when the clinic is representing the taxpayer in a related
federal tax matter. The representation may take place at any stage, including, but not limited to:
adjustments;

nnExam;
nnCollection;
nnAppeals;

or

nnLitigation.

LITCs may also represent taxpayers in other IRS disputes such as trust fund recovery penalty assessments, tax
identity theft, worker classification determinations, or the tax provisions of the Affordable Care Act, to name a
few. LITCs may also represent taxpayers in certain civil actions arising under the Code, for example those arising
under IRC §§ 7431–7435. One exception to the definition of “controversy” involves federal criminal tax matters;
a “controversy” with the IRS does not include a federal criminal tax matter. Although an LITC may not represent
a taxpayer in a federal criminal tax matter, an LITC has discretion to represent a taxpayer in the same or related
state or local tax 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. If the tax controversy is classified as a criminal matter under federal law and state or local law, the
LITC may not provide representation.

Services Provided by a Qualified Representative

VI

Representation services must be provided by an attorney, certified public accountant, enrolled agent, an individual
currently authorized to practice before the IRS pursuant to § 10.7(d) of Circular 230 (e.g., student, law graduate,
tribal court advocate, or other individual for whom the IRS has issued a special appearance authorization),
or individual authorized to appear before the applicable court where the controversy with the IRS will be
adjudicated.

VII
VIII

Use an Engagement Letter When Opening a New Case

APPENDICES

LITC representatives are strongly encouraged to use an engagement letter or retainer agreement to document the
determination to open a case. 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.

GLOSSARY
INDEX

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

LOW INCOME TAXPAYER CLINIC

35

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.

Assisting Taxpayer 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.

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

Low Income Taxpayers and the 90/250 Rule
According to the rule in IRC § 7526(b)(1)(B)(i), 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., 81 Fed. Reg. 8831-32 (Jan. 31, 2017).

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

Use an Intake Form
LITCs must record the taxpayer’s income information on an intake form (or similar form). 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.

36

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

LITC Income Guidelines

II

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.

I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

Grantees must adopt the 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).

Based on the Federal Poverty Guidelines published at 81 Fed. Reg. 8831-32 (January 31, 2017), the current LITC
income guidelines for controversy representation are as follows:

Figure 6, LITC Income Guidelines (250 percent of Federal Poverty Guidelines)
Size of Family Unit

48 Contiguous States,
D.C., and Puerto Rico

Alaska

Hawaii

1

$30,150

$37,650

$34,650

2

$40,600

$50,725

$46,675

3

$51,050

$63,800

$58,700

4

$61,500

$76,875

$70,725

5

$71,950

$89,950

$82,750

6

$82,400

$103,025

$94,775

7

$92,850

$116,100

$106,800

8

$103,300

$129,175

$118,825

$10,450

$13,075

$12,025

For each additional person, add

VI
VII

Income for Purposes of the 90/250 Test

VIII

“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.

APPENDICES

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);

nnChild

GLOSSARY
INDEX

nnAlimony;

support;

nnFederally

funded and other public assistance;

LOW INCOME TAXPAYER CLINIC

37

nnSocial

security;

nnPensions

and retirement income;

nnUnemployment
nnWorkers

benefits;

compensation;

nnRents;
nnRoyalties;
nnScholarships;
nnDividends;
nnInterest;
nnNet

gambling winnings; and

nnSurvivor

benefits or annuity payments.

Income does not include:
nnProceeds

received from the sale of property (including 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).

The definition of income for purposes of the 90/250 rule is not the definition of gross income under
IRC § 61, but rather is more closely aligned with the definition of income used by the United States
Census Bureau.

38

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

Determining Annual Income

II

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.

I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

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.

Apply the 90/250 Rule Only to New Cases Opened
The 90/250 rule 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 when measuring
the 90/250 rule. The case is counted when measuring the 90/250 rules even if the taxpayer discontinues the
relationship before advocacy occurs.
LITCs apply the 90/250 rule 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 rule.

VI

LITCs apply the 90/250 test by comparing the number of cases opened during the reporting period to represent
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.

VII
VIII

Apply the 90/250 Test to the Number of Cases Opened

APPENDICES

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 rule. An LITC satisfies the 90/250 rule if no more
than 10 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.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Example: Satisfying the 90/250 Rule
During the reporting period, 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 rule applies
only to the 120 representation cases and does not apply to the 92 interactions with taxpayers that were

39

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 10 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 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, 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 test.
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 or
not to treat the foster children as part of the family unit or as a separate family unit. However, if the foster
children are treated as part of a single family unit with the husband and wife, any state support payments
received on behalf of the foster children must be included in the taxpayer’s income for purposes of applying
the 90/250 test. If the foster children are treated as a separate family unit, those support payments would be
excluded from the taxpayer’s income computation.

Amount in Controversy Limit
The amount in controversy for any taxable year generally should not exceed the amount specified in IRC § 7463
(currently $50,000). The amount in controversy is determined by the amount of the tax liability for which
the taxpayer is seeking assistance. The taxpayer may be trying to resolve the liability by challenging the IRS’s
determination, or the taxpayer may be trying to resolve the liability by paying a balance due or offering a
collection alternative. Regardless of whether the taxpayer is disputing that he or she owes the amount, or whether

40

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

the taxpayer acknowledges owing the amount and is merely trying to find a way to pay the amount in full or
in part, the amount in controversy should be viewed as the amount that the taxpayer wants resolved. In some
disputes with the IRS, however, the taxpayer may not be disputing the amount owed, but rather is challenging
the IRS’s actions; for example, the taxpayer may be alleging that the IRS’s collection action was unauthorized
(see IRC § 7433). In such a situation, the amount which gave rise to the IRS’s actions which the taxpayer is
challenging is the amount in controversy

II
I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

Is Interest Included in 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, in the notice of deficiency context, if the taxpayer disputes an issue involving tax
or penalties, the corresponding interest is not included in calculating the amount in controversy; the amount
of interest is not being disputed independently, as the amount of interest (if any) will be established once the
controversy is finally resolved by either the IRS or the courts; the interest is a function of the amount of the
liability.
Similarly, in the refund context, the taxpayer is seeking to collect an overpayment, and may be entitled to interest
under IRC § 6611; however, the amount of interest is not being independently disputed because the amount of
interest is tied directly to the amount of the overpayment, and once the IRS or the courts determine the amount
of the overpayment, the amount of interest will flow therefrom. In contrast, if the controversy involves a claim for
refund of interest already paid, the interest is included in the amount in controversy.
In the collection or transferee liability context, the issue being disputed may relate to payment of the balance due,
which includes accrued interest of the taxpayer or transferor. Therefore, interest is included in the amount in
controversy. In addition, if the taxpayer disputes the amount of interest independently from the associated tax
liability (such as a claim for interest abatement or interest suspension under IRC § 6404), then the amount in
controversy includes interest.

VI

The amount reflected in a statutory notice of deficiency (see IRC § 6212) or a notice of determination (see
IRC § 6320 and IRC § 6330) and the amount that the taxpayer places in dispute need not be the same. 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.

VII
VIII

May I Represent a Taxpayer With More Than $50,000 in Controversy?

APPENDICES

A clinic may represent a taxpayer in a case in which the amount in controversy for a given taxable year exceeds
$50,000. However, the 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.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Example 1: Calculation of the Amount in Controversy — Notice of Deficiency
Taxpayer A receives a Notice of Deficiency showing additional tax due of $49,000 and penalties of $3,000 for
a particular tax year. Taxpayer A disputes the entire penalty amount, but only $42,000 of the tax set forth in
the Notice of Deficiency. Thus, the amount in controversy is $45,000 ($42,000 + $3,000).

41

Example 2: Calculation of the Amount in Controversy — Interest
Taxpayer B files a request for interest abatement under IRC § 6404 for $12,000 in interest that had accrued
with respect to tax due in one tax year. The tax liability has already been resolved. Only the interest
is separately in dispute and is therefore included in the amount in controversy. Thus, the amount in
controversy is $12,000.
Example 3: Calculation of the Amount in Controversy — Notice of Determination Under IRC § 6330
Taxpayer C receives a notice of determination concerning a proposed levy action pursuant to IRC § 6330.
The notice of determination reflects a $40,000 liability for Tax Year 1, a $30,000 liability for Tax Year 2,
and a $20,000 liability for Tax Year 3. The liabilities for each tax year include tax, penalties, and interest.
Although Taxpayer C is disputing the entire $90,000 liability ($40,000 + $30,000 + $20,000), the amount
in controversy is determined separately for each tax year. Thus, for Tax Year 1, the amount in controversy is
$40,000; for Tax Year 2, the amount in controversy is $30,000; and for Tax Year 3, the amount in controversy
is $20,000.
Example 4: Calculation of the Amount in Controversy — Balance Due
Taxpayer D receives a bill from the IRS for $55,000 for a single Tax Year. The bill is composed of $40,000
tax, $6,000 penalties, and $9,000 interest. Taxpayer D wants to submit an offer-in-compromise under
IRC § 7122 in the amount of $4,000, which represents D’s reasonable collection potential. The amount of
the offer-in-compromise is not taken into account in determining the amount in controversy. Taxpayer D is
seeking to resolve the balance due, which includes interest. Thus, the amount in controversy is $55,000.
Example 5: Calculation of the Amount in Controversy — Lien Withdrawal
The IRS filed a Notice of Federal Tax Lien under IRC § 6323 when Taxpayer E failed to pay a liability for
Tax Year 1. Taxpayer E wants a clinic to represent him in obtaining a lien withdrawal under § 6323(j). The
withdrawal removes the public Notice of Federal Tax Lien, but Taxpayer E will remain liable for any unpaid
amount, including any additional penalties or interest that accrued since the filing of the Notice. At the
time the LITC agrees to provide the representation, Taxpayer E owes $35,000 for Tax Year 1. Even though
Taxpayer E 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 that the
taxpayer is challenging.
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 IRC § 6611. The IRS disallowed the refund claim. Taxpayer F wants a clinic 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.
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 § 6672 and imposed a
penalty on Taxpayer G 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 1), $18,000
(quarter 2), $10,000 (quarter 3), and $12,000 (quarter 4). The amount in controversy is $55,000 because the
four quarters relate to a single tax year.

42

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

Participation in the United States Tax Court Clinical Program

II

LITCs are strongly encouraged to participate in the United States Tax Court Clinical Program and submission of
an application to participate may be a condition of receiving an LITC grant award. Procedures for requesting to
participate in the United States Tax Court Clinical Program can be found at ustaxcourt.gov/clinics.htm. There
are two different components to the U.S. Tax Court program: the clinic stuffer program and the calendar call
program.

I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

Once the Tax Court approves a clinic to participate in the clinical program, the clinic may submit a “stuffer
notice” to the Court requesting that the clinic’s contact information be included in Tax Court mailings to local
petitioners who indicated they did not have representation. The court provides a sample notice with suggested
language and format. If there is more than one clinical program covering a U.S. Tax Court city, the clinics must
submit a joint stuffer.
Participating clinics may also attend Tax Court calendar call sessions, which are generally held one to two times
per year, although they can occur more frequently, depending on local need. If an LITC participates in or
coordinates a calendar call program, there are additional requirements for participation.
Participation in the United States Tax Court Clinical Program generates case work and collaboration with the Tax
Court accomplishes outreach through Court mailings to petitioners. If a clinic identifies a petitioner eligible for
LITC representation, the clinic can choose whether to provide informal assistance or agree to take on the case and
provide continued assistance to the petitioner in an effort to resolve his or her federal tax controversy.

What Is the 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 of the petitioners scheduled for that day, as well as to the Commissioner of Internal Revenue
(respondent), approximately five months in advance of the intended trial 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.”

VI
VII

Representation by Students and Law Graduates
VIII

Students and law graduates working at an LITC may be authorized to represent taxpayers before the IRS. The
LITC must obtain a special appearance authorization for those students and law graduates from the LITC
Program Office. Information about how to request a special appearance authorization can be found on the LITC
Toolkit. The special appearance authorization is limited to practice before the IRS. 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.

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

43

Obtaining a Special Appearance Authorization
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. A student is an individual enrolled in an accredited law,
business, or accounting program. A law graduate is an individual who has graduated from law school but it
has been one (1) year or less since graduation and such individual 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 has taken a bar examination during that one year period and been unsuccessful, or who has
applied for admission to a bar during that one year period but has been denied admission for any reason, is not
eligible for special appearance authorization.

Submitting Form 2848 With Student/Law Graduate Representatives
In order 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 which lists the student or law graduate and the
supervisory representative. The special appearance authorization letter issued by the LITC Program Office
must accompany any Form 2848 submitted to the IRS listing a student or law graduate as a representative.

Authorization Automatically Expires
The appointment of a student as a taxpayer’s representative lasts for 130 days from the day the taxpayer
signs Form 2848, Power of Attorney and Declaration of Representative, and expires thereafter. The supervisory
representative listed on Form 2848 is not subject to any limitations of authority by virtue of the special
appearance authorization letter and thus retains authority as the taxpayer’s representative until the Form 2848
is withdrawn or revoked.
Clinics should not submit a notice withdrawing 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 as a representative may result in the IRS removing all representatives listed on the relevant Form
2848, including the supervisory representative.

Substitution of Representatives
If a taxpayer checks the box on line 5 of Form 2848 delegating authority to the representative to substitute
or add representatives, 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. Each time a student or law graduate representative is substituted for an existing representative,
the clinic should send in 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.

44

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

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 212-298-2079. For more detailed
instructions, please refer to the LITC Toolkit website.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

If a grantee encounters difficulty with getting Forms 2848 processed or with getting IRS personnel to recognize
students or law graduates operating under a special appearance authorization, please contact Susan Kideckel in the
LITC Program Office at (212) 298-2295 (not a toll-free call), or the grantee’s assigned advocacy analyst.

American Bar Association Model Rule 1.7 provides that a lawyer should not represent a client if the
representation involves a concurrent conflict of interest. Students and law graduates authorized to
practice before the IRS are treated as lawyers for purposes of analyzing ethics issues. Thus, students
and law graduates participating in an LITC 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 having the student or law graduate continue 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.

B. EDUCATION

VII

nnHelping

VI

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 conducted 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:
taxpayers to understand their taxpayer rights and obligations;
the clinic and its services; and

nnGenerating

controversy representation cases.

VIII

nnPublicizing

nnTax

APPENDICES

Educational activities should address tax issues of particular significance to low income and ESL taxpayers in the
local community, including:
recordkeeping;

nnFiling

requirements and due dates;
GLOSSARY
INDEX

nnThe Taxpayer

Bill of Rights;

LOW INCOME TAXPAYER CLINIC

45

nnEligibility
nnTax

for various deductions and credits;

provisions of the Affordable Care Act;

nnWorker

classification;

nnIdentity

theft;

nnInnocent
nnThe

spouse relief;

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;

nnConducting

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

nnHolding

a training for the staff of an immigrant rights organization about how to apply for and use an
Individual Taxpayer Identification Number (ITIN); or

nnLeading

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

LITCs are responsible for creating, printing, and distributing the materials used to educate taxpayers. Materials
should be prepared in languages appropriate for ESL taxpayers. The QTE is responsible for reviewing all
educational materials for accuracy before distribution.
Offering tax education to low income and ESL taxpayers is a primary function of LITCs. Clinics may also offer
education to staff and volunteers as a form of training and as a tool to recruit local qualified representatives as
members of the clinic’s pro bono panel. Clinics may be able to award Continuing Professional Education (CPE)
or Continuing Legal Education (CLE) credits for educational activities about sophisticated tax issues impacting
low income taxpayers. For additional information about education as training, see section IV.B, Infrastructure
and Resources. To report this type of activity, use Form 13424-A, Low Income Taxpayer Clinic General Information
Report, lines 16-17 (see Appendix C, pages 127–131).

46

LOW INCOME TAXPAYER CLINIC

STANDARDS FOR PROVIDING TAXPAYER SERVICES

I

C. ADVOCACY

in advocacy projects with professional organizations;

nnCommenting
nnPreparing

I. LITC
III PROGRAM
IV
OVERVIEW
V. STANDARDS FOR PROVIDING
II
TAXPAYER
III
SERVICES
IV
V

nnParticipating

II

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:

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. For additional information, see section VI.C, Lobbying Restrictions.

D. PREPARING TAX RETURNS AND ITIN APPLICATIONS

VI

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 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/taclocations-where-in-person-document-verification-is-provided. Grant funds awarded to an LITC must be used for
the LITC activities authorized in the grant agreement and cannot be used to fund VITA or TCE activities or staff.

VII

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 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 ).

VIII
APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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 IV.D, Publicizing LITC Services for
more information.

47

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 taxable 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 taxable years.
Example 2: Impermissible Tax Return Preparation — No Tax Controversy
Assume that 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.
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 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 a number of 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.
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’s preparation of tax returns under these circumstances is not permitted because attendees have not indicated
that there is a controversy for which the returns are required to resolve.

48

LOW INCOME TAXPAYER CLINIC

VI. COMPLIANCE REQUIREMENTS
I

A. UNIFORM ADMINISTRATIVE REQUIREMENTS
II

Grant award administrative requirements are set forth in the Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200. The 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).

I. LITC
III PROGRAM
IV
OVERVIEW
V

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 made by the IRS to clinics.

VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

B. CIVIL RIGHTS PROTECTION RESPONSIBILITIES
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.
All applicants for Federal funding must provide information necessary to comply with:
nnTitle

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;

nnSection

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

nnTitle

VI

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

VII

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

nnExecutive

VIII

Order 13166, Improving Access to Services for Persons with Limited English Proficiency,
which sets forth the compliance standards that recipients of Federal financial assistance must follow to
ensure that their programs and activities normally provided in English are accessible to those with limited
English proficiency, including through oral and written translation when necessary.

APPENDICES

All Low Income Taxpayer Clinics are required to display Publication 4053, Civil Rights Poster.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

49

Protection Against Reprisal
No recipient or other person may intimidate, threaten, coerce, or discriminate against any individual for the
purpose of interfering with any right or privilege protected by the laws identified in this section, or 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.

Civil rights reporting information is mandatory and required of every applicant or current grantee
submitting a request for continued funding annually. Applicants provide civil rights information on Form
13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative; multi-year grantees provide civil
rights information in the Project Abstract of their continuation request.
When responding to the five Civil Rights questions on Form 13424-M or in the Project Abstract, a
response of “Not Applicable” or “N/A” is not appropriate. Responses must include a “Yes” or “No,”
along with an explanation, if necessary.

C. 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.
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;

50

LOW INCOME TAXPAYER CLINIC

COMPLIANCE REQUIREMENTS

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;

II

nnDraft

I

nnDevelop

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

I. LITC
III PROGRAM
IV
OVERVIEW
V

nnPay,

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.

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.

VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

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;

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

VI

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 or any federal or state legislation);
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

VII

nnContact

VIII

nnDiscuss

APPENDICES

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.

