Publication 3319 (Rev. 4 2017) P3319

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2018 Grant Application Package and Guidelines

LITC

LOW INCOME

TAXPAYER CLINICS

Representation • Education • Advocacy

2018 Grant Application Package and Guidelines

LOW INCOME TAXPAYER CLINIC

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:

 Basic eligibility requirements;

 Standards of operation;

 Compliance requirements;

 Application and selection process;

 Post-award requirements;

 LITC Program Ofﬁce responsibilities;

 Application forms and instructions; and

 Reporting forms and instructions.

This publication, including the Appendix section, should be

retained for future reference by all LITC grant recipients.

The IRS remains committed to achieving maximum access to representation for low income taxpayers

under the terms of this grant program. Thus, in awarding 2018 LITC grants, we will continue to work

toward the following program goals:

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

 Expanding coverage in areas identiﬁed as underserved; and

 Ensuring 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 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.

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

iii

LOW INCOME TAXPAYER CLINIC

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: 212-298-2295

Fax: 212-298-2079

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

LOW INCOME TAXPAYER CLINIC

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

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

LOW INCOME TAXPAYER CLINIC

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

I. LITC PROGRAM OVERVIEW

A. HISTORY OF THE LITC PROGRAM

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.

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

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)).

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

States with at Least One LITC Grantee – 1999 States with at Least One LITC Grantee – 2016

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

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.

(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.

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OVERVIEW

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

(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.

(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;

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 dollar-

for-dollar basis for all grants provided under this section. Matching funds may include—

(A) the salary (including fringe beneﬁts) of individuals performing services for the clinic; and

(B) the cost of equipment used in the clinic.

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

matching funds.

B. TYPES OF GRANTS AWARDED BY THE LITC PROGRAM OFFICE

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.

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.

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.

LOW INCOME TAXPAYER CLINIC

Figure 2, How the LITC Program Receives Its Funding

How the LITC Program Receives Its Funding

Step One

Step Two

Step Three

Step Four

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:

 A 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

 An organization described in IRC § 501(c) and exempt from tax under IRC § 501(a) in which employees

and volunteers represent low income taxpayers in controversies with the IRS.

LOW INCOME TAXPAYER CLINIC

LITC PROGRAM OVERVIEW

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

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.

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.

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.

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.

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.

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

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

LOW INCOME TAXPAYER CLINIC

Program 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.

LOW INCOME TAXPAYER CLINIC

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

II. GRANT RECIPIENT ELIGIBILITY III IV VVI VIIIIII IV VVI VII VIII

II. GRANT RECIPIENT 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

Percent of

Budget AllocationMatching Funds Total Budget

STAFFING

Personnel

Volunteer Services

Fringe Benefits

$130,788

55.7%

CONTRACTUAL

(i.e., Rent, Utilities)

TRAVEL

EQUIPMENT

OTHER

EXPENSES

INDIRECT

EXPENSES

TOTAL

EXPENDITURE

$36,086

16.3%

$34,213

14.6%

$ 85,734 $ 115,353 $ 201,087 86.5%

$ 2,201 $ 6,849 $ 9,050

3.9%

$ 1,995 $ 2,166 $ 4,161

1.8%

$ 87 $ 222 $ 309 0.1%

$ 2,710 $ 7,881 $ 10,591

4.6%

$ 7,273 $ 0 $ 7,273

3.1%

$ 100,000 $ 132,471 $ 232,471

100%

$71,405 $59,383

$36,086

$19,884

$14,329

LOW INCOME TAXPAYER CLINIC

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:

 Are veriﬁable from the grantee’s records;

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

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

 Are allowable under the applicable cost principles;

 Are not paid by the federal government under another award, except where authorized by the federal statute

to be used for cost sharing or matching;

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

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

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Grant funds received from the Legal Services Corporation are not considered federal funds and

therefore can be used as a source of matching funds.

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.

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

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.

D. COMPLIANCE WITH FEDERAL TAX AND FEDERAL NONTAX OBLIGATIONS

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.

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.