Disclosure Requirements

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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.

51

Figure 7 details the main sources of authority that regulate lobbying by LITCs.

Figure 7, Sources of Guidance on Lobbying Activities

Source of Restriction

2 CFR Part 200

Byrd Amendment 31 USC § 1352

Publicity and
Propaganda/
Appropriations
Laws Restrictions

Federal grant
funds and
matching funds

Restriction applies to Federal grant funds and
matching 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.

Federal grant
funds and
matching funds

All subject
matters

Limited to lobbying regarding the making or
awarding of a grant; it does not appear to apply
to lobbying on general program legislation (i.e.,
to expand the subject matter of the program, as
opposed to the amount of money awarded for
program purposes which may increase the award
to the grantee).

All subject
matters

Stage of legislation
covered by restriction

All stages,
including before
introduction

All stages, including before introduction.

Legislation
pending before
Congress

Applies to Grassroots
Lobbying?

Yes, it is
prohibited.

No, it is not prohibited, so long as no federal
funds are used for the grassroots lobbying effort.

Yes, it is
prohibited.

Applies to advocating
at the state level?

Yes, prohibition
applies to state
level activities.

No, prohibition does not apply to state level
activities.

No, prohibition
does not apply
to state level
activities.

Exception for when
information is
specifically requested
by member of
Congress?

Yes, there is
an exception
which permits
a response to
a documented
request.

Yes, there is an exception which permits a
response to a documented request.

Not applicable

Type of Funds
Affected by
Restriction

Lobbying topics
covered by
Restriction

Figure 7 describes restrictions on the use of federal grant funds and matching grant funds for
lobbying. In addition, IRC § 501(c)(3) organizations are subject to lobbying limits (using different
lobbying definitions) under the Internal Revenue Code. In general, an IRC § 501(c)(3) organization may
conduct an insubstantial amount of lobbying and still maintain its tax-exempt status. For additional
information, see Publication 4221-PC, Compliance Guide for 501(c)(3) Public Charities, available at
www.irs.gov/pub/irs-pdf/p4221pc.pdf.

Example: Lobbying Restrictions
A grantee may send an email to the American Bar Association sponsored LITC listserv to gather support or
opposition for legislation. Although such an email is an attempt to influence legislation, so long as neither
federal grant funds nor matching funds are used, the grantee has not violated Title 31 or Title 18. If the

52

LOW INCOME TAXPAYER CLINIC

COMPLIANCE REQUIREMENTS

I

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.

II

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 in connection with the sending of a single email. Keep in mind that if a grantee
anticipates devoting, or having volunteers devote, a large amount of time to the endeavor (e.g., researching
the issue, drafting proposed legislation, responding to comments on the listserv about the proposal), the
activity could rise to the level of being more than insubstantial, in which case the grantee may choose to make
a lobbying election under IRC § 501(h). IRC § 501(h) measures the permitted/prohibited level of lobbying
solely by expenses.

I. LITC
III PROGRAM
IV
OVERVIEW
V

For more information about making a lobbying election, refer to:
nnIRC

§ 501(h) and IRC § 4911;
Reg. §§ 1.501(h)-1 through 1.501(h)-3;

nnTreas.

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

nnPublication

VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

nnTreas.

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.

The LITC Program recognizes that this list of prohibited and permitted activities will not answer every situation
that arises. Accordingly, if a grantee has any question as to whether an anticipated activity could be implicated
under these rules, it should contact the LITC Program Office prior to engaging in such activity.

VI
VII

D. SPENDING LITC GRANT FUNDS AND MATCHING FUNDS

VIII

Cost Principles of 2 CFR Part 200

APPENDICES

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;

nnConform

with any limitations or exclusions set forth in the cost principles or in the Notice of Award;
GLOSSARY
INDEX

nnBe

consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the grantee;

nnBe

accorded consistent treatment by the grantee;

LOW INCOME TAXPAYER CLINIC

53

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;

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; and

nnBe

adequately documented.

Grantees should refer to 2 CFR Part 200 for detailed rules regarding allowable and unallowable expenses or
contact the grantee’s assigned advocacy analyst with questions. Generally, the same rules apply to expenditures
made using federal grant funds or 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.
Figure 8 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.

Figure 8, Allowable and Unallowable Expenses
Allowable Expenses

54

Unallowable Expenses

Salaries, wages, and fringe benefits for services
rendered by LITC employees

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

Reasonable office supplies and equipment costs
necessary to provide LITC services

Expenses incurred that do not support or benefit the LITC
program or which are unnecessary in carrying out LITC
activities

Rent, utilities, and custodial services for LITC office
space

Certain advertising and public relations costs as
described in 2 CFR § 200.421

Non-alcoholic refreshments for educational activities or
community outreach events

Alcoholic beverages

Refreshments to volunteers, provided the costs are
reasonable

Refreshments for employees, unless their workload
requires those employees to work outside the normal
hours of clinic operation

Continuing education courses for employees, if such
courses will increase their vocational effectiveness

Professional licensing fees for employees (e.g., bar
association fees for the QTE)

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

Pens, t-shirts, mugs, or other memorabilia to promote
its services to taxpayers or for the personal use of
employees

Printing, postage, insurance costs incurred for LITC
activities

Lobbyist registration fees

A reasonably proportionate share of the cost of audit
services

Costs of goods or services for personal use (as opposed
to business use) of LITC staff

Publicity and training costs directly associated with the
LITC program

Costs incurred outside the performance period of the
award, unless specifically excepted by the LITC Program
Office

Installation of telephone lines, including a toll-free line,
necessary to provide LITC services to taxpayers

Application fee to become an Attorney, CPA, or enrolled
agent

LOW INCOME TAXPAYER CLINIC

COMPLIANCE REQUIREMENTS

I

Allowable Expenses

Unallowable Expenses

Costs incurred for two individuals to attend the Annual
LITC Grantee Conference

Fundraising costs

Interpreter services for hearing-impaired or non-English
speaking taxpayers

Entertainment costs

Legal research and reference materials including the IRC
and Treasury Regulations

Fines and penalties

Indirect costs as a use of federal funds

Indirect costs as a use of matching funds

I. LITC
III PROGRAM
IV
OVERVIEW
V

License renewal fees for attorneys, CPAs, or enrolled
agents

II

Travel performed by program staff to conduct LITC
business

Indirect Expenses

i.

Indirect Cost Rate Agreement
nnMust

be approved in advance;

nnAgreement
nnThe

ii.

VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

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:

must set forth cost items included in the rate; and

clinic may not charge items included in the rate as separate expense items.

De Minimis 10 percent rate
nnRules

are set forth in 2 CFR Part 200;

nnClinics

that elect to use the de minimis rate are prohibited from charging administrative or facility costs
as separate expense items.

VI

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 10 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.

VII
VIII
APPENDICES

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.
For additional information, see Section III.B, Completion and Submission of the LITC Grant Application
Package, and III.C. Completion and Submission of a Non-Compete Continuation (NCC) request.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

55

E. MEETING THE MATCHING FUNDS REQUIREMENT
Grantees must provide matching funds on a dollar-for-dollar basis for all federal grant funds received. In general,
2 CFR Part 200 provides that all contributions, including cash and third-party in-kind, can be accepted as
matching funds when such contributions are:
nnVerifiable
nnNot

from the grantee’s records;

used as a match or contribution for any other federal award;

nnNecessary

and reasonable for accomplishment of LITC program objectives;

nnAllowable

under the applicable cost principles;

nnNot

paid by the federal government under another award, except when authorized by federal statute;

nnProvided
nnIn

for in the grantee’s approved budget; and

conformity with other applicable provisions of 2 CFR Part 200.

Valuation of Matching Funds
Contributions of goods and services provided by a grantee must be valued in accordance with applicable cost
principles. These principles generally limit values to:
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; or

nnFair

market value.

Third-party in-kind contributions, which represent the value of non-cash contributions provided by parties
other than the recipient or the federal government 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). Third-party in-kind contributions include the value of goods, space, or
volunteer services donated to the LITC.

If an individual on the LITC staff receives an award or fellowship from a nonfederal source (e.g., the
American Bar Association Section of Taxation Public Service Fellowship), the amount of the award may
be included as matching funds to the extent the award proceeds are used to support LITC activities.

How Should I Value Volunteer Services?
The rates for volunteer in-kind services, other than certain volunteer services provided by a qualified representative
as explained in the next section, must be determined consistent with the principles stated in 2 CFR § 200.306. In
general, the rates used to value volunteer in-kind services must be consistent with those paid for similar work in
the applicant’s organization and may include a reasonable amount for fringe benefits.

56

LOW INCOME TAXPAYER CLINIC

COMPLIANCE REQUIREMENTS

I

When the applicant does not have staff performing similar work, the rates used must be consistent with those
paid for similar work in the labor market in which the applicant competes for the kind of services involved. One
source of wage rates by geographic area can be found on the Bureau of Labor Statistics (BLS) at www.bls.gov/
bls/blswage.htm. However, note that the BLS data represents a wage rate only and can be adjusted upward by a
reasonable fringe benefits amount in determining a volunteer in-kind valuation rate.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V

If a third-party employer provides one of its employees to work for the applicant at no cost, those services are
valued at the employee’s regular rate of pay, plus reasonable fringe benefits, provided the services are in the same
skill set for which the employee is normally paid.
An employee of the grantee may not be treated as a volunteer for purposes of valuing in-kind services. For
example, if an employee works at the LITC five days a week, the grantee may not deem the services provided
three days per week to be paid services and the services provided two days a week to be volunteer services. If an
employee is paid for services, the total value of all services he or she provides to the LITC is the amount paid.

Volunteer Services of a Qualified Representative
VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

In accordance with 2 CFR § 1000.306, grantees may use the rate found in IRC § 7430 to value certain services
donated by qualified representatives. 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 § 7430 are satisfied. The rate at which to value those services is adjusted periodically for inflation. For 2017,
the maximum rate is $200 per hour, as prescribed in Revenue Procedure 2016-55, 2016-45 I.R.B. 707, unless the
representative can establish that a special factor, as described in IRC § 7430(c)(1)(B)(iii), applies.
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;

nnServices

representative is not a student; and

nnQualified

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

VII

nnQualified

VI

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;

VIII

Unless all of the above criteria are met, grantees should apply the standard cost principles from 2 CFR § 200.306
as described above in section VI.E, Meeting the Matching Funds Requirement.

APPENDICES

Grantees should keep careful records of the services provided by volunteers. Detailed records are required under
LITC standards of operation, and are necessary to pursue a claim for attorneys’ fees under IRC § 7430. See
section IV.J, Recordkeeping and File Management for additional details about recordkeeping.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

57

Valuation Is Also Dependent on the Type of the 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. For example, if a volunteer is an attorney
providing advice to taxpayers at an educational event or during an intake consultation and the interaction does
not result in representation to the taxpayer, then the work performed by the volunteer must be valued using the
standard OMB cost principles in 2 CFR § 200.306 rather than the IRC § 7430 rate. Even though the volunteer
is an attorney and meets the definition of qualified representative, the volunteer was not acting in a representative
capacity.

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.

Documenting the Sources of Matching Funds
Grantees must maintain adequate records to substantiate the source of all matching funds. For example, if the
clinic is counting services provided by a volunteer as matching funds, the clinic must track the amount of time the
volunteer spends working on LITC activities (e.g., a clinic can use sign-in sheets, timesheets, or a similar method
to track the time).
Grants may be awarded based on good faith estimates of matching funds, including verifiable pledge
commitments or other likely sources of funding. However 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 received in
excess of the documented match.
Qualified matching funds can be derived from multiple sources and in a various forms, such as cash, services
provided by volunteers, and income from program activities. Figure 9 shows examples of qualified and ineligible
sources of matching funds.

58

LOW INCOME TAXPAYER CLINIC

COMPLIANCE REQUIREMENTS

I

Figure 9, Qualified and Ineligible Matching Funds

II

Qualified Matching Funds include (but are not limited to):
Legal Services Corporation funds

I. LITC
III PROGRAM
IV
OVERVIEW
V

Salaries, including fringe benefits, of clinic staff

Cash

Equipment and supplies used in the clinic
Other costs necessary to the operation of the program
The value of volunteer services furnished by professional and technical
personnel, consultants, and other skilled and unskilled labor

Third-party in-kind contributions

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

Program Income from activities directly
related to the LITC’s objectives

Nominal fees charged
Awards of attorney’s fees

Construction

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

Third-party in-kind contributions

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

VI. COMPLIANCE
II
III
REQUIREMENTS
IV
V

Ineligible Matching Funds include (but are not limited to):

Federal work-study funds
Other Federal Funds

Expenses that do not support or benefit
LITC activities

Funds from other federal grants unless specifically authorized by statute
(See 2 CFR § 200.306(a))
Indirect costs, including general overhead of the institution sponsoring the
LITC

Disallowed Costs
VI
VII

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 disallow matching funds or improper grant fund expenditures supporting the activity
or action that is not in compliance and seek recovery of improperly spent funds.

VIII
APPENDICES

OMB Audit Requirement

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

A grantee that expends $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.

59

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 2 CFR Part 200. 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. A reasonably proportionate share of the
costs of an audit performed in compliance with 2 CFR Part 200 is an allowable LITC grant expense.
If an audit is required pursuant to 2 CFR Part 200 must be organization-wide. The auditor must determine
whether the grant recipient:
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 in compliance with
applicable laws and regulations — particularly the laws and regulations that could materially impact the
financial statements; and

nnComplied

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

Financial records, supporting documents, statistical records, and all other records pertinent to an award 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 should visit the HHS Division of Payment Management Services
(PMS) website at www.dpm.psc.gov/grant_recipient/audit_confirmation_procedures.aspx.

60

LOW INCOME TAXPAYER CLINIC

VII. POST-AWARD REQUIREMENTS OF GRANTEES
I

General Compliance

U.S.C. § 7526;

nnThe

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

nn26

II

By accepting funds under this grant, the grantee agrees to comply with all terms and conditions for the grant,
which are governed by:

terms and conditions contained in this Publication;

nnAssurances

and Certifications contained in Standard Form 424;

nnAny

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

nnOther

guidance issued by the Office of Management and Budget after the application or NCC has been
received by the LITC Program Office; and

nnAny

additional specific conditions listed in the notice of award.

VII. POST-AWARD
II
IIIREQUIREMENTS
IV
V OF GRANTEES
VI
VII

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,
proper expenditure and accounting for Federal and matching funds, and complete, timely, and accurate reporting
of grant activities and finances.
If a grantee fails to comply with the terms of the award, the LITC Program Office may impose additional
conditions on the award. If the noncompliance cannot be remedied by imposing additional conditions, the
Program Office may take one or more of the following actions:
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;

nnSuspend

or terminate the award in whole or in part, as explained in Section VIII.F, Suspension or
Termination of a Grant;

nnInitiate

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

nnWithhold

other remedies that may be legally available.

VIII

nnTake

further awards for the program; or

APPENDICES

Before the IRS terminates an LITC grant award, the IRS will provide the grantee with notice and a reasonable
amount of time to correct the noncompliance.

Complete the Application Amendment Package

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

All grantees must complete an application amendment package through www.grantsolutions.gov after receiving
a final Notice of Award letters. The LITC Program Office will determine final award amounts after Congress
appropriates funding for fiscal year 2018. If the grant amount awarded is less than the amount of grant funds

61

requested, the grantee must submit a revised budget through www.grantsolutions.gov. If the difference in funding
amount affects the clinic’s proposed activities, a revised program performance plan also must be submitted.

All grantees must complete an initial application amendment package through www.grantsolutions.gov,
even if the conditions do not arise that require an amendment to the budget or program performance
plan.

A. EVENTS REQUIRING NOTIFICATION TO THE LITC PROGRAM OFFICE
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
LITCProgramOffice@irs.gov. 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
grantsolutions.gov and schedule a due date for resubmission of the package.

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 include a statement of the action taken or contemplated, and any assistance needed to
resolve the situation. Failure to notify the LITC Program Office may result in restriction of funds, suspension, or
termination of the grant. For additional information, see Section VIII.F, Suspension or Termination of a Grant.

Changes in Clinic Contact Information
Grantees are required to immediately notify the LITC Program Office about proposed changes in the following:
nnKey

personnel, including the Clinic Director, QTE, or QBA, as well as any changes in their contact
information (telephone number and email address);

nnThe

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 on each clinic.

62

LOW INCOME TAXPAYER CLINIC

POST-AWARD REQUIREMENTS OF GRANTEES

I

Changes in Program Plan or Budget

scope or objective of the program;

nnKey

personnel or time devoted to the LITC by key personnel;

nnBudgeted
nnThe

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

nnThe

II

Grantees are expected to spend grant funds and matching funds in accordance with the program plan and budget
submitted with its 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:

cost categories exceeding 10 percent of the federal grant award; and

amount or composition of matching funds (cash or third-party in-kind match).

What If I Do Not Use All of My LITC Grant Funds?

nnThe

amount of grant funds being returned;

nnThe

reason for the return of funds; and

VII. POST-AWARD
II
IIIREQUIREMENTS
IV
V OF GRANTEES
VI
VII

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 not spend its entire award, the grantee should
immediately notify the LITC Program Office. The notification should contain the following information:

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).

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 reobligate the funds to another clinic
on or before September 30, the end of the federal government’s fiscal year.

Withdrawal From the LITC Program

VIII

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.

APPENDICES

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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. A grantee
that withdraws from the program must comply with its ongoing professional responsibilities discussed in
Section V. A, Representation.

63

B. MANAGING GRANT FUNDS
How Do I Access My Grant Funds?
Grant funds are paid through the Payment Management System (PMS) maintained by the Department of Health
and Human Services Division of Payment Management (DPM). 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.

What Expenses Are Eligible for Reimbursement?
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.

How Do I Access 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 VI.E, Meeting the Matching Funds Requirement.
The DPM has an online tutorial for those who are not familiar with the system. Grantees are encouraged to
visit the DPM website (www.dpm.psc.gov) to view the tutorial and training. Grantees that experience problems
accessing funds should contact the help desk at 877-614-5533 or send an email to PMSSupport@psc.gov.

Amounts Available for Disbursement
Grantees are encouraged to draw down all obligated funds as soon as possible. Questions regarding upcoming
disbursements should be directed to the grantee’s assigned advocacy analyst.

Grant Funds Must Be Held in FDIC 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.

64

LOW INCOME TAXPAYER CLINIC

POST-AWARD REQUIREMENTS OF GRANTEES

I

Interest Earned on Grant Funds

II

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
expense. Interest remittances should be made to the Department of Health and Human Services, Payment
Management System through an electronic medium using either Automated Clearing House (ACH) network or a
Fedwire Funds Service payment. See 2 CFR § 200.305.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

C. REPORTING RESPONSIBILITIES
How Do I Submit Reports and Other Documents?

VII. POST-AWARD
II
IIIREQUIREMENTS
IV
V OF GRANTEES
VI
VII

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 Payment Management System). This includes accepting the notice of award, submitting an
application amendment, providing a revised budget, reporting changes in the program plan or key clinic staff,
filing Interim and Year-End reports, and submitting non-compete continuation (NCC) requests for funding. The
LITC Program Office provides annual training to grantees on using Grant Solutions.

Why Am I Required 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 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. Thus, it is important that grantees provide
accurate and complete reports.

What If I Am Unable to Submit My Report by the Due Date?

VIII

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 LITCProgramOffice@irs.gov to submit an extension request.

APPENDICES

Failure to timely submit required reports to the LITC Program Office may result in any or all of the following:
access to grant funds;

nnReduction

of any future award amount; or

nnSuspension

GLOSSARY
INDEX

nnRestricted

or termination of the grant.

LOW INCOME TAXPAYER CLINIC

65

Submitting The Interim Report
An Interim report must be submitted online through www.grantsolutions.gov by July 30, 2018. The Interim
report covers the first half of the grant year (January 1, 2018 through June 30, 2018) and consists of the following
items, prepared in accordance with the relevant instructions.
nnStandard

Form 425, Federal Financial Report;

nnForm

13424-L, Statement of Grant Expenditures;

nnForm

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

nnForm

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

nnForm

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

nnForm

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

nnForm

13424-C, Advocacy Information Report.

For reference purposes, copies of all required reporting forms and instructions are included in Appendix C,
page 112. However, grantees must complete and submit reporting forms in Grant Solutions.

Submitting The Year-End Report
A Year-End report must be submitted online through www.grantsolutions.gov by April 1, 2019. The YearEnd report covers the entire grant year (January 1, 2018 through December 31, 2018). When preparing the
program narrative, information may be incorporated by reference from the Interim Report program narrative, as
appropriate. A complete Year-End report consists of the following items, prepared in accordance with the relevant
instructions.
nnStandard

66

Form 425, Federal Financial Report;

nnForm

13424-L, Statement of Grant Expenditures;

nnForm

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

nnForm

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

nnForm

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

nnForm

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

nnForm

13424-C, Advocacy Information Report.

LOW INCOME TAXPAYER CLINIC

POST-AWARD REQUIREMENTS OF GRANTEES

I

For reference purposes, copies of all required reporting forms and instructions are included in
Appendix C. However, grantees must complete and submit reporting forms in Grant Solutions.
II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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.

VII. POST-AWARD
II
IIIREQUIREMENTS
IV
V OF GRANTEES
VI
VII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

67

VIII. LITC PROGRAM OFFICE RESPONSIBILITIES
The LITC Program Office is responsible for managing and administering the LITC grant program in a manner so
as to ensure that Federal funding is expended and funded programs are implemented in full accordance with U.S.
statutory and public policy requirements. 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 the Taxpayer Advocate Service (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 that report to the Director and the Deputy Director of the LITC Program including
managers, program analysts, and an attorney-advisor;

nnGrant

administration and operations staff including operations and support staff responsible for processing
grant applications, awards, reports, and payments; and

nnAdvocacy

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

Figure 10, LITC Program Office Staffing Chart
LITC Program Office Staffing Chart
Director

Deputy Director

Senior Analyst

Clinical Advocacy Manager

Analyst

68

Analyst

Analyst

LOW INCOME TAXPAYER CLINIC

Analyst

Analyst

Analyst

Secretary

Analyst

Analyst

Analyst

Secretary

Grant Operations Manager

Analyst

Analyst

Analyst

Analyst

Analyst

Analyst

LITC PROGRAM OFFICE RESPONSIBILITIES

I

B. ADMINISTRATION
The LITC Program Office administers the grant by:
LITC grant applications and making awards to successful applicants;

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

nnRevising

II

nnProcessing

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;

nnPublishing

annually Publication 5066, LITC Program Report, which reports the activities of the LITCs to
internal and external stakeholders; and

nnReviewing

and analyzing data from reports submitted by grantees to identify trends and recognize best
VII

practices.

VIII.
II
LITCIIIPROGRAM
IV OFFICE
V RESPONSIBILITIES
VI
VII
VIII

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

technical assistance and guidance to grantees and potential applicants;

nnInforming

the public about the availability of LITCs, as appropriate and to the extent permitted by law,
including references on the IRS website at www.irs.gov;

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;

nnIssuing

special appearance authorizations to LITCs that permit students and law graduates working under
the supervision of a practitioner to represent taxpayers before the IRS; and

nnCoordinating

access for LITCs to e-services products offered by the IRS.
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

69

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

Interim and Year-End reports to assess progress in meeting program goals, identify emerging
issues, and collect, review, and validate 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. SIGHT ASSISTANCE VISITS
The LITC Program Office or the Local Taxpayer Advocate Office conducts a site assistance visit to each grantee
every year. There are three types of site assistance visits:
nnOrientation

visit;

nnOperational

review visit; and

nnLocal Taxpayer

Advocate (LTA) visit.

What Is the Purpose of an Orientation Visit?
The LITC Program Office conducts an orientation visit to each grantee that did not receive a grant in the
previous 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 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.

What Is the Purpose of an Operational Review Visit?
The LITC Program Office conducts operational review visits periodically with each grantee. 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. 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 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.

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LITC PROGRAM OFFICE RESPONSIBILITIES

I

What Is the Purpose on an LTA Visit?

II

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, the LTA must
conduct an LTA visit. The purpose of the LTA visit is to foster the relationship between the LTA Office and the
clinic.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

F. SUSPENSION OR TERMINATION OF A GRANT
The IRS may suspend or terminate a grant in whole or in part if the grantee fails to comply with the terms and
conditions of the award. A grant award may also be terminated with the consent of the grantee, in which case the
two parties must agree upon the termination conditions, including the effective date and, in the case of partial
termination, the portion to be terminated. Notwithstanding that a multi-year grant has been awarded under
IRC § 7526(c)(3), the IRS may terminate a grant during the multi-year period.

VII

Actions that may lead to suspension or termination include:
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;

VIII.
II
LITCIIIPROGRAM
IV OFFICE
V RESPONSIBILITIES
VI
VII
VIII

nnFailure

nnA

violation by the recipient of a material provision of IRC § 7526 or other applicable law or regulation
(including 2 CFR Part 200);

nnA

violation by the recipient of a material provision of Publication 3319, (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

APPENDICES

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

nnWholly

or partly suspend or terminate the grant;

nnInitiate

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

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

all or part of certain cost items, including grant expenditures and matching funds, that support the
activity or action not in compliance;

71

nnWithhold
nnTake

future award amount; or

other remedies that may be legally available.

How Will I Be Notified If My Grant Is Suspended or Terminated?
Suspension or termination of a grant award will be handled in accordance with 2 CFR Part 200. The LITC
Program Office will notify the grantee in writing of any suspension or termination action, setting forth the
reasons for such action and the effective date. The notification will advise the grantee of its right to object to the
suspension or termination action by providing information and documentation in writing to challenge the basis
for the action.

What If I Want to Challenge a Suspension or Termination?
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.
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.
Employees and volunteers of the clinic who are lawyers must adhere to their responsibilities as attorneys, not just
the responsibilities within the parameters of the LITC Program. The American Bar Association (ABA) has model
rules of professional conduct that are applicable when a lawyer is terminating representation. In this regard,
ABA Model Rule 1.16 provides that upon terminating representation of a client, a lawyer must take reasonable
steps to protect a client’s interests, which includes giving notice to the client, allowing the client time to find
other representation, and returning papers 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.
In addition, if the clinic will no longer participate in the United States Tax Court Clinical Program, the clinic
must notify the Tax Court so that the Tax Court will cease referring taxpayers to that clinic. Once an organization
is no longer a grantee, the clinic should not use “LITC” as part of its name. Circular 230 prohibits practitioners
from providing misleading or deceptive statements or claims. See 31 CFR § 10.30(a)(1). If the organization will

72

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OFFICE RESPONSIBILITIES

I

continue to exist but will not be receiving grant funds, it may be misleading for the organization to call itself an
LITC. In appropriate circumstances, the LITC Program Office may need to refer the matter to the Office of
Professional Responsibility.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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

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

nnLiquidation

by the grantee of all obligations incurred under the award;

nnDraw

down by the grantee of payment for all allowable reimbursable costs;
by the grantee of any balances of unobligated cash drawn down by the grantee;

VII

nnRepayment
nnSettlement

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

VIII.
II
LITCIIIPROGRAM
IV OFFICE
V RESPONSIBILITIES
VI
VII
VIII

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

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

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74

LOW INCOME TAXPAYER CLINIC

APPENDIX A
I
II

INFORMATION FORMS FOR LITC GRANT
APPLICATIONS AND CONTINUATION REQUESTS

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

LOW INCOME TAXPAYER CLINIC

75

GENERAL INFORMATION FORMS
All organizations requesting LITC funding and continuations of multi-year awards must submit the following two
general information forms each year funding is requested:
qqIRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information; and
qqStandard Form 424, Application for Federal Assistance.

Applications should also include:
qqIRS Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative.

Funding continuation requests should not resubmit Form 13424-M, but instead should complete and submit
a Project Abstract through grantsolutions.gov which updates the following information from the original
application narrative:
qqNumerical goals;
qqChanges to the Program Plan; and
qqCivil Rights Statement.

Failure to provide this information will result in non-consideration of the application or continuation
request.

The forms contained in this Publication are provided for reference purposes only. All
applications and continuation requests must be submitted electronically via www.grants.gov or
www.grantsolutions.gov, respectively. The cost of preparing and submitting an application or
continuation request is the responsibility of each applicant.
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 LITCProgramOffice@irs.gov.

76

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Form

Department of the Treasury - Internal Revenue Service

13424

OMB Number
1545-1648

Low Income Taxpayer Clinic (LITC)
Application Information

(April 2016)

I

Grant Period Request (Check one)
Single year

Multi-year

Non-Competitive continuation

Second year

Third year

II

New application

Grant amount requested (maximum $100,000)

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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 II

Street address line 2
City

III

Clinic Information
Name of clinic

IV

Public telephone number

Toll-Free telephone number (if applicable)

FAX number

V

Website address (if applicable)

VI
APPENDIX
AVII

Languages served in addition to English
Clinic Street Address

Clinic Mailing Address

Street

Street
ZIP + 4 code

City

State

ZIP + 4 code

Middle initial

Suffix

VIII

State

City

Prefix

Last name

First name

Telephone number

APPENDICES

Clinic Director Information

Email address

Attorney

CPA

Catalog Number 36126D

Enrolled Agent

GLOSSARY
INDEX

Licenses/Certifications (Check all that apply)
Other

www.irs.gov

Form 13424 (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

77

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
NOTE: Application forms, including this form (Form 13424), 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.
Purpose
This form is used to report basic information about the applicant, including the amount and period of the grant requested, basic contact
information about the clinic, and key staff members. The Program Office uses the information reported on this form to send
correspondence to the clinics and also to share with taxpayers through various IRS publications. Please be careful to follow the
instructions for this form and to report all information completely and accurately. A complete response means an entry must be provided
for each field.
Who Must Complete This Form
All organizations submitting an Application for an LITC grant or a Non-Competitive Continuation (NCC) request must complete this
form. See Publication 3319 for additional information.
Specific Instructions
Grant Period Request
Complete this section by checking the appropriate box. Organizations submitting a New Application must 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 may only apply for a single year grant.
Current grantees submitting a Non-Competitive Continuation request must check the box indicating whether the request is for the
second or third year of a multi-year grant.
Grant Amount Requested
Enter the total amount, rounded to whole dollars, of funding requested for the grant year. The maximum funding that may be requested
for any grant year is $100,000.
Applicant Information
Enter the contact information for the organization applying for the grant. If a grant is awarded, the award will be payable to the
organization listed in this section. Please provide a complete response, including zip plus-four code, for Applicant’s Mailing Address.
Phone numbers should be formatted as 123-456-7890 x.111.
Clinic Information
Enter information in this section relating to the clinic that will be providing services to taxpayers. For clinics awarded a grant, 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 same name you will use to publicize LITC services to taxpayers and the public.

Catalog Number 36126D

78

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424 (Rev. 4-2016)

APPENDIX A
Page 3

Instructions for Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (cont'd)

I

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.”

II

All applicants are required to identify a Clinic Director, Qualified Expert (QTE), and Qualified Business Administrator (QBA) at the time
of application. For more information on these positions, see Publication 3319, LITC Grant Application and Guidelines. For the clinic
director and QTE, list any applicable licenses and certifications. All applicants are required to identify the sponsoring organization's Tax
Compliance Officer. The Tax Compliance Officer is the individual authorized to speak with the IRS about federal tax compliance matters
involving the sponsoring organization.

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

Catalog Number 36126D

www.irs.gov

Form 13424 (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

79

Instructions for SF-424, Application for Federal Assistance
Note: Application forms, including this form (SF-424), 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.

Purpose
This is a standard form required to be submitted with all applications and Non-Compete Continuation (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, 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 on pages 86–87 of this appendix; 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.

Note: Some information collected on this form is not required to apply for an LITC grant; however, in order
to ensure successful processing of this form, a response must be entered for each field. The instructions found
on pages 81–85 of this appendix indicate the fields in which to enter a response of N/A. The instructions
for completing SF-424, Application for Federal Assistance, are intended as a guide for submitting LITC grant
applications and continuing funding requests.
Standard instructions are available, however the standard instructions are written to accommodate all applications
for Federal funds, and do not contain any instructions specific to the LITC grant. Standard instructions are
available at www.grants.gov/web/grants/form-instructions/sf-424-instructions.html.

Requirements
All organizations submitting an application or continuation request must complete this form. See
Publication 3319 for additional information.

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LOW INCOME TAXPAYER CLINIC

APPENDIX A

Specific Instructions
Field Name

Information

1.

Type of Submission:

(Required) Select the box labeled Application.

2.

Type of Application:

(Required) Select one type of application:

I

Item

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

• 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 multiyear grant that was awarded in 2016 or 2017.
• Revision – Do not select this box when applying for a grant.

VII

Date Received:

Enter N/A into this field.

4.

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.

6.

Date Received by State:

Enter N/A into this field.

7.

State Application Identifier:

Enter N/A into this field.

Applicant Information:

Enter the following in accordance with the instructions:

a. Legal Name:

(Required) Enter the legal name of applicant’s organization. Do not use an acronym unless it
is the legal name. This is the organization that has registered with the SAM. Information on
registering with SAM is available in Publication 3319.

VIII II

3.

III
IV
V
VI
APPENDIX
AVII

8.

VIII

c. Organizational DUNS:

(Required) Enter the employer or taxpayer identification number (EIN or TIN) as assigned by
the Internal Revenue Service. Do not enter a Social Security number. This number will be
used to conduct a federal tax compliance check.

APPENDICES

b. Employer/Taxpayer
Number (EIN/TIN):

(Required) Enter the organization’s DUNS or DUNS+4 number received from Dun and
Bradstreet. Information on obtaining a DUNS number is available in Publication 3319.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

81

Item

9.

Field Name

Information

d. Address:

Enter applicant’s physical address where services will be provided: Street 1 (Required);
City (Required); County/Parish, State (Required if country is U.S.), Province, Country
(Required), 9-digit zip/postal code (Required).

e. Organizational Unit:

Enter N/A into this field.

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

Enter the first and last name (Required); prefix, middle name, suffix, and title. Telephone
number and email (Required); fax number. 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.

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
F. U.S. Territory or Possession
G. Independent School District

82

LOW INCOME TAXPAYER CLINIC

APPENDIX A

Item

Field Name

Information

9.

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

H. Public/State Controlled Institution of Higher Education
I. Indian/Native American Tribal Government (Federally Recognized)

I

J. Indian/Native American Tribal Government (Other than Federally Recognized)
K. Indian/Native American Tribally Designated Organization

II

L. Public/Indian Housing

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

M. Nonprofit with 501(c) status
N. Nonprofit without 501(c) status
O. Private Institution of Higher Education
P. Individual
Q. For-Profit Organization (Other than Small Business)
R. Small Business
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
W. Non-U.S. Entity

VII

X. Other (specify)

VIII II

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.

13.

Competition Identification
Number/Title:

Enter TREAS-GRANTS-052018-001 as the competition identification number.

III

10.

IV
V
VI
APPENDIX
AVII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

83

Item

Field Name

Information

14.

Areas Affected By Project:

Enter the county where services will be provided. If multiple counties, list each individually.
Only list counties, not cities or regions (e.g., northwest region of state). If the clinic serves
the entire state, enter the state name and note All Counties. If necessary, attach a list of
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 1/1/2018 as the proposed start date. Applicants seeking a single
year grant should enter 12/31/2018. Applicants seeking a multi-year grant should enter
12/31/2019 or 12/31/2020, as applicable.

18.

Estimated Funding:

(Required) 18a. Enter the amount of federal grant funds requested for 2018, regardless of
whether the applicant is applying for a single-year or multi-year grant. This amount cannot
exceed $100,000.
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.

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LOW INCOME TAXPAYER CLINIC

APPENDIX A

Field Name

Information

19.

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

(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.

21.

Assurances and
Certifications and Authorized
Representative:

Check the box marked “I agree” after reviewing the Assurances and Certifications in
Publication 3319.

I

Item

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI
VII
VIII II
III
IV
V
VI
APPENDIX
AVII

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.

VIII

Note: Signing this form (SF-424) certifies that the applicant will comply with the Assurances
and Certifications listed in Publication 3319. Please carefully review the Assurances and
Certifications before signing this form.

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

85

OMB Number: 4040-0007
Expiration Date: 01/31/2019

ASSURANCES - NON-CONSTRUCTION PROGRAMS
Public reporting burden for this collection of information is estimated to average 15 minutes per response, including time for reviewing
instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of
information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for
reducing this burden, to the Office of Management and Budget, Paperwork Reduction Project (0348-0040), Washington, DC 20503.

PLEASE DO NOT RETURN YOUR COMPLETED FORM TO THE OFFICE OF MANAGEMENT AND BUDGET. SEND
IT TO THE ADDRESS PROVIDED BY THE SPONSORING AGENCY.
NOTE:

Certain of these assurances may not be applicable to your project or program. If you have questions, please contact the
awarding agency. Further, certain Federal awarding agencies may require applicants to certify to additional assurances.
If such is the case, you will be notified.

As the duly authorized representative of the applicant, I certify that the applicant:
1.

Has the legal authority to apply for Federal assistance
and the institutional, managerial and financial capability
(including funds sufficient to pay the non-Federal share
of project cost) to ensure proper planning, management
and completion of the project described in this
application.

2.

Will give the awarding agency, the Comptroller General
of the United States and, if appropriate, the State,
through any authorized representative, access to and
the right to examine all records, books, papers, or
documents related to the award; and will establish a
proper accounting system in accordance with generally
accepted accounting standards or agency directives.

3.