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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:

 The 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;

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

 Data 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;

 The 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;

 The 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

 Data, 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:

 External building accessibility (e.g., accessible entrances, curb cuts, sufﬁcient parking spaces for persons with

disabilities);

 Interior 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);

 Non-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);

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

documents); and

 Accommodations 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

F. OTHER ASSURANCES AND CERTIFICATIONS

Trafﬁcking Victims Protection Act of 2000

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.

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:

You as the recipient, and your employees, may not:

a. Engage in severe forms of trafﬁcking in persons during the period of time that the award is in effect;

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

c. Use forced labor in the performance of the award; or

d. Engage in acts that directly support or advance trafﬁcking in persons, including the following acts:

i. Destroying, concealing, removing, conﬁscating, or otherwise denying an employee access to that

employee’s identity or immigration documents.

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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:

 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

 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:

 associated with performance under the award; or

 imputed 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).

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Certain Criminal Law Violations

Federal law currently prohibits the award of grant funds to any corporation that was convicted of a felony criminal

violation under any Federal law within the preceding 24 months, where the IRS is aware of the conviction,

unless a federal agency has considered suspension or 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.

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

 Apply 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”).

 Apply 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.

 Cover 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”).

 Cover 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.

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.

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

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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:

 Conﬂict or potential Conﬂict is not substantial; and

 Covered 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:

 Restrictions on political activities at 18 U.S.C. §§ 595, 598, 600-603;

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

 Whistleblower protections at 41 U.S.C. § 4712;

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

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

 The 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.

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III. HOW TO APPLY FOR AN LITC GRANT

A. APPLICATION PROCESS

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.

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

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.

Employer Identiﬁcation Number (EIN)

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.

Data Universal Numbering System

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

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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 Non-

Compete 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

Are you seeking continuation

of a multi-year award?

How to Apply for an LITC Grant

NO YES

Submit Grant Application

Package on Grants.gov for a

single-year or multi-year grant

Submit a Continuation Request

on GrantSolutions.gov

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B. COMPLETION AND SUBMISSION OF THE LITC GRANT APPLICATION

PACKAGE

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.

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.

Sample Application Forms

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.

A complete LITC Grant Application consists of the following items, submitted through www.grants.gov and

prepared in accordance with the relevant instructions:

a. IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (see Appendix);

b. Standard Form 424, Application for Federal Assistance (see Appendix);

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);

e. IRS Form 13424-J, Detailed Budget Worksheet and Narrative (see Appendix);

f. Attachments Form (used to attach items g-j);

g. Tax exemption determination letter, if applicable;*

h. Proof of academic accreditation, if applicable;*

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

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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);

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

i. Numerical goals;

ii. Changes to the Program Plan; and

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

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.

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.

Eligibility Screening

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:

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

 Requests no more than $100,000 in grant funding;

 Budget provides for dollar-for-dollar matching funds; and

 Applicant has an active SAM registration.

LOW INCOME TAXPAYER CLINIC

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:

 In compliance with all federal tax obligations;

 In general compliance with all federal nontax obligations; and

 Not 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.

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Program Performance Plan (Maximum 75 points)

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

the:

 Qualiﬁcations, training, and supervision of the clinic staff, students, and volunteers;

 Amount of time devoted to the program by clinic staff;

 Comprehensiveness of services to be provided;

 Procedures for ensuring the conﬁdentiality of taxpayer information;

 Procedures for monitoring and evaluating program results;

 Publicity and outreach plans; and

 Dates 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.

Only information contained in the application will be considered during the technical evaluation process.

Therefore, it is extremely important that a submission contain all required information in order to

achieve the maximum score.

Figure 5, Grants Evaluation and Scoring Process

Grants Evaluation and Scoring Process

Financial Responsibility Program Performance Plan Program Coverage

Technical

Evaluation

Experience

10 10 75

100 points

LOW INCOME TAXPAYER CLINIC

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:

 Timeliness, accuracy, and completeness of Interim and Year-End reports;

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

 Whether the grantee’s activities match its program plan;

 Grantee’s involvement with other tax clinics, community groups, the Taxpayer Advocate Service (TAS), and

the LITC Program Ofﬁce;

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

 Whether 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).

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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:

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

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

 Other 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.

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.