Will establish safeguards to prohibit employees from
using their positions for a purpose that constitutes or
presents the appearance of personal or organizational
conflict of interest, or personal gain.

4.

Will initiate and complete the work within the applicable
time frame after receipt of approval of the awarding
agency.

5.

Will comply with the Intergovernmental Personnel Act of
1970 (42 U.S.C. §§4728-4763) relating to prescribed
standards for merit systems for programs funded under
one of the 19 statutes or regulations specified in
Appendix A of OPM's Standards for a Merit System of
Personnel Administration (5 C.F.R. 900, Subpart F).

6.

Will comply with all Federal statutes relating to
nondiscrimination. These include but are not limited to:
(a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352)
which prohibits discrimination on the basis of race, color
or national origin; (b) Title IX of the Education
Amendments of 1972, as amended (20 U.S.C.§§16811683, and 1685-1686), which prohibits discrimination on
the basis of sex; (c) Section 504 of the Rehabilitation

Previous Edition Usable

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LOW INCOME TAXPAYER CLINIC

Act of 1973, as amended (29 U.S.C. §794), which
prohibits discrimination on the basis of handicaps; (d)
the Age Discrimination Act of 1975, as amended (42 U.
S.C. §§6101-6107), which prohibits discrimination on
the basis of age; (e) the Drug Abuse Office and
Treatment Act of 1972 (P.L. 92-255), as amended,
relating to nondiscrimination on the basis of drug
abuse; (f) the Comprehensive Alcohol Abuse and
Alcoholism Prevention, Treatment and Rehabilitation
Act of 1970 (P.L. 91-616), as amended, relating to
nondiscrimination on the basis of alcohol abuse or
alcoholism; (g) §§523 and 527 of the Public Health
Service Act of 1912 (42 U.S.C. §§290 dd-3 and 290
ee- 3), as amended, relating to confidentiality of alcohol
and drug abuse patient records; (h) Title VIII of the Civil
Rights Act of 1968 (42 U.S.C. §§3601 et seq.), as
amended, relating to nondiscrimination in the sale,
rental or financing of housing; (i) any other
nondiscrimination provisions in the specific statute(s)
under which application for Federal assistance is being
made; and, (j) the requirements of any other
nondiscrimination statute(s) which may apply to the
application.
7.

Will comply, or has already complied, with the
requirements of Titles II and III of the Uniform
Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (P.L. 91-646) which provide for
fair and equitable treatment of persons displaced or
whose property is acquired as a result of Federal or
federally-assisted programs. These requirements
apply to all interests in real property acquired for
project purposes regardless of Federal participation in
purchases.

8. Will comply, as applicable, with provisions of the
Hatch Act (5 U.S.C. §§1501-1508 and 7324-7328)
which limit the political activities of employees whose
principal employment activities are funded in whole
or in part with Federal funds.

Authorized for Local Reproduction

Standard Form 424B (Rev. 7-97)
Prescribed by OMB Circular A-102

APPENDIX A

14. Will comply with P.L. 93-348 regarding the protection of
human subjects involved in research, development, and
related activities supported by this award of assistance.

16. Will comply with the Lead-Based Paint Poisoning
Prevention Act (42 U.S.C. §§4801 et seq.) which
prohibits the use of lead-based paint in construction or
rehabilitation of residence structures.
17. Will cause to be performed the required financial and
compliance audits in accordance with the Single Audit
Act Amendments of 1996 and OMB Circular No. A-133,
"Audits of States, Local Governments, and Non-Profit
Organizations."

VIII II

18. Will comply with all applicable requirements of all other
Federal laws, executive orders, regulations, and policies
governing this program.

III

19. Will comply with the requirements of Section 106(g) of
the Trafficking Victims Protection Act (TVPA) of 2000, as
amended (22 U.S.C. 7104) which prohibits grant award
recipients or a sub-recipient from (1) Engaging in severe
forms of trafficking in persons during the period of time
that the award is in effect (2) Procuring a commercial
sex act during the period of time that the award is in
effect or (3) Using forced labor in the performance of the
award or subawards under the award.

DATE SUBMITTED

VIII

APPLICANT ORGANIZATION

VI
APPENDIX
AVII

TITLE

V

SIGNATURE OF AUTHORIZED CERTIFYING OFFICIAL

IV

12. Will comply with the Wild and Scenic Rivers Act of
1968 (16 U.S.C. §§1271 et seq.) related to protecting
components or potential components of the national
wild and scenic rivers system.

15. Will comply with the Laboratory Animal Welfare Act of
1966 (P.L. 89-544, as amended, 7 U.S.C. §§2131 et
seq.) pertaining to the care, handling, and treatment of
warm blooded animals held for research, teaching, or
other activities supported by this award of assistance.

VII

11. Will comply with environmental standards which may be
prescribed pursuant to the following: (a) institution of
environmental quality control measures under the National
Environmental Policy Act of 1969 (P.L. 91-190) and
Executive Order (EO) 11514; (b) notification of violating
facilities pursuant to EO 11738; (c) protection of wetlands
pursuant to EO 11990; (d) evaluation of flood hazards in
floodplains in accordance with EO 11988; (e) assurance of
project consistency with the approved State management
program developed under the Coastal Zone Management
Act of 1972 (16 U.S.C. §§1451 et seq.); (f) conformity of
Federal actions to State (Clean Air) Implementation Plans
under Section 176(c) of the Clean Air Act of 1955, as
amended (42 U.S.C. §§7401 et seq.); (g) protection of
underground sources of drinking water under the Safe
Drinking Water Act of 1974, as amended (P.L. 93-523);
and, (h) protection of endangered species under the
Endangered Species Act of 1973, as amended (P.L. 93205).

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

10. Will comply, if applicable, with flood insurance purchase
requirements of Section 102(a) of the Flood Disaster
Protection Act of 1973 (P.L. 93-234) which requires
recipients in a special flood hazard area to participate in the
program and to purchase flood insurance if the total cost of
insurable construction and acquisition is $10,000 or more.

II

13. Will assist the awarding agency in assuring compliance
with Section 106 of the National Historic Preservation
Act of 1966, as amended (16 U.S.C. §470), EO 11593
(identification and protection of historic properties), and
the Archaeological and Historic Preservation Act of
1974 (16 U.S.C. §§469a-1 et seq.).

I

9. Will comply, as applicable, with the provisions of the DavisBacon Act (40 U.S.C. §§276a to 276a-7), the Copeland Act
(40 U.S.C. §276c and 18 U.S.C. §874), and the Contract
Work Hours and Safety Standards Act (40 U.S.C. §§327333), regarding labor standards for federally-assisted
construction subagreements.

APPENDICES

Standard Form 424B (Rev. 7-97) Back

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

87

Form 13424-M
(August 2014)

Department of the Treasury - Internal Revenue Service

Low Income Taxpayer Clinic (LITC)
Application Narrative

OMB Number
1545-1648

Applicant Organization name

Use this template to complete the Background Information, Program Performance Plan, and Civil Rights Review required to be submitted with all LITC
grant applications. Your responses may contain internal references. There is no need to reprint text contained elsewhere on this form.

Background Information
This section is designed to solicit information concerning an applicant’s qualifications.The information will be used to determine whether the organization
has sufficient experience in delivering services to low income and ESL individuals and the infrastructure to properly manage federal funds. Provide
specific responses for each of the following requirements and keep comments concise and relevant.

I. Experience
A. Describe the applicant’s experience in operating an LITC program. Do not include information about the experience of specific individuals here. If the
applicant has no experience operating an LITC program, describe the applicant's experience in delivering services (e.g., representation, education,
and advocacy) to low income and ESL individuals and families. Include types of services provided, languages served, number of individuals reached,
and geographic area covered.

B. Describe the applicant’s existing affiliations with other organizations, such as schools, governmental bodies, or other charitable organizations.

C. Describe the applicant’s experience in supervising staff, students, and volunteers and providing technical assistance to other organizations.

D. Describe the applicant’s experience networking with other community-based organizations with which it can work to reach taxpayers.

II. Financial Responsibility
E. Describe the applicant’s ability to properly spend and account for program funds. Include examples of experience in managing federal grants, if any,
and a description of the organization's existing accounting system and accounting support staff. Include copies of relevant internal accounting
procedures and other pertinent information.
1. Describe accounting procedures.

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APPENDIX A
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2. Describe the method for ensuring that LITC grant funds and matching funds are used solely for qualifying LITC activities. If the applicant also
operates a VITA or TCE program, specifically identify how LITC funds are kept separate from those activities.

I
II

3. Describe the plans for audits and controls.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

4. With regard to the financial statements submitted with this application, provide the following information: (if a profit and loss statement or other
substitute was submitted because financial statements were not available, skip to question 5)
Unaudited

Audited

i. If audited, was the audit a single audit conducted in accordance with 2 CFR 200.501.
ii. Indicate whether the auditor provided a:

Unqualified opinion

Yes
Qualified opinion

No

No opinion

iii. Indicate the year-end date of the financial statements submitted. (MM/DD/YYYY)

VII

5. Describe the qualifications and relevant expertise of the Qualified Business Administrator (QBA) with business administration and managing
federal grants.

VIII II
III

Program Performance Plan
IV

This section of the application is designed to solicit information concerning the ability of an applicant to operate a quality LITC. Provide specific
responses for each of the following requirements and keep comments concise and relevant.

I. Program Staff

V

A. Describe the qualifications and specific tax expertise of the:

VI
APPENDIX
AVII

1. The Qualified Tax Expert (QTE); and

2. The Clinic Director.

VIII
APPENDICES

B. List the titles, responsibilities, and qualifications of clinic staff other than the QTE, QBA, or Clinic Director.

GLOSSARY
INDEX

Catalog Number 59958R

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LOW INCOME TAXPAYER CLINIC

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Page 3 of 6
C. If students will be used to provide clinic services, indicate the number and type of students (law students, graduate accounting students, etc.), and

1. Whether the clinic will obtain a special appearance authorizing students to represent taxpayers before the IRS; and

Yes

No

2. Whether permission will be obtained from the United States Tax Court for students to practice before the Court.

Yes

No

D. Identify clinic staff authorized to represent taxpayers before the IRS and identify whether each is an attorney, Certified Public Accountant, or enrolled
agent.

E. Identify clinic staff admitted to practice before the U.S. Tax Court and include each individual's Tax Court bar number.

F. Indicate the amount of time that clinic staff and students devote to clinic activities. Detail the method used to track staff and student time.

II. Taxpayer Services
Describe the proposed program plan for the period for which the grant is requested.
G. Describe the type of representation services to be provided.

1. Describe the method used to track the 90/250 income requirement. Include an explanation of any alternative methods used to measure income for
purposes of determining eligibility for controversy services (e.g., seasonal workers.)

2. Describe the method used to track the amount in controversy for any taxable year and state the policy that will be used to accept cases when the
amount in controversy exceeds the amount specified in IRC § 7463 (currently $50,000.)

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APPENDIX A
Page 4 of 6
3. Briefly describe the procedure for intake, assignment, and monitoring of representation cases.

I

H. Describe consultation services to be provided and how they will be made available to taxpayers.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

I. Describe the educational activities to be provided, including educational topics to be addressed, and how they will be made available to taxpayers.

J. Describe the identified population for ESL representation, education, and outreach and identify the methods and media that the clinic will use to reach
low income and ESL taxpayers.

VII
VIII II

III. Clinic Operations
K. Describe plans for tracking the delivery of services to low income and ESL taxpayers.

III
IV
V

L. Describe plans to protect taxpayer privacy and to maintain confidentiality of taxpayer information and any tax return information. Describe the
procedures used to safeguard client records. Is there a private office or conference room to meet with clients.

VI
APPENDIX
AVII

M. Describe the clinic’s publicity plan, including potential venues for outreach to low income taxpayers.

VIII
APPENDICES

N. Identify geographic area(s) the clinic will serve. Provide demographic information including the total population, number of low income residents, and
number of ESL residents.

GLOSSARY
INDEX

Catalog Number 59958R

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LOW INCOME TAXPAYER CLINIC

91

Page 5 of 6
O. Indicate the dates, days, and hours of clinic operation. State whether the clinic will be open full-time and year-round. Describe plans for staffing the
clinic during periods of student absences if the LITC is part of an academic institution. Specifically state whether the clinic will accept and work new
cases during periods of student absences or merely refer taxpayers to other organizations.

P. Describe the clinic’s plans for charging nominal fees, if any, and the amount.

IV. Volunteers
Q. Describe the applicant’s pro bono panel and how panel members will be identified and recruited.

R. Describe the procedures used to assign cases to volunteers, monitor case progress, and evaluate services to ensure that taxpayers receive quality
assistance.

S. Detail the method used to track volunteer time.

V. Training and Resources
T. Describe the training to be provided to clinic staff, students, and volunteers.

U. Identify the continuing professional education (CPE) activities of the clinic staff and volunteers.

V. Describe the clinic’s tax library and any plans to provide access to other research resources.

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Form 13424-M (Rev. 8-2014)

APPENDIX A
Page 6 of 6
VI. Program Monitoring, Evaluation, and Reporting
W. Describe the strategy for monitoring and evaluating program results (in short and long-term), including how success will be defined and measured.

I
II

X. Indicate how the clinic intends to measure client satisfaction.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

VII. Program Numerical Goals
Y. If the program goals extend beyond one year, state goals in annual increments of up to
three years. Project numerical goals for

First Year

Second Year
(if applicable)

Third Year
(if applicable)

1. New representation cases;
2. Consultations with low income taxpayers;
3. Educational activities; and

VII

4. Taxpayers to be reached in educational activities.

VIII II

Civil Rights Review
This information is mandatory and required of every applicant annually. Responses to these civil rights questions must be directly related to the clinic
and not the sponsoring organization. If the clinic 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.

III

A. 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.

IV
V
VI
APPENDIX
AVII

B. A description of all pending applications for financial assistance and all financial assistance currently provided by other federal agencies.

VIII

C. 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 recommendations of the review; and a report on the status or disposition of such findings and
recommendations.

APPENDICES
GLOSSARY
INDEX

Catalog Number 59958R

www.irs.gov

Form 13424-M (Rev. 8-2014)

LOW INCOME TAXPAYER CLINIC

93

Non-Compete Continuation Requests do not need to include Form 13424-M, but must include a Project
Abstract to update program information supplied in the application.

COMPLETING THE PROJECT ABSTRACT IN GRANT SOLUTIONS
Purpose
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.

Reporting Requirements
Only grantees submitting a Non-Compete Continuation (NCC) request must complete and submit a Project
Abstract through www.grantsolutions.gov. The LITC Program Office provides annual training on using the Grant
Solutions system. The Project Abstract must contain the following information in regard to the grant year for
which the NCC request is being submitted:
I. Numerical Goals
List separately numerical goals for each of the following a-d:
a. New representation cases;
b. Consultations;
c. Educational activities to be conducted; and
d. Taxpayers to be reached in educational activities.
V. Changes to the Program Plan
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. Civil Rights Statement
This information is mandatory and required of every applicant annually. You must answer yes or no for
each subparts a-c. For each affirmative answer, provide the detail requested for that subpart. Responses
to these civil rights questions must be directly related to the clinic and not the sponsoring organization. If
the clinic 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.
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

94

LOW INCOME TAXPAYER CLINIC

APPENDIX A

allegation; and the status of the lawsuit or complaint, including whether the parties to a lawsuit have
entered into a consent decree.
I

ii. A description of all pending applications for financial assistance and all financial assistance currently
provided by other federal agencies.

II

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
recommendations of the review; and a report on the status or disposition of such findings and
recommendations.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

iv. A statement that the applicant agrees to display Publication 4053, Civil Rights Poster (provided to by
the Internal Revenue Service).
v. A signed and dated Standard Form 424, with box 21 checked (see page 85) agreeing to the
statement of assurances concerning civil rights compliance.

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

LOW INCOME TAXPAYER CLINIC

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APPENDIX B
I
II

BUDGET FORMS FOR LITC GRANT APPLICATIONS
AND CONTINUATION REQUESTS

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

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97

BUDGET AND FINANCIAL INFORMATION
All organizations submitting an application or Non-Compete Continuation request must submit the following
budget and financial information:
qqSF-424A, Budget Information – Non-Construction Programs. This form is used to provide a budget for the

grant year. Detailed instructions for completing the form are provided in this appendix.
qqForm 13424-J, Detailed Budget Worksheet. This worksheet and accompanying narrative provides a

breakdown of budgeted expense items in accordance with the budget categories listed in section B of
Standard Form-424A. Detailed instructions for completing the worksheet and narrative, including
examples, are provided in this appendix.
qqCopy of the applicant’s most recent audited or unaudited financial statements. If the applicant expends

more than $750,000 in federal funds this must be a single audit or program-specific audit as defined in
2 CFR §200.501; 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.
qqA copy of the applicant’s indirect cost rate agreement, if applicable.

Failure to provide this information will result in non-consideration of the application or continuation
request.

Things to note:
qqEach budget item does not require a dollar-for-dollar match, but the total matching funds must equal
or exceed the total federal funds requested.
qqFederal funds are those funds the applicant is seeking from the IRS in support of the LITC Program.
qqNon-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.
qq2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, provides guidance about allowable and unallowable expenses. Also, see
Section VI. D, Spending LITC Grant Funds and Matching Funds, for a list of common expenses that
are allowable or unallowable.
qqPlease round figures to whole dollars only.
qqBudgets should only include funding requested for grant year 2018, even if an applicant is applying
for a multi-year grant.

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LOW INCOME TAXPAYER CLINIC

APPENDIX B

Instructions for SF-424A, Budget Information for Non-Construction Programs
Purpose
I

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.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Note: The instructions for completing SF-424A, Budget Information – Non-Construction Programs contained
in this Publication (Publication 3319) are intended as a guide for submitting LITC grant applications and
continuing funding requests. Standard instructions are available, however the standard instructions are written to
accommodate all applications for federal funds, and do not contain any instructions specific to the LITC grant.
Standard instructions are available at www.grants.gov/web/grants/form-instructions/sf-424a-instructions.html.

Requirements

VII

Standard Form 424A, Budget Information – Non-Construction Programs, is required for each application or
continuation request. See Publication 3319 for additional information.
Budget information must also be reported on Form 13424-J, Detailed Budget Worksheet.

VIII II

For purposes of the LITC Program, the term “non-federal funds” has the same meaning as the term “matching
funds.”

III

Note: Application forms, including this form (SF-424A), 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.

IV
V
VI
APPENDIX
BVII
VIII
APPENDICES
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INDEX

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99

Specific Instructions
Item

Information

General Instructions

This form is designed so that application can be made for LITC grant funds. Sections A, B, C, and D should
include budget estimates for year 2018 only. If applying for a multi-year grant or continuation request,
Section E should present the need for Federal assistance in the subsequent grant years. All applications
should contain a breakdown by the categories shown in lines a-k of Section B.

Section A.

Budget Summary

Line 1,
Columns (a) and (b).

Enter LITC in Column (a) and 21.008 (the Federal Domestic Assistance Catalog number) in Column (b).

Line 1,
Columns (c) through
(g).

Leave Column (c) and (d) blank. Enter in Column (e) the amount of LITC grant funds requested for grant
year 2018. This amount may not exceed $100,000. Enter in Column (f) the amount of matching funds to
be provided for grant year 2018. LITC grant funds require a dollar-for-dollar match. Thus, the amount in
Column (f) must be equal to or greater than the amount entered in Column (e).
Enter in Column (g) the sum of the amounts entered in Columns (e) and (f). The amount in Column (g)
should represent the total funds needed to support the LITC program for 2018.

Lines 2-4.

Leave lines 2 through 4 blank.

Line 5.

Show the total for all columns used.
The amount on line 5(e) of this form (SF-424A) should equal the amount on SF-424, Application for Federal
Assistance, line 18(a). The amount on line 5(f) of this form (SF-424A) should equal the sum of the amounts
on SF-424, Application for Federal Assistance, lines 18(b)-(f). The amount on line 5(g) of this form (SF-424A)
should equal the amount on SF-424, Application for Federal Assistance, line 18(g).

Section B.

Budget Categories

In Column (1) enter the total budgeted funds (both federal and non-federal) by the
object class categories listed on rows a through j. Leave Columns (2) through (4)
blank.

Line 6a.
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 on Line 6b). Volunteer in-kind services
should not be included under the Personnel category;
they should be included on Line 6h.

Line 6b.
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 Category A, Personnel.

Line 6c.
Travel

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

Line 6d.
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 and must
be valued at the fair market value of the property at the
time of the donation.
Report equipment purchases less than $5,000 on Line
6e (2 CFR § 200.94). Report leased equipment on Line
6f and equipment maintenance expense on Line 6h.

100

LOW INCOME TAXPAYER CLINIC

APPENDIX B

Line 6f.
Contractual

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.

Line 6g.

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

Line 6h.
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 categories a. through g. The value of volunteer in-kind services is
included in this category as matching funds. See Publication 3319 for more information.

Line 6i.

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

Line 6j.

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:

II

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 and are valued at
the fair market value of the property at the time of the donation.

I

Line 6e.
Supplies

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

i. Indirect Cost Rate Agreement

✓✓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.

VII

ii. De Minimis 10 percent rate

✓✓Rules are set forth in 2 CFR Part 200;
✓✓Clinics that elect to use the de minimis rate are prohibited from charging administrative or facility

VIII II

costs as separate expense items.

Line 6k.

III

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 10 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.

IV

Enter the total of amounts on Lines 6(i) and 6(j). For all applications and continuation requests the total
amount in Column (5), Line 6(k), should be the same as the total amount shown in Section A, Column (g),
Line 5.
The amounts entered in Section B, column (5) must equal the totals in each category on Form 13424-J,
Detailed Budget Worksheet.

Section C.

Non-Federal Resources

Lines 8.

Enter amounts of non-Federal resources that will be used on the grant. The information entered in
Section C indicates the amount matching funds to be provided by source.

Column (a).

Enter LITC.

Column (b).

Enter the amount of matching funds that will come directly from the applicant’s organization.

Column (c).

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 agencies should leave this column blank.

Column (d).

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

Column (e).

Enter totals of Columns (b), (c), and (d).

VI
APPENDIX
BVII

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

V

Line 7.

VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

101

Lines 9-11.

Leave lines 9 through 11 blank.

Line 12.

Enter the total for each of Columns (b) through (e). The amount in Column (e) should be equal to the
amount on Line 5, Column (f), Section A.
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

Line 13.

Enter the amount of LITC grant funds needed by quarter during 2018.

Line 14.

Enter the amount of cash matching funds from all other sources needed by quarter during 2018. Do not
include the value of any in-kind matching funds.

Line 15.

Enter the totals of amounts on Lines 13 and 14.

Section E.

Budget Estimates of Federal Funds Needed for Balance of the Project

Line 16.

This section should only be completed by applicants requesting a multi-year grant or grantees submitting a
continuation request. Applicants requesting a single year grant for 2018 should leave Lines 16 through 23
blank.
Enter LITC in Column (a). For new applications and continuation requests, enter in Column (b) the amount
of LITC funds requested for 2019, and in Column (c) the amount of LITC funds requested for 2020, if
applicable. Leave Columns (d) and (e) blank.

102

Lines 17-19.

Leave Lines 17 through 19 blank.

Line 20.

Enter the total for each of the Columns (b)-(e).

Section F.

Other Budget Information

Lines 21-23.

Leave Lines 21 through 23 blank.

LOW INCOME TAXPAYER CLINIC

APPENDIX B

FULL-TIME EQUIVALENT (FTE) CALCULATION

I

The definition of FTE (Full-Time Equivalent) is the number of working hours that represents one full-time
employee during a fixed time period, such as one month or one year. When applying this formula for purposes
of the LITC grant, first determine the portion of each employee’s time that is devoted activities funded by the
LITC grant. For any staff position, the number is calculated based on the sum of hours actually spent on LITC
activities over 26 bi-weekly pay periods and divided by a constant number, which represents the total number
of hours required of a full-time employee working in that position. For example, if a clinic director working
full-time is required to work 80 hours per pay period, the constant would be 2,080 hours (26 pp x 80 hours); if a
clinic director working full-time is required to work 75 hours per pay period, the constant would be 1,950 hours
(26 pp x 75 hours). The result is the employee’s FTE percentage, for LITC grant purposes. 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.

II
I. LITC
III PROGRAM
IV
OVERVIEW
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.
Note: ABC Legal Services LITC computes a 1.0 FTE based on a 40-hour work week (2,080 hours per year).

VII

Clinic Director/QTE – John Fordham, Esq.

VIII II

John works full-time at ABC Legal Services. He spends 32 hours per week on LITC grant activities, for an annual
total of 1,664 hours. For purposes of the LITC grant, he is a 0.80 FTE (1,664/2,080). 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). John’s compensation is funded using
$70,000 of grant funds and $19,000 operating funds. From the $71,200 in compensation for work on LITC
activities, $70,000 will be paid from LITC grant funds (federal funds), and $1,200 from operating funds. Thus, a
maximum of $1,200 may be classified as matching funds.

III
IV
V

The FTE can also be utilized to determine the appropriate amount of John’s fringe benefits allocable to the grant.
If the total cost of his fringe benefits is $10,000 ($10,000 x 0.80=$8,000) then $8,000 can properly be attributed
to the LITC grant.

VI
APPENDIX
BVII

Paralegal – Alice Gonzaga

VIII

Alice works part-time for ABC Legal Services, for a total of 1,040 hours. Annually she spends a total of 900
hours on LITC grant activities. For purposes of the LITC grant, she is a 0.43 FTE (900/2,080). Alice is paid at
an hourly rate of $22.00. In total, her compensation for working at ABC Legal Services is $22,880; because she
is part time, to calculate the proper amount of salary allocable to the LITC, her LITC hours are divided by her
total hours (900/1040=0.87). Because Alice is paid by the hour in lieu of salary, to arrive at the exact amount
of pay attributable to her work for the LITC, multiply her hours by her pay rate. Thus, 87% of her total pay is
compensation for her work in the LITC, which equates to $19,800. Alice’s compensation for work in the LITC
clinic is funded from a mix of federal funds and other contributions from XYZ Private Foundation. The $22,880
in compensation paid to Alice is comprised of $10,000 paid from LITC grant funds (federal funds), and $12,880
paid from XYZ Private Foundation funds. Thus, a maximum of $9,800 may be classified as matching funds.

APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

103

Intake – Ruth Washington

Ruth works full-time at ABC Legal Services. She spends 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 ($15 x 2,080 hours = $31,200). The portion
of her compensation attributable to LITC activity is computed by multiplying her total compensation by her FTE
fraction, for a result of $14,352. Her compensation is comprised of $14,352 paid from LITC grant funds (federal
funds), and $16,848 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.
Receptionist – Debra Chapman

Debra works full-time at ABC Legal Services. She provides administrative and clerical support to 3 programs
including the LITC program. Debra’s annual salary is $30,000. Since Debra spends a third of her time on LITC
activities, she is a 0.33 FTE for purposes of the LITC grant, meaning $10,000 of her annual salary is allocable to
LITC activities. The $10,000 allocable portion is 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.

Figure 11, Calculating FTE (Full-Time Equivalent)
Calculating FTE (Full-Time Equivalent)* Examples

80%

43%

Clinic Director
(Employee 1)

Paralegal
(Employee 2)

46%

Intake Specialist
(Employee 3)

Time spent on LITC Activities
* 1.0 FTE based on a 40-hour work week (2,080 hours per year).

104

LOW INCOME TAXPAYER CLINIC

33%

Receptionist
(Employee 4)

Time spent on Other Activities

APPENDIX B

Form 13424-J
(April 2016)

Department of the Treasury - Internal Revenue Service

Grant Period
01/01/2018

From
Federal

Match

To

12/31/2018

I

EXAMPLE

Name of Low Income Taxpayer Clinic
ABC Legal Services LITC
Expense Categories

OMB Number
1545-1648

Detailed Budget Worksheet

Total

80,355

35,000

115,355

II

1,625

21,446

23,071

900

1,265

2,165

D. Equipment

0

0

0

E. Supplies

0

1,845

1,845

F. Contractual

0

11,814

11,814

0

27,253

27,253

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

82,880

98,623

181,503

A. Personnel

B. Fringe Benefits
C. Travel

G. Construction

H. Other Expenses

I. Total Direct Charges

K. Totals

7,120

7,120

90,000

98,623

VII

J. Indirect Charges

188,623

VIII II
III
IV
V
VI
APPENDIX
BVII
VIII
APPENDICES
GLOSSARY
INDEX

Catalog Number 57758V

www.irs.gov

Form

13424-J (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

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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).

EXAMPLE

Clinic Director/QTE – John Fordham, Attorney - .80 FTE Annual Salary $89,000 x 0.80 = $71,200. Source of funds will be $50,000 paid from
federal funds, $20,000 paid from Legal Service Corporation (LSC), and $1,200 paid from private contributions.
Paralegal – Alice Gonzaga - .43 FTE - $22/hr x 900 hrs = $19,800. Source of funds will be $10,000 paid from federal funds and $9,800 paid from
XYZ Private Foundation funds.
Intake – Ruth Washington - .46 FTE - $15/hr x 957 hrs = $14,355. Source of funds will be $14,355 paid from federal funds.

Receptionist – Debra Chapman – .33 FTE – Annual Salary $30,000 x 0.33 = $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. Source of funds will be $6,000 paid from federal funds and
$4,000 paid from private cash contributions.
B. Fringe Benefits
Fringe benefits are calculated as 20% of wages, $115,355 x .20 = $23,071.
Fringe benefits represent the cost of Social Security and Medicare taxes, State Unemployment taxes, health insurance premiums, life insurance, and
employer pension plan contribution.
Source of funds will be $1,625 paid from federal funds and $21,446 paid from XYZ Private Foundation funds.

C. Travel
$1,800 for Clinic Director John Fordham to attend the LITC Conference.
Local travel to conduct educational and outreach activities. $60 parking and $305 mileage (570 miles at $.535 per mile).
Source of funds will be $900 paid from federal funds and $1,265 paid from 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 2.02 FTEs (.80 FTE for John
Fordham + .43 FTE for Alice Gonzaga + .46 FTE for Ruth Washington + .33 FTE for Debra Chapman = 2.02 FTEs). Total FTEs in the ABC Legal
Services organization is 40 FTEs. The ratio of shared expenses is estimated at 5.0% (2.02 / 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 5.0% = $1,845.
Source of funds will be from XYZ Private Foundation funds.
F. Contractual
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.
Source of funds will be from XYZ Private Foundation funds.
Telephone and Internet – These costs are shared expenses and are charged to the LITC using the FTE allocation methodology explained above.
Catalog Number 57758V

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LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form

13424-J (Rev. 4-2016)

APPENDIX B

Page 3
The organization's total telephone and internet cost is estimated to be $35,880.
$35,880 x 5.0% = $1,794.
Source of funds will be from XYZ Private Foundation funds.

I

2 CFR § 200.501 Audit – This cost is a shared expense and is charged to the LITC using the FTE allocation methodology explained above.
The organization's total 2 CFR § 200.501 audit cost is estimated to be $20,400.
$20,400 x 5.0% = $1,020.
Source of funds will be paid from private cash contributions.

II

EXAMPLE

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Advertising costs – These costs will be incurred solely to publicize the LITC program and are not a shared expense.
Planned advertising for LITC representation and education services are estimated to be $3,000.
Source of funds will be paid from private cash contributions.
G. Construction

H. Other Expenses
Third-party in-kind contributions:

VII

Representation services: $200/hr x 95 hrs = $19,000.

VIII II

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.

III

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.

IV

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.

I. Total Direct Charges

V
VI
APPENDIX
BVII
VIII

J. Indirect Costs
The organization has an approved Indirect Cost Rate Agreement of 20% of direct salaries. However, the organization has agreed to charge the LITC
program a reduced rate of 10%.
$71,200 x 10% = $7,120

APPENDICES

Catalog Number 57758V

www.irs.gov

GLOSSARY
INDEX

Matching Funds
Total matching funds will be $98,623 from the following sources:
• $20,000 cash from Legal Service Corporation funding.
• $42,150 cash from XYZ Private Foundation.
• $9,220 cash from private contributions.
• $27,253 third-party in-kind contributions of services donated by volunteers.
Form

13424-J (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

107

Page 4

Instructions for Form 13424-J, Detailed Budget Worksheet
Purpose

B. Fringe Benefits

This form is used to report how the applicant plans to spend federal grant
funds and matching funds during the grant period. This form is also used
to report a narrative explanation of how each budgeted amount was
calculated and the sources and valuation of matching funds. All budgeted
amounts must be reasonable, necessary, and allocable to this grant. See
Publication 3319 and 2 CFR Part 200 for guidance on costs and matching
funds.

Report fringe benefits that will be paid on behalf of LITC staff whose
wages and salaries are reported in category A, Personnel. In the
explanation state the fringe benefits rate(s), the items that constitute the
fringe benefits, what portion will be 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 total amount for
Fringe Benefits must equal the amount entered on line 6(b) of SF 424A.

Note: Grant budget amounts must also be reported on SF 424A.

1. Show the formula (methodology) for calculating fringe benefits for
each position listed in Category A.

Who Must Complete This Form
All organizations submitting an application or continuation request must
complete this form. See Publication 3319 for additional information.

2. State what items are included in fringe benefits.
3. Provide the dollar amount attributable to federal and match.
4. Source of matching funds

Specific Instructions

C. Travel

Important:
1. 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).
2. 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.

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 "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 in the Personnel category. They should be
included in H, Other Expenses. The total amount for Personnel must
equal the amount entered on line 6(a) of SF 424A.
1. State the Full-Time Equivalent (FTE). List number of hours worked
by a full-time employee in a single week. Determine the number of
FTE hours in the reporting period (Number of weeks in period
multiplied by hours worked by a full-time employee in one week (e.g.,
26 weeks x 37.5=975 hours)).
2. Calculate the FTE for each clinic employee. Determine each
clinic staff member’s full-time equivalent. Take the staff member’s
total expected 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.
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.

Report budgeted 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 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 that will be purchased by the
applicant 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 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 total amount for Equipment must equal
the amount entered on line 6(d) of SF 424A. Only equipment costing
$5,000 or more is included in the category; equipment costing less is
included in category E.
Note: Report equipment purchases less than $5,000 under Supplies
(2CFR § 200.94). Report leased equipment in category F,
Contractual; report equipment maintenance expense in category H,
Other Expenses.

E. Supplies
Report the budgeted 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 and are valued at the fair market value of the
property at the time of the donation. In the explanation, identify:
• The type of supplies that will be used;
• Whether 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 supplies, explain the
amount of the supplies contributed and how the valuation was
3. Calculate the personnel expense for each staff member.
determined, as well as the anticipated source of the donation. The
Personnel expense can be calculated as a percent of total time/FTE
total amount for Supplies must equal the amount entered on line 6(e)
multiplied by salary, or by multiplying the number of hours worked by
of SF 424A.
the applicable hourly rate.
4. Determine and list out the dollar amount attributable to federal
and match.
5. List sources of match.

Catalog Number 57758V

108

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form

13424-J (Rev. 4-2017)

APPENDIX B

Page 5
I. Total Direct Charges

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; the value assigned may not exceed
the fair rental value of comparable space. The explanation should identify:

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

• Nature of the expense;

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 line 6(f) of SF 424A.
There are two acceptable methodologies for calculating federal funds
allocable to indirect costs:
1. Indirect Cost Rate Agreement
a. Must be approved in advance;
b. Agreement must set forth cost items included in the rate; and
c. The clinic may not charge items included in the rate as separate
expense items.
a. Rules are set forth in 2 CFR Part 200;

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) will not be used as matching funds for any other federal program and
(2) will not be funds received from any other federal grant unless
specifically authorized by statute to be eligible as matching funds.

III

1. List Amount of Match by Source
2. List total of all Match Funding

IV

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 10 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.

Matching Funds

VIII II

b. Clinics that elect to use the de minimis rate are prohibited from
charging administrative or facility costs as separate expense
items.

Note: If indirect costs will be 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 10% de minimis rate to charge indirect costs on all of 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.

VII

2. De Minimis 10 percent rate

Report indirect costs not directly related to the LITC program, but incurred
as part of the general overhead and administration of the sponsoring
organization. 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 will be applied,
and the computation for the indirect charges amount. The total amount for
Indirect Charges must equal the amount entered on line 6(j) of SF 424A.
Briefly summarize the expenses included in the indirect cost rate
agreement.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

• Source of the matching funds.

J. Indirect Charges

II

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

I

F. Contractual

Not applicable to this grant. No expenses are allowed.

H. Other Expenses

V

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.

G. Construction

VI
APPENDIX
BVII

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:
• The type of expense;
• Whether the cost was paid using federal or matching funds; and
• 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 for more information. The total amount
for other Expenses must equal the amount entered on line 6(h) of SF 24A.

APPENDICES
GLOSSARY
INDEX

Catalog Number 57758V

www.irs.gov

Form

13424-J (Rev. 4-2017)

LOW INCOME TAXPAYER CLINIC

109

This page intentionally left blank.

110

LOW INCOME TAXPAYER CLINIC

APPENDIX C

I

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI
VII

VIII II

III

IV

V

VI
APPENDIX
CVII
VIII

APPENDICES

GLOSSARY
INDEX

111

LOW INCOME TAXPAYER CLINIC

II

FORMS FOR REPORTING LITC GRANTEE ACTIVITIES

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

This appendix contains an example of a completed Standard Form 425, Federal Financial Report and
Form 13424-L, Statement of Grant Expenditures.