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.

LOW INCOME TAXPAYER CLINIC

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-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.

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.

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Requirement to Maintain a Physical Location

LITCs must maintain a bona ﬁde physical place of business and a permanent address. A bona ﬁde physical place

of business means a permanent ofﬁce space where clients can be received, ﬁles are kept, the telephone is answered,

and the LITC staff can be reached during normal business hours. Applicants with only a virtual ofﬁce will not be

awarded LITC grant funds.

Providing a Toll-Free Number

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

may be used to pay for a toll-free number.

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

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.

Attending the Annual LITC Conference

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.

For all new grantees, the Clinic Director and the QBA must attend a mandatory conference call held

prior to the LITC Conference.

LOW INCOME TAXPAYER CLINIC

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.

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

 Representation in controversy cases;

 Education about taxpayer rights and responsibilities; and

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

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:

 Tax recordkeeping;

 How to choose a tax return preparer;

 Understanding the Taxpayer Bill of Rights; or

 Tax payment options.

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:

 If necessary to resolve a controversy; or

 Ancillary to ESL education, as discussed in Section V. D, Preparing Tax Returns and ITIN Applications, of

this publication.

LITCs must include a message in all publicity materials, announcements, and their website stating that

the clinic does not generally provide tax return preparation.

Brochures, ﬂyers, or other clinic information distributed in IRS ofﬁces must contain language to indicate the

following two key principles:

 Although 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

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

Such disclaimers need not be worded exactly as above, but must convey these principles. In addition, grantees

may not use the IRS, TAS, or LITC program ofﬁce logo in any advertising materials.

LOW INCOME TAXPAYER CLINIC

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.

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G. MENTORING AND TECHNICAL ASSISTANCE

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.

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.

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.

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.

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.

Client Information Must Be Redacted From Training Materials

Client information must be redacted from materials before being used for training. This includes deletion of

names, addresses, taxpayer identiﬁcation numbers, and any other information that could reasonably lead to

identiﬁcation of the client.

LOW INCOME TAXPAYER CLINIC

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.

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I. VOLUNTEERS

Create Written Position Descriptions for Volunteers

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.

Referrals Must Be Monitored

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).

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.

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.

LOW INCOME TAXPAYER CLINIC

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:

 Initial client interview;

 Research (identifying the issue);

 Preparing pleadings or other court documents;

 Preparing letters (identifying the recipient and subject matter);

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

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

 Consultation with tax return preparer (identifying the preparer);

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

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

When a claim for attorneys’ fees is submitted, the IRS makes an initial determination as to whether client records

are sufﬁciently detailed, based on the facts and circumstances of each case. For additional guidance on the

recovery of attorneys’ fees, see Rev. Proc. 2016-17, 2016-11 I.R.B. 436.

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

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-disaster-

taxpayers-and-businesses and www.ready.gov/business.

Client Records Must Be Kept in a Secure Location

Client records must be kept in a secure location (e.g., a locking ﬁle cabinet or password-protected electronic ﬁles).

Before clinic employees or volunteers leave the ofﬁce each day, they must make sure that taxpayer information

is stored in a locked area. If it is necessary to take taxpayer information out of the ofﬁce, it must be safeguarded

at all times. In addition, LITCs must have procedures in place to respond to a breach of client information, and

must notify the LITC Program Ofﬁce in the event of a breach.

Retain Records That Document Compliance

Federal award recipients must maintain ﬁnancial records and supporting documents to substantiate compliance

with grant requirements. Generally, such records must be maintained for a period of three years from the date of

submission of the Year-End Report. See 2 CFR § 200.333(b).

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.

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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.

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V. STANDARDS FOR PROVIDING TAXPAYER SERVICES

A. REPRESENTATION

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:

 Account adjustments;

 Exam;

 Collection;

 Appeals; or

 Litigation.

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

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.

Use an Engagement Letter When Opening a New Case

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.

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

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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.

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LITC Income Guidelines

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.

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

For each additional person, add $10,450 $13,075 $12,025

Income for Purposes of the 90/250 Test

“Income” is deﬁned in accordance with the deﬁnition used by the U.S. Bureau of the Census. See www.census.

gov/topics/income-poverty/income/about.html for a more detailed discussion of items classiﬁed as income.