Instructions for SF-425, Federal Financial Report
Purpose
This form 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.
Note: The instructions for completing SF-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.

Reporting Requirements
Grantees are required to submit Standard Form 425, Federal Financial Report, as part of the Interim and Year-End
report. See Publication 3319 for additional information.
Note: These instructions relate only to preparation of SF-425 as part of the Interim and Year-end reports. For
instructions on preparing quarterly submissions of SF-425 in the Division of Payment Management (DPM), visit
www.dpm.psc.gov.
Note: Grant expenditures must also be reported on Form 13424-L, Statement of Grant Expenditures.
Note: For purposes of the LITC Program, the term “recipient share” has the same meaning as the term “matching
funds.”
Note: Reporting forms, including this form (SF-425), 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.

112

LOW INCOME TAXPAYER CLINIC

APPENDIX C

Specific Instructions
Information

Line 1
Federal Agency and
Organizational Element to
Which Report is Submitted

Enter Internal Revenue Service.

Line 2
Federal Grant or Other
Identifying Number
Assigned by Federal
Agency

Enter the grant award number found on your Notice of Award for grant year 2018.

Line 3
Recipient Organization

Enter the name and complete address of the recipient organization including zip code.

Line 4a
DUNS Number

Enter the recipient organization’s Data Universal Numbering System (DUNS) number.

Line 4b
EIN

Enter the recipient organization’s Employer Identification Number (EIN).

Line 5
Recipient Account Number
or Identifying Number

Enter N/A.

Line 6
Report Type

Mark Semi-Annual for the Interim Report or Annual for the Year-End Report.

Line 7
Basis of Accounting
(Cash/Accrual)

Specify whether a cash or accrual basis was used for recording transactions related to the award(s) and
for preparing this FFR. Accrual basis of accounting refers to the accounting method in which expenses
are recorded when incurred. For cash basis accounting, expenses are recorded when they are paid.

Line 8
Project/Grant Period,
From/To (Month, Day, Year)

Enter 01/01/2018 to 12/31/2018.

Line 9
Reporting Period End Date,
From: (Month, Day, Year)

Enter 06/30/2018 for the Interim Report or 12/31/2018 for the Year-End Report.

I

Item

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

LOW INCOME TAXPAYER CLINIC

113

Line 10
Transactions

Enter cumulative amounts from date of the inception of the award through the end date of the reporting
period specified in line 9. Use Lines 10a through 10o.

Federal Cash
Line 10a
Cash Receipts

Enter the amount of federal cash that the grantee has drawn down from the 2018 grant award in the
DPM account during the reporting period.

Line 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.

Line 10c
Cash On Hand
(Line 10a minus Line 10b)

Enter the amount of Line 10a minus Line 10b.
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

114

Line 10d
Total Federal funds
authorized

Enter the total amount of LITC grant funds awarded for 2018.

Line 10e
Federal share of
expenditures

Enter the amount of federal funds expended during the reporting period.

Line 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.

Line 10g
Total Federal share
(sum of Lines 10e and 10f)

Enter the sum of Lines 10e and 10f.

Line 10h
Unobligated balance
of Federal funds
(Lines 10d minus 10g)

Enter the amount of Line 10d minus Line 10g.

Cash basis reporters generally expend funds when an expense is paid; accrual basis reporters generally
expend funds when an expense is incurred.

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.

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.

LOW INCOME TAXPAYER CLINIC

APPENDIX C

Recipient Share
Enter the amount of matching funds required for grant year 2018. This amount should be the same as
Line 10d because the LITC grant requires a dollar-for-dollar match.

Line 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.

Line 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.

I

Line 10i
Total recipient share
required

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Program Income
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 cost sharing
amount included in Line 10j.

Line 10m
Program income expended
in accordance with the
deduction alternative

Enter 0.

Line 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.

Line 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.

Line 11
Indirect Expense

Only grantees using an indirect cost rate should complete this section. Enter cumulative amounts from
date of the inception of the award through the end date of the reporting period specified on line 9.
Otherwise, skip to line 12.

Line 11a
Type of rate

State whether indirect cost rate is Provisional, Predetermined, Final, Fixed, or de minimis.

Line 11b
Rate

Enter the indirect cost rate in effect during the reporting period.

Line 11c
Period From; Period To

Enter the beginning and ending effective dates for the rate.

Line 11d
Base

Enter the amount of the base against which the rate(s) was applied.

Line 11e
Amount Charged

Enter the amount of indirect costs charged during the time period specified. (Multiply 11b. x 11d.)

Line 11f
Federal Share

Enter the amount of grant funds awarded for the reporting period which were allocated to indirect costs.

Line 11g
Totals

Enter the totals for columns 11d, 11e, and 11f.

VII

Line 10l
Total Federal program
income earned

VIII II
III
IV
V
VI
APPENDIX
CVII
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

115

116

Line 12
Remarks

If needed, enter “See attached statement” and attach additional pages containing explanations or
additional information.

Line 13
Certification

Enter the title, contact information, and signature of the authorized certifying official on line 13.

LOW INCOME TAXPAYER CLINIC

APPENDIX C

I

II

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI
VII

VIII II

III

IV

V

VI
APPENDIX
CVII
VIII

APPENDICES

GLOSSARY
INDEX

117

LOW INCOME TAXPAYER CLINIC

Form 13424-L
(Arpil 2016)

Department of the Treasury - Internal Revenue Service

OMB Number
1545-1648

Statement of Grant Expenditures
Grant Period

ABC Legal Services LITC

From

EXAMPLE

Name of Low Income Taxpayer Clinic
Expense Categories

Federal

01/01/2018

Match

To

12/31/2018
Total

80,355

35,000

115,355

B. Fringe Benefits

1,525

21,546

23,071

C. Travel

1,000

1,287

2,287

D. Equipment

0

0

0

E. Supplies

0

1,856

1,856

F. Contractual

0

11,590

11,590

0

29,522

29,522

82,880

100,801

183,681

A. Personnel

G. Construction

H. Other Expenses

I. Total Direct Charges
J. Indirect Charges
K. Totals

Catalog Number 58506B

7,120
90,000

www.irs.gov
For Paperwork Reduction Act Notice, see Publication 3319.

118

LOW INCOME TAXPAYER CLINIC

7,120
100,801

190,801

Form 13424-L (Rev. 4-2016)

APPENDIX C

Page 2

Grant Expenditures Narrative Explanations
I

A. Personnel
Note: ABC Legal Services computes a 1.0 FTE based on a 40-hour work week (2,080 hours per year).

II

EXAMPLE

Clinic Director/QTE – John Fordham, Attorney - .80 FTE Annual Salary $89,000 x 0.80 = $71,200. Source of funds expended: $50,000 paid from
federal funds, $20,000 paid from Legal Service Corporation (LSC), and $1,200 paid from private contributions.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Paralegal – Alice Gonzaga - .43 FTE - $22.00/hr x 900 hrs = $19,800. Source of funds expended: $10,000 paid from federal funds and $9,800 paid
from XYZ Private Foundation funds.
Intake – Ruth Washington - .46 FTE - $15.00/hr x 957 hrs = $14,355. Source of funds expended: $14,355 paid from federal funds.

Receptionist – Debra Chapman – .33 FTE – Annual Salary $30,000 x 0.33 = $10,000. Debra provided administrative and clerical support to 3
programs including the LITC program. Her time was allocated as 1/3 to each program. Source of funds expended: $6,000 paid from federal funds
and $4,000 paid from private cash contributions.
B. Fringe Benefits
Fringe benefits are calculated as 20% of wages, $115,355 x .20 = $23,071.
Fringe benefits represent the cost of Social Security and Medicare taxes, State Unemployment taxes, health insurance premiums, life insurance, and
employer pension plan contribution.
Source of funds expended: $1,525 paid from federal funds and $21,546 paid from XYZ Private Foundation funds.

VII
VIII II

C. Travel
$1,915 for Clinic Director John Fordham to attend the LITC Conference.
Local travel to conduct educational and outreach activities. $45 parking and $327 mileage (611 miles at $.535 per mile).
Source of funds expended: $1,000 paid from federal funds and $1,287 paid from XYZ Private Foundation funds.

III
IV

D. Equipment
N/A

V
VIII
APPENDICES

Total cost expended on supplies for the organization was $37,112 and included the cost of laptop computers, printers, copy paper, toner, pens,
pencils, envelopes, postage, etc.
$37,112 x 5.0% = $1,856.
Source of funds expended: $1,856 from XYZ Private Foundation funds.

GLOSSARY
INDEX

F. Contractual
Rent - Facilities costs are generally included in the Indirect Cost Rate Agreement. However, the organization rented off-site space at Neighborhood
Drop-In, a community based organization, solely to conduct weekly intake. The cost of the space was $500 per month.
$500/mo x 12 mos = $6,000.
Source of funds expended: $6,000 XYZ Private Foundation funds.
Telephone and Internet – These costs are shared expenses and are charged to the LITC using the FTE allocation methodology explained above.
The organization's total telephone and internet cost was $36,020.
$36,020 x 5.0% = $1,801.
Catalog Number 58506B

www.irs.gov

Form 13424-L (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

VI
APPENDIX
CVII

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 was 2.02 FTEs (.80 FTE for John
Fordham + .43 FTE for Alice Gonzaga + .46 FTE for Ruth Washington + .33 FTE for Debra Chapman = 2.02 FTEs). Total FTEs in the ABC Legal
Services organization is 40 FTEs. The ratio of shared expenses is 5.0% (2.02 / 40).

119

Page 3

Source of funds expended: $1,801 XYZ Private Foundation funds.

EXAMPLE

2 CFR § 200.501 Audit – This cost is a shared expense and is charged to the LITC using the FTE allocation methodology explained above.
The organization's total A-133 audit cost was $21,000.
$21,000 x 5.0% = $1,050.
Source of funds expended: $1,050 private cash contributions.
Advertising costs – These costs were incurred solely to publicize the LITC program and were not a shared expense.
Advertising for LITC representation and education services costs were $2,739.
• Source of funds expended: $2,739 private cash contributions.
G. Construction

H. Other Expenses
Third-party in-kind contributions:

Representation services: $200/hr x 103 hrs = $20,600.
Non-representation services:
Volunteer attorneys contributed services including research, consultations, and review of educational materials. Valuation rate is the same as pay
rate for staff attorney John Fordham. ($43.27/hr + $8.65/hr fringe) = $51.92/hr x 111 hrs = $5,763.
A bilingual Enrolled Agent provided 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 80 hrs = $2,160.
Law students assisted by representing taxpayers before the IRS pursuant to a special appearance authorization. Valuation rate is $18.17/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.) $18.17/hr x 55/hrs = $999.
I. Total Direct Charges

J. Indirect Costs
The organization has an approved Indirect Cost Rate Agreement of 20% of direct salaries. However, the organization has agreed to charge the LITC
program a reduced rate of 10%.
• $77,642 x 10% = $7,764.

Matching Funds
• Total matching funds were $100,801 from the following sources:
• $20,000 cash from Legal Services Corporation funding.
• $42,290 cash from XYZ Private Foundation.
• $8,989 cash from private contributions.
• $29,522 third-party in-kind contributions of services donated by volunteers.

Unused Grant Funds
None

Catalog Number 58506B

120

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-L (Rev. 4-2016)

APPENDIX C

Page 4

Additional Funding Request (Interim Report ONLY)
Year-End report. N/A

I
II

EXAMPLE

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

Catalog Number 58506B

www.irs.gov

Form 13424-L (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

121

Page 4

Instructions for Form 13424-L, Statement of Grant Expenditures
Purpose
This form 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 SF 425.

Reporting Requirements
All clinics must complete this form. See Publication 3319 for additional
information.

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 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.

Specific Instructions

3. 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.
4. Determine and list out the dollar amount attributable to federal
and match.
5. List sources of match.

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.
1. Show the formula (methodology) for calculating fringe benefits for
each position listed in Category A.
2. State what items are included in fringe benefits.
3. Provide the dollar amount attributable to federal and match.

Important:

4. Source of matching funds

1. Each letter of the Grant Expenditures Narrative corresponds to an
expense category in the Statement of Grant Expenditures. The
information provided in the narrative should be sufficiently detailed
so that a reviewer can arrive at the same amounts listed on the
Statement of Grant Expenditures by expense and by category
(federal or match).
2. 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.
3. 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.

A. Personnel
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.
1. State the Full-Time Equivalent (FTE). List number of hours worked
by a full-time employee in a single week. Determine the number of
FTE hours in the reporting period (Number of weeks in period
multiplied by hours worked by a full-time employee in one week
(e.g., 26 weeks x 37.5=975 hours)).
2. Calculate the FTE for each clinic employee. Determine each
clinic staff member’s full-time equivalent. 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.

Catalog Number 58506B

122

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.

LOW INCOME TAXPAYER CLINIC

www.irs.gov

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 the
travel costs listed, whether the costs were paid with federal or matching
funds, and the source of the matching funds. If using a mileage rate, show
the computation.

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. 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.

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:
• The value of supplies used;
• Whether the associated costs were paid using federal or matching
funds; and
• 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.

Form 13424-L (Rev. 4-2017)

APPENDIX C

Page 5

• Nature of the expense;
• Whether the associated costs were paid using federal or matching
funds; and
• 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:
1. Indirect Cost Rate Agreement
a. Must be approved in advance;
b. Agreement must set forth cost items included in the rate; and
c. The clinic may not charge items included in the rate as separate
expense items.
a. Rules are set forth in 2 CFR Part 200;

Not applicable to this grant. No expenses are allowed.

• The type of expense;
• Whether the cost was paid using federal or matching funds; and
• Source of the matching funds.

The total of the direct charges is the sum of lines A through H for each
column.

www.irs.gov

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. The total funds requested for the grant
year may not exceed $100,000. See IRC § 7526(c)(2).
Hint: 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
Statement of Grant Expenditures.
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.

GLOSSARY
INDEX

Catalog Number 58506B

Additional Funding Request (Interim Report ONLY)

APPENDICES

I. Total Direct Charges

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 onetime occurrence or an ongoing issue.

VIII

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. See Publication 3319 for more information.

Complete this section for the Interim Report 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.

VI
APPENDIX
CVII

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 inkind services is included in this category as matching
funds. The explanation should identify:

2. List total of all Match Funding

Unused Grant Funds

V

H. Other Expenses

1. List Amount of Match by Source

IV

G. Construction

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.

III

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 10 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.

Matching Funds

VIII II

b. Clinics that elect to use the de minimis rate are prohibited from
charging administrative or facility costs as separate expense
items.

Note: 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 10% de minimis rate to charge indirect costs on all of 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.

VII

2. De Minimis 10 percent rate

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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.

II

J. Indirect Charges

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:

I

F. Contractual

Form 13424-L (Rev. 4-2017)

LOW INCOME TAXPAYER CLINIC

123

Form 13424-N
(April 2016)

Department of the Treasury - Internal Revenue Service

Low Income Taxpayer Clinic (LITC)
Program Narrative Report

Name of clinic

OMB Number
1545-1648
Grant year

Reporting period
Interim report – January 1 through June 30

Year-End report – January 1 through December 31

A response is required for each narrative item. If an item is not applicable, state “N/A.” Please limit responses to activities conducted
during the reporting period indicated above. Year-End reports may contain internal references to Interim reports of the same grant year.
1. Program plan progress
Provide a detailed explanation of the progress made in implementing the program plan during the reporting period. The explanation
must address the following:
i. Describe the progress in meeting the proposed goals (including numeric goals) and objectives and the efforts taken to achieve
those results.

ii. Describe any impediments to meeting established goals and objectives, and efforts made to overcome them. Order the
impediments from most to least significant.

2. Grant requirements
Provide information about the following items:
i. Describe any changes in LITC staff or how staff is deployed, if applicable.

ii. Describe the training provided to clinic staff, students, and volunteers. Include the topics covered during training, the number of
training hours, and the training provider.

iii. Describe any mentoring or networking activities conducted. Identify who is being mentored and the frequency of mentoring
meetings.

iv. Describe the outreach activities reported on Form 13424-A, line 1d. Identify the intended audience, and include a description of
types of outreach activities, including whether each activity was a one-time or ongoing effort.

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Form 13424-N (Rev. 4-2016)

APPENDIX C

Page 2

v. Describe the types of issues and questions addressed in the technical assistance consultations reported on Form 13424-A, line 7.

I
II

vi. Describe the reasons for seeking assistance from the Taxpayer Advocate Service (TAS) and the assistance TAS provided in
cases reported on Form 13424-A, line 8.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

vii. Explain the circumstances surrounding the representation of taxpayers whose amount in controversy exceeds $50,000 as
reported on Form 13424-K, line 3. Include the issues creating the tax controversy and an explanation of why an exception was
made to the general amount in controversy limitation.

viii. List any changes in days or hours of operation, if applicable.

VII
VIII II

ix. Describe any advocacy efforts or other activities, not described previously, through which the clinic contributed to ensuring the
fairness and integrity of the tax system with regard to low income or ESL taxpayers.

III
IV

3. Emerging issues

V

Briefly describe any frequently encountered or ongoing trends identified through the clinic’s work on behalf of low income or ESL
taxpayers during the reporting period. Order the issues from most to least significant. Do not include specific taxpayer identifying
information.

VI
APPENDIX
CVII

4. Success Stories
Briefly describe any relevant success stories. These may include stories about a particular case or activity; however, do not include
specific taxpayer identifying information.

VIII
APPENDICES

5. Last year in LITC Program (Year-End reports only)
If the grantee will not be continuing in the LITC Program for the upcoming grant year, please detail the steps taken to resolve any open
cases or obtain new representation for current clients.

GLOSSARY
INDEX

Catalog Number 62951W

www.irs.gov

Form 13424-N (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

125

Page 3

Instructions for Form 13424-N, Low Income Taxpayer Clinic (LITC) Program Narrative Report
Note: Interim and Year-End Reports, including this form (Form 13424-N), 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.

Purpose

This form 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.
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
English as a Second Language (ESL) taxpayers. Please be careful to follow the instructions for this form and to report all information
completely and accurately.

Reporting Requirements
All clinics must complete this form. See Publication 3319 for additional information.
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
in which a grant award is received. 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, the period from January 1 through
December 31. Check the appropriate box at the beginning of the form indicating for which period the report is being completed.

Specific Instructions
Program Plan Progress
Report the progress made in implementing the program plan during the reporting period in this section. Include the a 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.
Note: Responses in the Interim Report should not be repeated in the Year-End Report without providing additional information about
activities in the second half of the reporting period.
Grant Requirements
Report how certain requirements of the LITC grant are fulfilled in this section. 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
Note: Responses in the Interim Report should not be repeated in the Year-End Report without providing additional information about
activities in the second half of the reporting period.
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. Do not include any confidential or personally identifiable taxpayer information. See
Publication 3319 for additional information about confidentiality.
Note: Responses in the Interim Report should not be repeated in the Year-End Report without providing additional information about
activities in the second half of the reporting period.
Success Stories
Report notable stories of achievement of the LITC mission that occurred during the reporting period in this section. 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.
Note: For purposes of reporting Success Stories on this form (Form 13424-N), 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.
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.
Catalog Number 62951W

126

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-N (Rev. 4-2016)

APPENDIX C

Department of the Treasury - Internal Revenue Service

Form 13424-A

Low Income Taxpayer Clinic (LITC)
General Information Report

(April 2016)

OMB Number
1545-1648

Reporting Period

Grant year
Interim Report - January 1 through June 30

I

Name of clinic

Year-End Report - January 1 through December 31

II

Outreach Activities
1

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

For a definition of Outreach Activities, see form instructions.
A. Number of outreach activities conducted for ESL taxpayers
B. Number of outreach activities conducted for non-ESL taxpayers (do not include activities reported on
line A above)
C. Number of outreach activities conducted for other organizations that serve ESL or low income taxpayers
(do not include activities reported on line A or B above)
D. Total outreach activities (add lines 1A through 1C)

Educational Activities
For a definition of Educational Activities, see form instructions.
2

A. Number of educational activities conducted for ESL taxpayers

VII

B. Number of educational activities conducted for non-ESL taxpayers (do not include activities reported on
line A above)
C. Number of educational activities conducted for other organizations that serve ESL or low income
taxpayers (do not include activities reported on line A or B above)

VIII II

D. Total number of educational activities (add lines 2A through 2C)
3

A. For the educational activities reported on line 2A, enter the total number of attendees
B. For the educational activities reported on line 2B, enter the total number of attendees

III

C. For the educational activities reported on line 2C, enter the total number of attendees
D. Total number of attendees at educational activities (add lines 3A through 3C)
List the topics that were covered during the educational activities reported on line 2. Do not repeat topics on multiple lines.
H.

B.

I.

C.

J.

D.

K.

E.

L.

F.

M.

G.

N.

V

A.

IV

4

VI
APPENDIX
CVII
VIII
APPENDICES

5

List the languages, other than English, in which educational activities were conducted
E.

B.

F.

C.

G.

D.

H.

Catalog Number 53040U
For Paperwork Reduction Act Notice, see Publication 3319.

www.irs.gov

GLOSSARY
INDEX

A.

Form 13424-A (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

127

Page 2
Name of clinic

Consultations
For a definition of Consultation, see form instructions.
6

A. Number of consultations conducted with ESL taxpayers
B. Number of consultations conducted with non-ESL taxpayers
C. Total number of consultations (add lines 6A and 6B)

7

Number of technical assistance consultations conducted

TAS Assistance
8

Number of cases from Form 13424-K, line 1C where TAS provided assistance

Tax Returns and Other Documents
9

A. Number of tax returns prepared ancillary to ESL activities
B. Number of tax returns prepared to resolve a controversy
C. Total number of tax returns prepared (add lines 9A and 9B)

10

Number of Individual Taxpayer Identification Number (ITIN) applications prepared

Volunteer Activities
11

Does the organization have a pro bono panel

12

Number of volunteers that provided service to the clinic during the reporting period who are:

Yes

No

A. Attorneys
B. Certified Public Accountants
C. Enrolled Agents
D. Interpreters / Translators
E. Students
F. Others
G. Total number of volunteers (add lines 12A through 12F)
13

Total number of hours of service provided by volunteers

Student Representation
14

Number of students authorized to practice before the IRS

15

Number of students receiving academic credit for clinic work

Professional Education Activities
16

Number of professional education (CPE or CLE) credits available through presentations conducted
during the reporting period

17

List the topics covered during CPE or CLE presentations. Do not repeat topics on multiple lines.
A.

F.

B.

G.

C.

H.

D.

I.

E.

J.

Catalog Number 53040U

128

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-A (Rev. 4-2016)

APPENDIX C

Page 3

Instructions for Form 13424-A, Low Income Taxpayer Clinic (LITC) General Information Report

I

Note: Interim and Year-End Reports, including this form (Form 13424-A), 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.

Purpose
II

This form 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.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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
English as a Second Language (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.

Reporting Requirements
All clinics must complete this form. See Publication 3319 for additional information.

Reporting Period

VII

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 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, the period from January 1 through
December 31. Check the appropriate box at the beginning of the form indicating for which period the report is being completed.

VIII II

Specific Instructions
Outreach Activities

III

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.

IV

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.

V

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.

VI
APPENDIX
CVII

Note: A single outreach activity may span multiple days. For example, if a clinic staffs a booth for multiple days at a week-long event,
that should be counted as one outreach activity. Additional details about the extent of such efforts can be included in the program
narrative.
Note: A campaign that involves sending the same or similar letters to multiple recipients should be counted as a single outreach
activity.

VIII

Line 1A. Report on this line the number of outreach activities conducted for ESL taxpayers.
Line 1B. Report on this line the number of outreach activities conducted for non-ESL taxpayers.

APPENDICES

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.

Catalog Number 53040U

www.irs.gov

GLOSSARY
INDEX

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 Form
13424-N, line 2.iv. See Publication 3319 for additional information.

Form 13424-A (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

129

Page 4

Educational Activities
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.
In order 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 earned income tax credit (EITC) eligibility rules that they can share with their clients.
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.
Note: 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, Part II, Published Materials.
Line 2A. Report on this line the number of educational activities conducted for ESL taxpayers.
Line 2B. Report on this line the number of educational activities conducted for non-ESL taxpayers.
Line 2C. Report on this line the number of educational activities conducted for other organizations that assist ESL or low income
taxpayers.
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.
Line 3A. Report on this line the total number of attendees at all educational activities conducted for ESL taxpayers during the reporting
period.
Line 3B. Report on this line the total number of attendees at all educational activities conducted for non-ESL taxpayers during the
reporting period.
Line 3C. Report on this line the total number of attendees at all educational activities conducted for service providers during the
reporting period.
Line 3D. Report on this line the total number of attendees at all educational activities conducted during the reporting period. The
number reported on this line should equal the total of lines 3A, 3B, and 3C.
Line 4. List the topics that were covered during the educational activities reported on lines 2A through 2C. Report each topic on a
separate line. Do not repeat the same topic on multiple lines. If a topic was presented at multiple events, you may list the number of
times the topic was presented. For example, you may enter “EITC x 4” to indicate you held four presentations on the Earned Income
Tax Credit during the reporting period.
Line 5. List the languages, other than English, in which educational activities were conducted. Report each language on a separate
line.

Consultations
Report all consultations conducted during the reporting period in this section. 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, Case Information. 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.
Line 6A. Report on this line the number of consultations conducted with ESL taxpayers.
Line 6B. Report on this line the number of consultations conducted with non-ESL taxpayers.
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.
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.

Catalog Number 53040U

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www.irs.gov

Form 13424-A (Rev. 4-2016)

APPENDIX C

Page 5

Referrals

I

Line 8. Report on this line the number of cases reported on Form 13424-K, line 1C, for which the Taxpayer Advocate Service (TAS)
provided assistance during the reporting period. 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
II

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. 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).

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.
Line 9B. Report on this line the number of tax returns prepared to resolve a controversy.
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.
Line 10. Report on this line the number of Individual Taxpayer Identification Number (ITIN) applications (Form W-7) prepared during the
reporting period.

VII

Volunteer Activities

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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.

Line 11. Check the appropriate box to indicate whether the clinic maintains a pro bono panel to which taxpayers can be referred for
controversy representation.
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.

VIII II

Line 12G. Report on this line the total number of volunteers. The number reported on this line should equal the total of lines 12A
through 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.

III
IV
V

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 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
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.
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.

VIII

Professional Education Activities

Note: Report only professional education activities dealing with issues affecting low income or ESL taxpayers.
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.

www.irs.gov

Form 13424-A (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

131

GLOSSARY
INDEX

Line 17. Report the topics covered during CPE or CLE presentations. Report each topic on a separate line. 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 Earned Income Tax Credit during the
reporting period.

APPENDICES

Report on accredited Continuing Professional Education (CPE) or Continuing Legal Education (CLE) presentations conducted during
the reporting period in this section.

Catalog Number 53040U

VI
APPENDIX
CVII

Note: The total number of volunteer hours reported on line 13 should be the same as the total number of volunteer hours valued as
matching funds on Form 13424-L, Statement of Grant Expenditures.

Department of the Treasury - Internal Revenue Service

Form 13424-K

OMB Number
1545-1648

Low Income Taxpayer Clinic (LITC)
Case Information Report

(April 2016)

Name of clinic
Reporting Period

Grant year
Interim Report - January 1 through June 30

Year-End Report - January 1 through December 31

Case Inventory
1

A. Beginning case inventory (the number of cases that were worked in the previous year that remained
open as of the first day of the reporting period)
B. New cases opened during the reporting period
C. Total number of cases worked during the reporting period (add lines 1A and 1B)
D. Cases closed during the reporting period
E. Ending case inventory (the number of cases that remained open as of the last day of the reporting
period (subtract line 1D from line 1C))

Cases Worked
2

For the cases reported on line 1C, indicate the IRS function or U.S. court where the controversy is being addressed as of the last
day of the reporting period. If the case was closed during the period, indicate the IRS function or U.S. court where the case was
handled immediately before closing. Each case should be counted only once per reporting period.
Accounts Management
A. Return Processing
B. Penalty Abatement
C. Injured Spouse
D. Backup Withholding
Exams
E. Correspondence Exam
F. Office or Field Exam
G. Automated Underreporter (AUR)
H. Automated Substitute-for-Return (ASFR)
I. Audit Reconsideration
Collection
J. Automated Collection System (ACS)
K. Field Collection (RO)
L. Offer-In-Compromise (OIC)
M. Lien Unit
N. Bankruptcy
Appeals
O. Exam Appeals
P. Collection Due Process (CDP)
Q. Collection Appeals Process (CAP)
R. OIC Appeals
S. Penalty Abatement Appeals
T. Other Appeals
Litigation
U. U.S. Tax Court
V. Other Federal Courts
Miscellaneous
W. Identity Protection Specialized Unit (IPSU)
X. Innocent Spouse Unit
Y. SS-8 Unit
Z. ITIN Unit
AA. Trust Fund Recovery Penalty

TOTAL (add items 2A through 2AA) (Must equal value in line 1C)
Catalog Number 58507M
For Paperwork Reduction Act Notice, see Publication 3319.

132

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-K (Rev. 4-2016)

APPENDIX C

Page 2
Name of clinic

Additional Case Information
I

For the cases reported on line 1B, indicate the number of cases where:
The amount in controversy exceeds $50,000 per tax period.
(for cases reported on line 3, include an explanation for each in the Program Narrative, Item 2.vii)

4

The taxpayer’s income exceeds 250% of the federal poverty guidelines

II

3

5

Matters worked in more than one IRS function or U.S. court

6

More than one tax year

7

Representation of ESL taxpayers

8

Joint representation of taxpayers

9

Representation by volunteers

10

State tax matters

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

For the cases reported on line 1C, indicate the number of cases involving:

U.S. Tax Court Activities
11

Does the clinic participate in the U.S. Tax Court Clinical Program

Yes

No

List the place(s) of trial location served:

C.

D.

E.

F.

VIII II

B.

VII

A.

13

Number of U.S. Tax Court cases worked during the reporting period in which the clinic represented the
taxpayer, but no appearance was entered

14

Number of informal consultations in the U.S. Tax Court during the reporting period in which the clinic
provided advice to a taxpayer, but not representation

IV

Number of U.S. Tax Court cases worked during the reporting period in which an appearance was entered
pursuant to Tax Court Rule 24

III

12

V

Closed Case Outcomes

VI
APPENDIX
CVII

15

For the cases reported on line 1D, indicate the:
A. Number of cases in which the taxpayer was brought into filing compliance
B. Number of cases in which the taxpayer was brought into collection compliance
C. Total amount of dollars refunded in cash to taxpayers
D. Total decrease in corrected tax liabilities, penalties, and interest (but not below zero for any taxpayer)

VIII
APPENDICES
GLOSSARY
INDEX

Catalog Number 58507M

www.irs.gov

Form 13424-K (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

133

Page 3

Instructions for Form 13424-K, Low Income Taxpayer Clinic (LITC) Case Information Report
Note: Interim and Year-End Reports, including this form (Form 13424-K), 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.

Purpose
This form 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 (Form 13424-K), 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
English as a Second Language (ESL) taxpayers. Please be careful to follow the instructions for this form and to report all information
completely and accurately.

Reporting Requirements
All clinics must complete this form. See Publication 3319 for additional information.
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
in which a grant award is received. 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, the period from January 1 through
December 31. Check the appropriate box at the beginning of the form indicating for which period the report is being completed.
Reporting Case Activities
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 IRC §§ 7431 – 7435.
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 Federal a 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 (Form 13424-K) each period until the case is closed.
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 to 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) of this form 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.
Case Inventory
Report in this section the volume of case inventory.
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.)
Line 1B. Report on this line the number of new cases that were opened during the reporting period.
Line 1C. Report on this line the total number of cases worked during the reporting period. The number reported on this line should
equal the total of lines 1A and 1B.
Line 1D. Report on this line the number of cases closed during the reporting period.
Line 1E. Report on this line the number of cases that remained open at the end of the reporting period. The number reported on this
line is the result of line 1D subtracted from line 1C.

Catalog Number 58507M

134

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-K (Rev. 4-2016)

APPENDIX C

Page 4
Cases Worked
Report in this section the IRS function or Federal court where cases are being worked.

I

Lines 2A-AA. 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 on lines 2A through 2AA must equal the total
number of cases worked during the reporting period as reported on line 1C.

II
I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Example 1: Clinic A is representing a taxpayer in a dispute involving a proposed deficiency. On May 15, Clinic A submitted
correspondence to the IRS's examination 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 United States 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 Tax Court as of December 31.
Example 2: Clinic B is representing a taxpayer in a dispute involving eligibility for the earned income tax credit (EITC) for two tax years.
At the close of the reporting period, one tax year is being addressed in the United States Tax Court and the other tax year is being
addressed by IRS Examination 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

VII

Report in this section additional information about cases worked during the reporting period.

VIII II

Note: Lines 3 and 4 relate to new cases opened during the reporting period, as reported on line 1B. Lines 5 through 8 apply to all cases
worked during the reporting period, as reported on line 1C.

III

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.
Line 4. Report on this line the number of new cases opened during the reporting period for taxpayers whose income exceeds 250% of
federal poverty guidelines.

IV

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.

V

Example 1: 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
offer-in-compromise (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
APPENDIX
CVII

Example 2: 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 United States Tax Court and the other tax year is being addressed by IRS
Examination 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.

VIII

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.
Line 7. Report on this line the number of cases worked during the reporting period in which the clinic represented an ESL taxpayer.

APPENDICES

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.
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.

Catalog Number 58507M

www.irs.gov

GLOSSARY
INDEX

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.

Form 13424-K (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

135

Page 5
U.S. Tax Court Activities
Line 11. Check the appropriate box to indicate whether the clinic participates in the United States Tax Court Clinical Program. If the box
is checked indicating Yes, list the “place of trial” city or cities served. Report each place of trial location on a separate line.
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 United States Tax Court, whether through filing an entry of appearance or via a petition submitted by the clinic.
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
United States 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 United States 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.
Line 14. Report on this line the number of informal consultations conducted with taxpayers in the United States 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 United States 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.
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.
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 in order
to resolve a collection matter can be included here.
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 offer-in-compromise can be included here.
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. 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.
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. 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 offer-incompromise, 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.
Example 1: 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.

Catalog Number 58507M

136

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-K (Rev. 4-2016)

APPENDIX C

Department of the Treasury - Internal Revenue Service

Form 13424-B

Low Income Taxpayer Clinic (LITC)
Case Issues Report

(April 2016)

Reporting Period

Grant year
Interim Report - January 1 through June 30

I

Name of clinic

OMB Number
1545-1648

Year-End Report - January 1 through December 31

Case Issues Worked

3

Business Income (Schedule C)

4

Capital Gain or Loss (Schedule D)

5

IRA / Pension

6

Social Security Benefits

7

Alimony

8

Rental, Royalty, Partnership, S Corp (Schedule E)

9

Farming Income (Schedule F)

10

Unemployment

11

Gambling Winnings

12

Cancellation of Debt

13

Settlement Proceeds

14

Other

VIII II

Interest / Dividends (Schedule B)

VII

Wages

2

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

1

II

Income Issues

Deduction Issues
16

Education Expenses (Including student loan interest)

17

Moving Expenses

18

IRA Deduction

19

Medical and Dental Expenses

20

State and Local Taxes

21

Home Mortgage Interest

22

Other Interest Expenses

23

Charitable Contributions

24

Casualty and Theft Losses

25

Unreimbursed Employee Business Expenses

26

Other Itemized Deductions

27

Business Expenses (Schedule C)

IV

Alimony

III

15

V
VI
APPENDIX
CVII
VIII

Credit Issues
29

Education Credits

30

Child Tax Credit / Additional Child Tax Credit

31

Earned Income Tax Credit

32

First-Time Homebuyer Credit

33

Premium Tax Credit

34

Other Credits

Catalog Number 53041F

GLOSSARY
INDEX

Child and Dependent Care Credit

APPENDICES

28

www.irs.gov

Form 13424-B (Rev. 4-2016)

For Paperwork Reduction Act Notice, see Publication 3319.

LOW INCOME TAXPAYER CLINIC

137

Page 2
Name of clinic

Case Issues Worked (continued)
Status Issues
35

SSN / TIN

36

ITIN

37

Filing Status

38

Personal/Dependency Exemptions

39

Injured Spouse

40

Innocent Spouse

41

Employment-Related Identity Theft

42

Refund-Related Identity Theft

43

Nonfiler

44

Worker Classification

Tax / Refund / Return / Statute of Limitations Issues
45

Self-Employment Tax

46

Suspected Return Preparer Fraud

47

Estimated Tax Payments

48

Withholdings

49

Refund

50

Assessment Statute of Limitations

51

Collection Statute of Limitations

52

Refund Statute of Limitations

Penalty and Addition to Tax Issues
53

Trust Fund Recovery Penalty

54

Other Civil Penalties

55

Additional Tax on Distributions from Qualified Retirement Plans

56

Individual Shared Responsibility Payment

Collection Issues
57

Payments

58

Installment Payment Agreement (IPA)

59

Offer-In-Compromise (OIC)

60

Currently Not Collectible (CNC)

61

Liens

62

Levies (Including Federal Payment Levy Program)

Total Case Issues Worked (add lines 1 through 62)
The total number of case issues should be greater than or equal to the number
reported on Form 13424-K, Low Income Taxpayer Clinic (LITC) Case Information
Report, line 1C

Catalog Number 53041F

138

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-B (Rev. 4-2016)

APPENDIX C

Page 3

Instructions for Form 13424-B, Low Income Taxpayer Clinic (LITC) Case Issues Report
I

Note: Interim and Year-End Reports, including this form (Form 13424-B), 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.