Income includes total annual cash receipts before taxes, subject to the exceptions provided below. For example,

income includes:

 Gross salaries before payroll deductions;

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

 Alimony;

 Child support;

 Federally funded and other public assistance;

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 Social security;

 Pensions and retirement income;

 Unemployment beneﬁts;

 Workers compensation;

 Rents;

 Royalties;

 Scholarships;

 Dividends;

 Interest;

 Net gambling winnings; and

 Survivor beneﬁts or annuity payments.

Income does not include:

 Proceeds received from the sale of property (including stocks, bonds, a house, a car);

 Withdrawals from a bank account;

 Tax refunds;

 Gifts;

 Loans;

 Lump sum inheritances;

 Insurance payments; or

 Noncash 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.

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Determining Annual Income

LITCs should generally determine program eligibility based on the taxpayer’s annual income, at the time the

taxpayer is seeking services. In the case of seasonal workers or taxpayers whose ﬁnancial situation has recently

changed, the clinic may use a reasonable method to estimate the taxpayer’s income, and then annualize that

amount.

Example 1: Determining a Taxpayer’s Annual Income

A taxpayer seeking representation was unemployed for a year but began working again three months ago at a

full-time job. The clinic should calculate the taxpayer’s income for the immediately preceding three month

period and multiply by four to determine if the taxpayer meets the LITC income guidelines.

Example 2: Determining a Taxpayer’s Annual Income

A taxpayer seeking assistance works seasonally for eight months each year, and cares for family members

during the remainder of the year. The taxpayer earns no other income. The clinic should use the amount

earned over the eight month period as the taxpayer’s annual income to determine if the taxpayer meets the

LITC income guidelines.

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.

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.

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

Spouses represented with respect to a joint liability — i.e., arising from a married-ﬁling-jointly return — are

treated as a single case for purposes of applying the 90/250 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.

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

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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

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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

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.

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.

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

A clinic may represent a taxpayer in a case in which the amount in controversy for a given 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.

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).

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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.

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Participation in the United States Tax Court Clinical Program

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.

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.”

Representation by Students and Law Graduates

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.

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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.

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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.

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

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:

 Helping taxpayers to understand their taxpayer rights and obligations;

 Publicizing the clinic and its services; and

 Generating controversy representation cases.

Educational activities should address tax issues of particular signiﬁcance to low income and ESL taxpayers in the

local community, including:

 Tax recordkeeping;

 Filing requirements and due dates;

 The Taxpayer Bill of Rights;

LOW INCOME TAXPAYER CLINIC

 Eligibility for various deductions and credits;

 Tax provisions of the Affordable Care Act;

 Worker classiﬁcation;

 Identity theft;

 Innocent spouse relief;

 The audit and appeals process; or

 Collection 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:

 Making a presentation about federal taxpayer rights and responsibilities to an ESL class at a local

community college;

 Presenting 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;

 Conducting a workshop for low income workers about how to properly complete a Form W-4 for income

tax withholding;

 Holding a training for the staff of an immigrant rights organization about how to apply for and use an

Individual Taxpayer Identiﬁcation Number (ITIN); or

 Leading 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).

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STANDARDS FOR PROVIDING TAXPAYER SERVICES

V. STANDARDS FOR PROVIDING TAXPAYER SERVICESIII III IV

C. ADVOCACY

The third prong of the LITC mission is to identify and advocate for issues that impact low income and ESL

taxpayers. LITCs may achieve this goal through a variety of methods, including but not limited to:

 Participating in advocacy projects with professional organizations;

 Commenting on proposed IRS regulations and guidance;

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

 Authoring articles in scholarly journals or general interest publications;

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

 Producing public service announcements; or

 Submitting 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

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/tac-

locations-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.

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).

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.

LOW INCOME TAXPAYER CLINIC

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.

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VI. COMPLIANCE REQUIREMENTSIII III IV V

VI. COMPLIANCE REQUIREMENTS

A. UNIFORM ADMINISTRATIVE REQUIREMENTS

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).

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.

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:

 Title 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;

 Section 504 of the Rehabilitation Act of 1973 (Public Law 93-112), as amended, which prohibits

discrimination on the basis of disability;

 Title 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;

 Age Discrimination Act of 1975 (Public Law 94-135), as amended, which prohibits discrimination on the

basis of age; and

 Executive 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.

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

LOW INCOME TAXPAYER CLINIC

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:

 Visit or send letters to members of Congress or state or local legislators, urging them to favor or oppose

speciﬁc legislation pending under their jurisdiction;

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VI. COMPLIANCE REQUIREMENTSIII III IV V

 Develop materials designed to advocate for the enactment or repeal of any legislation or provide such

materials to anyone;

 Draft or assist in the drafting of legislation or provide comments on draft legislation;

 Pay, 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

 Engage 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.

Grantees are permitted to use federal grant funds and matching funds to:

 Educate 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;

 Respond to documented requests from members of Congress, state legislatures or other ofﬁcials;

 Interact with agency liaisons, such as the National Taxpayer Advocate or Local Taxpayer Advocates,

regarding program-related issues;

 Respond to a personal or public invitation from the IRS for comments on proposed tax regulations or

guidance that impact low income and ESL taxpayers;

 Partner 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);

 Contact 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

 Discuss 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

Grantees may expend non-LITC funds (i.e., funds that are neither federal grant funds nor matching funds) on

lobbying activities. However, under the Byrd Amendment (31 U.S.C. § 1352), grantees may be required to

disclose lobbying activities conducted if the activities relate to lobbying regarding the making or awarding of a

grant and the organization receives more than $100,000 in federal grant funds.

LOW INCOME TAXPAYER CLINIC

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

Type of Funds

Affected by

Restriction

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

Lobbying topics

covered by

Restriction

All subject

matters

Limited to lobbying regarding the making or

awarding of a grant; it does not appear to apply

to lobbying on general program legislation (i.e.,

to expand the subject matter of the program, as

opposed to the amount of money awarded for

program purposes which may increase the award

to the grantee).

All subject

matters

Stage of legislation

covered by restriction

All stages,

including before

introduction

All stages, including before introduction.

Legislation

pending before

Congress

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

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

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VI. COMPLIANCE REQUIREMENTSIII III IV V

grantee has a requirement under Title 31 to report lobbying activities, the email activity would need to be

disclosed, including any research or background work performed in connection with the email to the listserv.

For purposes of IRC § 501(c)(3), sending a single email to the listserv would likely constitute an

“insubstantial” amount of lobbying. The grantee likely should not have substantial expenditures or have

expended substantial time 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.

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

 IRC § 501(h) and IRC § 4911;

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

 Treas. Reg. §§ 56.4911-1 through 56.4911-10; and

 Publication 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.

D. SPENDING LITC GRANT FUNDS AND MATCHING FUNDS

Cost Principles of 2 CFR Part 200

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:

 Be necessary and reasonable for the performance of the federal award and be allocable thereto under the

applicable cost principles;

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

 Be consistent with policies and procedures that apply uniformly to both federally-ﬁnanced and other

activities of the grantee;

 Be accorded consistent treatment by the grantee;

LOW INCOME TAXPAYER CLINIC

 Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and

local governments and Indian tribes only, as otherwise provided for in the cost principles;

 Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-

ﬁnanced program in either the current or a prior period; and

 Be 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 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

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Allowable Expenses Unallowable Expenses

Travel performed by program staff to conduct LITC

business

License renewal fees for attorneys, CPAs, or enrolled

agents

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

Indirect Expenses

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:

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.

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 costs

as separate expense items.

For example, if a clinic is part of a larger organization that has an Indirect Cost Rate Agreement and the rental

cost of the facility in which the clinic operates is included in the negotiated rate, then the clinic may not include

the facilities cost under the Contractual expense category. Similarly, if the clinic elects to use the 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.

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.

LOW INCOME TAXPAYER CLINIC

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:

 Veriﬁable from the grantee’s records;

 Not used as a match or contribution for any other federal award;

 Necessary and reasonable for accomplishment of LITC program objectives;

 Allowable under the applicable cost principles;

 Not paid by the federal government under another award, except when authorized by federal statute;

 Provided for in the grantee’s approved budget; and

 In 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:

 The 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

 Fair 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.