II

Purpose

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

This form 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 taxpayers who are low income and English as a
Second Language (ESL). Be careful to follow the instructions for this form and to report all information completely and accurately.

Reporting Requirements
All clinics must complete this form. See Publication 3319 for additional information.

Reporting period

VII

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 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, the period from January 1 through
December 31. Check the appropriate box at the beginning of the form indicating for which period the report is being completed.

Reporting Case Issues

VIII II

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 IRC §§ 7431 – 7435.

III
IV

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.

V

Examples

VI
APPENDIX
CVII

Example 1: Clinic A represented ten taxpayers in Earned Income Tax Credit (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.
Example 2: 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.

VIII

Example 3: 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 offerin-comprise. 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 offer-in-compromise discussion would not be counted as an issue and reported on
line 59 because Clinic C did not prepare or submit to the IRS an offer-in-compromise on behalf of the taxpayer.

APPENDICES
GLOSSARY
INDEX

Catalog Number 53041F

www.irs.gov

Form 13424-B (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

139

Page 4

Specific Instructions
Income Issues
Lines 1 through 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.

Deduction Issues
Lines 15 through 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 allowability of a deduction for alimony would
be reported on line 15, Alimony.

Credit Issues
Lines 28 through 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 through 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
Lines 45 through 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
Lines 53 through 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.

Collection Issues
Lines 57 through 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.

Catalog Number 53041F

140

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-B (Rev. 4-2016)

APPENDIX C

Department of the Treasury - Internal Revenue Service

Form 13424-C

OMB Number
1545-1648

Low Income Taxpayer Clinic (LITC)
Advocacy Information Report

(April 2016)

Grant year

I

Name of clinic

Part I. Systemic Advocacy Submissions

Submitter

Date submitted

Submitter

Date submitted

Submitter

Date submitted

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

Issue number

II

Complete this section to list systemic issues related to low income or ESL taxpayers submitted during the reporting period to the
Systemic Advocacy Management System (SAMS) https://www.irs.gov/Advocate/Systemic-Advocacy-Management-System-SAMS

Brief description of the issue

Issue number
Brief description of the issue

Issue number

VII

Brief description of the issue

VIII II

Part II. Published Materials

Format

Book

Law review

Magazine

Newspaper

Website

III

Complete this section to list written materials published during the reporting period to educate low income or ESL taxpayers about tax
issues or to bring awareness to the public about the LITC program or tax issues that affect low income or ESL taxpayers.
Other

Date published

Title of article

Publication or website

IV

Author's name

Book

Law review

Magazine

Newspaper

Website

VI
APPENDIX
CVII

Format

V

Brief description of the article

Other

Author's name

Date published

Title of article

Publication or website

Book

Law review

Magazine

Newspaper

Website

Other

Author's name

Date published

Title of article

Publication or website

APPENDICES

Format

VIII

Brief description of the article

Catalog Number 54942J
For Paperwork Reduction Act Notice, see Publication 3319.

GLOSSARY
INDEX

Brief description of the article

www.irs.gov

Form 13424-C (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

141

Page 2

Part III. Television and Radio Appearances
Complete this section to list television and radio appearances made during the reporting period to educate low income or ESL
taxpayers about tax issues or to bring awareness to the public about the LITC program or tax issues that affect low income or ESL
taxpayers.
Airing dates of segment

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Airing dates of segment

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Airing dates of segment

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Part IV. Public Service Announcements
Complete this section to list public service announcements aired during the reporting period to educate low income or ESL taxpayers
about tax issues or to bring awareness to the public about the LITC program or tax issues that affect low income or ESL taxpayers.
Number of times segment aired

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Number of times segment aired

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Number of times segment aired

Number of potential listeners or viewers

Discussion topic

Presenter

Brief description of the topic

Catalog Number 54942J

142

LOW INCOME TAXPAYER CLINIC

www.irs.gov

Form 13424-C (Rev. 4-2016)

APPENDIX C

Page 3

Instructions for Form 13424-C, Low Income Taxpayer Clinic (LITC) Advocacy Information Report

I

Note: Interim and Year-End Reports, including this form (Form 13424-C), 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.

Purpose

II

This form 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.

I. LITC
III PROGRAM
IV
OVERVIEW
V
VI

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
English as a Second Language (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.

Reporting Requirements

All clinics must complete this form. See Publication 3319 for additional information.

VII

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
in which a grant award is received. 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, the period from January 1 through
December 31. Check the appropriate box at the beginning of the form indicating for which period the report is being completed.

VIII II

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

III

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).

IV
V

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. Include the posting of
educational materials to a website or the distribution of educational materials via social media. Check the appropriate box to indicate
the format of the publication. 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, line 2.ix. 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.

VI
APPENDIX
CVII
VIII

Television and Radio Appearances
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. 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. 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.

APPENDICES

Public Service Announcements
Report all public service announcements 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.

GLOSSARY
INDEX

Catalog Number 54942J

www.irs.gov

Form 13424-C (Rev. 4-2016)

LOW INCOME TAXPAYER CLINIC

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144

LOW INCOME TAXPAYER CLINIC

COMMONLY USED ACRONYMS

I

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

V

VI COMMONLY
VII
USED
VIII ACRONYMS
APPENDICES

GLOSSARY
INDEX

145

LOW INCOME TAXPAYER CLINIC

146

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

BALDU

Balance Due

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

CFP

Civil Fraud Penalty

CFR

Code of Federal Regulations

CI

Criminal Investigation

CNC

Currently Not Collectable

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

CSED

Collection Statute Expiration Date

CTC

Child Tax Credit

DPM

Division of Payment Management

DUNS

Data Universal Numbering System

EFS

Electronic Filing System

LOW INCOME TAXPAYER CLINIC

COMMONLY USED ACRONYMS

Effective Tax Administration

F&A

Facilities and Administrative Costs

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

FY

Fiscal Year

HHS

Department of Health and Human Services

IA

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-Compete 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

PII

Personally Identifiable Information

GLOSSARY
INDEX

ETA

VI COMMONLY
VII
USED
VIII ACRONYMS
APPENDICES

English as a Second Language

V

ESL

APPENDICES
III
IV

Employer Identification Number

VIIII

EIN

VI

Earned Income Tax Credit
II I. LITC III
PROGRAMIV OVERVIEW
V

Electronic Funds Transfer

EITC

I

EFT

LOW INCOME TAXPAYER CLINIC

147

148

PIN

Personal Identification Number

PMS

Payment Management System

PSP

Payroll Service Provider

PTIN

Preparer Tax Identification Number

PMS

Payment Management System

POA

Power of Attorney

PY

Processing Year

QBA

Qualified Business Administrator

QRP

Questionable Refund Program

QTE

Qualified Tax Expert

RCP

Reasonable Collection Potential

RA

Revenue Agent

RO

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

TAP

Taxpayer Advocacy Panel

TAS

Taxpayer Advocate Service

TBOR

Taxpayer Bill of Rights

TCE

Tax Counseling for the Elderly

TDA

Taxpayer Delinquent Account

TAO

Taxpayer Assistance Order

TEFRA

Tax Equity and Fiscal Responsibility Act of 1982

TE/GE

Tax Exempt & Government Entities

TIGTA

Treasury Inspector General for Tax Administration

TY

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

I

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

V

VI

VII GLOSSARY
VIII
APPENDICES

GLOSSARY
INDEX

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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
2016, the Federal Poverty Guidelines were published at 82 Fed.Reg. 8831 (Jan. 31, 2017).

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:
nnBe

necessary and reasonable for the performance of the federal award and be allocable thereto under the
applicable cost principles;

nnConform

with any limitations or exclusions set forth in the cost principles or in the Notice of Award;

nnBe

consistent with policies and procedures that apply uniformly to both federally-financed and other
activities of the grantee;

nnBe

accorded consistent treatment by the grantee;

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;

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; and

nnBe

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. 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 – a request for LITC grant funding submitted to the LITC Program Office using www.grants.gov on
the specified forms and in accordance with LITC instructions. An application is submitted by organizations not
currently receiving a grant, organizations requesting funding for a single year, or organizations whose multi-year
grant ends at the end of 2017.
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
for the LITC Program, the LITC Program Office cannot inform grantees of the amount of their funding.

150

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GLOSSARY

I

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.

II I. LITC III
PROGRAMIV OVERVIEW
V

B
Budget – a request for funds to support an activity, presented by expense category.

C
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.

VI
VIIII

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.

APPENDICES
III
IV

Clinic – see Low Income Taxpayer Clinic.

V

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)’s
office.

VI

Close Out – procedure to conclude a grant. Program Office staff must ensure all necessary reports have been
received, implemented, and documented in compliance with federal records management policy.

VII GLOSSARY
VIII
APPENDICES

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.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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.

151

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, 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
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.
Direct Costs – costs that can be identified or allocated specifically with a particular program, such as an LITC,
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.
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.

E
Educational Activities – 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. In order to
be considered an educational activity, information about a specific tax topic or topics must be conveyed to the
audience. For additional information, see Publication 3319.

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GLOSSARY

I

Employer Identification Number (EIN) – a type of Taxpayer Identification Number issued by the IRS to
identify a business entity.

II I. LITC III
PROGRAMIV OVERVIEW
V

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.
English as a Second Language (ESL) Taxpayers – ESL taxpayers are those 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.

F
VI

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, 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.

VIIII
APPENDICES
III
IV

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.

V

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.

VI
VII GLOSSARY
VIII
APPENDICES

G
Grant – financial assistance mechanism providing money, property, or both to an eligible entity to carry out an
approved project or activity.

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

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.

153

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 10 percent de minimis rate 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 (or similar
form). 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 business or other entity
is not a low income 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.
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 individuals for whom
English is a second language about their rights and responsibilities under the Internal Revenue Code. Examples of
a clinic include:
nnA

clinical program at an accredited law, business or accounting school in which students represent low
income taxpayers in controversies arising under the Internal Revenue Code; and

nnAn

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

154

LOW INCOME TAXPAYER CLINIC

GLOSSARY

I

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.

II I. LITC III
PROGRAMIV OVERVIEW
V

M
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). 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:
verifiable from the grantee’s records;

nnAre

not included as contributions for any other federally assisted project or program;

nnAre

necessary and reasonable for proper and efficient accomplishment of project or program objectives;

nnAre

allowable under the applicable cost principles;

VI

nnAre

VIIII

nnAre

not paid by the federal government under another award, except where authorized by the federal
statute to be used for cost sharing or matching;

APPENDICES
III
IV

nnAre

provided for in the approved budget when required by the federal awarding agency; and

nnConform

to other provisions of 2 CFR Part 200, when applicable.

N
V

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.

VI
VII GLOSSARY
VIII
APPENDICES

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).

LOW INCOME TAXPAYER CLINIC

GLOSSARY
INDEX

Non-Compete 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, 2017,
must submit an NCC request.

155

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 the Office of Management and Budget (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
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.
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.

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GLOSSARY

I

P

II I. LITC III
PROGRAMIV OVERVIEW
V

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.
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.
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.

VI

Program to Educate – the conduct of an activity intended to educate individuals for whom English is a
second language (ESL) about their rights and responsibilities under the Internal Revenue Code. For additional
information, see Educational Activities.

VIIII

Publicity – see Outreach Activities.

APPENDICES
III
IV

Q

V

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
demonstrate education or experience with business or program administration, such as internal controls, grant
funds management, budgeting, procurement, or the equivalent.

VI
VII GLOSSARY
VIII
APPENDICES

Qualified Representative – an attorney, certified public accountant, or enrolled agent who is authorized to
practice before the IRS. The term qualified representative also means 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). Thus, a student or law graduate working under the
supervision of a qualified representative is a qualified representative if the Director of the LITC Program Office
has authorized that student or law graduate to practice before the IRS. See Delegation Order 25-18 (Rev. 2),
IRM 1.2.52.19, Delegations of Authority for Special Topics Activities (Sept. 9, 2015). In addition, the term qualified
representative means an individual authorized to appear before the applicable court where the controversy with
the IRS will be adjudicated. 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, as such practice, is limited to only
certain taxpayers and select functions of the IRS.

GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

157

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 V.A, Representation, in Publication 3319.
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.
Systemic Advocacy – identifying and advocating for issues that impact low income and ESL taxpayers utilizing 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.

T
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.

158

LOW INCOME TAXPAYER CLINIC

GLOSSARY

I

Tax Compliance Officer –the individual authorized to speak with the IRS about federal tax compliance matters
involving the sponsoring organization.

II I. LITC III
PROGRAMIV OVERVIEW
V

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.
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.

VI

U

VIIII

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.

APPENDICES
III
IV

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 the Payment Management System. If a grantee determines that it will not
spend its entire award, the grantee should immediately notify the LITC Program Office.

V

V
VI

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.

VII GLOSSARY
VIII
APPENDICES
GLOSSARY
INDEX

LOW INCOME TAXPAYER CLINIC

159

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160

LOW INCOME TAXPAYER CLINIC

INDEX

I

II I. LITC III
PROGRAMIV OVERVIEW
V
VI

VIIII
APPENDICES
III
IV

V

VI

VII

INDEX
VIII
APPENDICES

GLOSSARY
INDEX

161

LOW INCOME TAXPAYER CLINIC

90/250 requirement 71–73, 150

demographics 152

A

Detailed Budget Worksheet and Narrative (Form
13424-J) 17–18, 55, 98–99, 105

allowable expenses 150
amount in controversy, defined 4, 150
amount in controversy limit 40
application 150
appropriation 150

Detailed Budget Worksheet (Form 13424-J), example
105
direct costs 152
direct lobbying 152
disallowed costs 59

award 151

E

B

education 27

back-up file system 33
budget 151
Budget Information – Non-Construction Programs
(SF-424A) 17–18, 98–99

educational activities 152
educational activities, defined 5
Eligibility Screening 19
Employer Identification Number (EIN) 153
engagement letter 153
English as a Second Language (ESL) Taxpayers 153

C
Case Management System 33, 151
Catalog of Federal Domestic Assistance (CFDA) 151
Changes in Program Plan or Budget 63

family unit 153

civil rights reporting requirements 10

family unit, defined 40

clinic 151

Federal Financial Report, example 117

clinic, defined 4

Federal Poverty Guidelines 5, 8, 36–37

clinic director 14, 24–26, 103, 151

federal register 153

close out 151

fees 12, 31–32, 57

confidentiality 21
congressional district 151
consultation 151
consultation, defined 5
Continuing Legal Education (CLE) 151
Continuing Professional Education (CPE) 46, 152
controversy 152
controversy, defined 5
controversy representation 8, 37, 45

D
Data Universal Numbering System 15
Data Universal Numbering System (DUNS) 152

162

F

LOW INCOME TAXPAYER CLINIC

Form 13424-A See Low Income Taxpayer Clinic
(LITC) General Information Report (Form
13424-A)
Form 13424-B See Low Income Taxpayer Clinic
(LITC) Case Issues Report (Form 13424-B)
Form 13424-C See Low Income Taxpayer Clinic
(LITC) Advocacy Information Report (Form
13424-C)
Form 13424-J See Detailed Budget Worksheet (Form
13424-J)
Form 13424-K See Low Income Taxpayer Clinic
(LITC) Case Information Report (Form
13424-K)
Form 13424-L See Statement of Grant Expenditures
(Form 13424-L)

COMMONLY USED ACRONYMS

M

Form 13424-N See Low Income Taxpayer Clinic
(LITC) Application Narrative (Form 13424-M)

matching funds requirement 9

G
grant 153
grant period 19
grassroots lobbying 153

I
income, defined 37
Individual Taxpayer Identification Number (ITIN)
154

mentoring 29

N
National Taxpayer Advocate (NTA) 155
networking 28
nominal fee, defined 5, 155
Non-Compete Continuation (NCC) Request 155

O
Office of Management and Budget (OMB) 156

VI

indirect costs 154

matching funds 155
II I. LITC III
PROGRAMIV OVERVIEW
V

fringe benefits 153

I

Form 13424-M See Low Income Taxpayer Clinic
(LITC) Application Narrative (Form 13424-M)

OMB Audit Requirement 59
OMB Guidance 156
operational review visit 156

Interim report 65–66

orientation visit 156

VIIII

intake 154

L
LITC conference 25, 26

outreach activities 156

lobbying restrictions 50

Payment Management System (PMS) 157

Local Taxpayer Advocate (LTA) 154

pro bono panel, defined 5, 157

low income taxpayer 154

program plan, defined 6, 157

Low Income Taxpayer Clinic (LITC) 154

program to educate, defined 6, 157

Low Income Taxpayer Clinic (LITC) Advocacy
Information Report (Form 13424-C) 141

publicity 157

Low Income Taxpayer Clinic (LITC) Application
Narrative (Form 13424-M) 17, 50, 76, 88, 94

Q

Low Income Taxpayer Clinic (LITC) Case
Information Report (Form 13424-K) 132

qualified representative, defined 6, 157

Low Income Taxpayer Clinic (LITC) General
Information Report (Form 13424-A) 127

VI COMMONLY
VII
USED
VIII ACRONYMS
APPENDICES

P

V

LITC Program Office 1, 3

Low Income Taxpayer Clinic (LITC) Case Issues
Report (Form 13424-B) 137

APPENDICES
III
IV

outreach 26, 28

Qualified Business Administrator (QBA) 24, 157
Qualified Tax Expert (QTE) 24, 158

R
recordkeeping 32
referral activity 158

low income taxpayer, defined 5

reporting responsibilities 65

GLOSSARY
INDEX

Low Income Taxpayer Clinic (LITC) Program
Narrative Report (Form 13424-N) 124

referral, defined 6

LOW INCOME TAXPAYER CLINIC

163

representation 158

T

representing, defined 6

tax compliance officer 159
Tax Counseling for the Elderly (TCE) 158

S

tax library 25

site assistance visits 22, 68, 70

tax return preparation 27, 47, 48, 159

special appearance authorization 158

technical assistance consultation 159

Standard Form 424 9, 14, 17, 18, 61, 76, 95

Termination of a Grant 71–72

Standard Form 424A 17, 18, 99

third-party in-kind contributions 159

Standard Form 425 66, 112
standards of operation 24, 158

U

Start-Up Expenses 9

unallowable expenses 159

Statement of Grant Expenditures (Form 13424-L) 66,
112, 118

underserved area 159

Statement of Grant Expenditures (Form 13424-L),
example 118
student representation 6
subgrants 8
System for Award Management (SAM) 15
systemic advocacy 158

unused funds 159

V
Volunteer Income Tax Assistance (VITA) 159
volunteers 31

Y
Year-End report 60, 66, 72

164

LOW INCOME TAXPAYER CLINIC

Publication 3319 (Rev. 4-2017) Catalog Number 26939S Department of the the Treasury Internal Revenue Service www.irs.gov



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