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VI. COMPLIANCE REQUIREMENTSIII III IV V

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.

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

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:

 Grantee is funded to provide controversy representation;

 Services 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;

 Qualiﬁed representative is not a student; and

 Qualiﬁed representative is acting in a representative capacity and is advocating for a taxpayer.

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.

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.

LOW INCOME TAXPAYER CLINIC

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.

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VI. COMPLIANCE REQUIREMENTSIII III IV V

Figure 9, Qualiﬁed and Ineligible Matching Funds

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

Cash

Legal Services Corporation funds

Salaries, including fringe beneﬁts, of clinic staff

Equipment and supplies used in the clinic

Other costs necessary to the operation of the program

Third-party in-kind contributions

The value of volunteer services furnished by professional and technical

personnel, consultants, and other skilled and unskilled labor

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

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

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

Other Federal Funds

Federal work-study funds

Funds from other federal grants unless speciﬁcally authorized by statute

(See 2 CFR § 200.306(a))

Expenses that do not support or beneﬁt

LITC activities

Indirect costs, including general overhead of the institution sponsoring the

LITC

Disallowed Costs

If a grantee fails to comply with the Federal statutes, regulations, or the terms and conditions in the notice of

award, the LITC Program Ofﬁce may impose additional conditions, as described in 2 CFR § 200.207. If the

LITC Program Ofﬁce determines that noncompliance cannot be remedied by imposing additional conditions, the

LITC Program Ofﬁce may 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.

OMB Audit Requirement

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.

LOW INCOME TAXPAYER CLINIC

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:

 Offers ﬁnancial statements that present fairly its ﬁnancial position and the results of its operations in

accordance with generally accepted accounting principles;

 Maintains 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

 Complied 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.

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VII. POST-AWARD REQUIREMENTS OF GRANTEESVIIII III IV V

VII. POST-AWARD REQUIREMENTS OF GRANTEES

General Compliance

By accepting funds under this grant, the grantee agrees to comply with all terms and conditions for the grant,

which are governed by:

 26 U.S.C. § 7526;

 The terms and conditions contained in this Publication;

 Assurances and Certiﬁcations contained in Standard Form 424;

 Any requirements, prohibitions or restrictions imposed by the legislation appropriating federal funds for this

award;

 Other guidance issued by the Ofﬁce of Management and Budget after the application or NCC has been

received by the LITC Program Ofﬁce; and

 Any additional speciﬁc conditions listed in the notice of award.

Grantees are responsible for monitoring clinic operations to ensure that all activities conducted under the award

comply with applicable Federal requirements and that performance expectations are being achieved. Grantees are

responsible for performing in accordance with the standards of operation, meeting all compliance requirements,

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:

 Restrict the use of grant funds;

 Disallow the use of grant funds or matching funds for all or part of the cost of the activity or action not in

compliance;

 Suspend or terminate the award in whole or in part, as explained in Section VIII.F, Suspension or

Termination of a Grant;

 Initiate suspension or debarment proceedings as authorized under 2 CFR Part 180 and Federal awarding

agency regulations;

 Withhold further awards for the program; or

 Take other remedies that may be legally available.

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

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

LOW INCOME TAXPAYER CLINIC

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:

 Key personnel, including the Clinic Director, QTE, or QBA, as well as any changes in their contact

information (telephone number and email address);

 The clinic address (both the physical address and the mailing address), telephone number, or fax number;

 The days and hours of operation; and

 The 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.

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Changes in Program Plan or Budget

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

submitted with 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:

 The scope or objective of the program;

 Key personnel or time devoted to the LITC by key personnel;

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

 The 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?

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:

 The amount of grant funds being returned;

 The reason for the return of funds; and

 The 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

A grantee that wishes to withdraw from the LITC Program or terminate operations of its LITC must notify the

LITC Program Ofﬁce prior to the date of withdrawal or termination. All unused funds must be returned to the

IRS within two weeks of the date of withdrawal or the date of termination. The federal government is generally

obligated to charge interest on any amount that is not repaid in a timely fashion. See 31 CFR § 901.9. Thus, for

any funds the LITC Program Ofﬁce requests to be returned to the IRS, failure to repay those funds on time may

result in the grantee having to pay interest on those funds.

If a grantee withdraws from the LITC Program, a ﬁnal ﬁnancial report and program narrative must be

submitted within 90 days of ﬁnal clinic activity or withdrawal from the program, whichever is later. A grantee

that withdraws from the program must comply with its ongoing professional responsibilities discussed in

Section V. A, Representation.

LOW INCOME TAXPAYER CLINIC

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:

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

 The best reasonably available interest-bearing account would not be expected to earn interest in excess of

$500 per year on federal cash balances; or

 The 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.

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Interest Earned on Grant Funds

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.

C. REPORTING RESPONSIBILITIES

How Do I Submit Reports and Other Documents?

Grantee Interim and Year-End reports are submitted online through Grant Solutions at www.grantsolutions.gov.

Grant Solutions is a comprehensive grant management system operated by the Grants Center of Excellence.

Grantees use Grant Solutions to take all actions regarding their grant (except for drawing down funds, which

is done in the 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?

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.

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

 Restricted access to grant funds;

 Reduction of any future award amount; or

 Suspension or termination of the grant.

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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.

 Standard Form 425, Federal Financial Report;

 Form 13424-L, Statement of Grant Expenditures;

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

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

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

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

 Form 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 Year-

End 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.

 Standard Form 425, Federal Financial Report;

 Form 13424-L, Statement of Grant Expenditures;

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

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

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

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

 Form 13424-C, Advocacy Information Report.

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VII. POST-AWARD REQUIREMENTS OF GRANTEESVIIII III IV V

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.

Subject to OMB approval, the LITC Program Ofﬁce may require additional reporting information from

LITC grantees. Please refer to the LITC Toolkit prior to submitting your report for updates to reporting

requirements.

LOW INCOME TAXPAYER CLINIC

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:

 Administering the award and payment of grant funds;

 Providing assistance and guidance to grantees; and

 Monitoring 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:

 Headquarters staff that report to the Director and the Deputy Director of the LITC Program including

managers, program analysts, and an attorney-advisor;

 Grant administration and operations staff including operations and support staff responsible for processing

grant applications, awards, reports, and payments; and

 Advocacy 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

Deputy Director

Clinical Advocacy Manager Secretary Grant Operations Manager

Senior Analyst Analyst Secretary

Director

Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst Analyst

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VIII. LITC PROGRAM OFFICE RESPONSIBILITIESVIIVIIII III IV V

B. ADMINISTRATION

The LITC Program Ofﬁce administers the grant by:

 Processing LITC grant applications and making awards to successful applicants;

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

 Maintaining 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;

 Maintaining 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;

 Publishing annually Publication 5066, LITC Program Report, which reports the activities of the LITCs to

internal and external stakeholders; and

 Reviewing and analyzing data from reports submitted by grantees to identify trends and recognize best

practices.

C. ASSISTANCE

The LITC Program Ofﬁce assists grantees and applicants by:

 Providing technical assistance and guidance to grantees and potential applicants;

 Informing 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;

 Sponsoring 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;

 Conducting 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;

 Fostering the working relationship between grantees and Local Taxpayer Advocate (LTA) ofﬁces by

facilitating annual LTA site assistance visits;

 Issuing 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

 Coordinating access for LITCs to e-services products offered by the IRS.

LOW INCOME TAXPAYER CLINIC

D. OVERSIGHT

The LITC Program Ofﬁce conducts oversight of grantees by:

 Processing 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;

 Reviewing 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

 Conducting 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:

 Orientation visit;

 Operational review visit; and

 Local 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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What Is the Purpose on an LTA Visit?

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.

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.

Actions that may lead to suspension or termination include:

 Failure to comply with federal tax obligations;

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

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

 A violation by the recipient of a material provision of IRC § 7526 or other applicable law or regulation

(including 2 CFR Part 200);

 A violation by the recipient of a material provision of Publication 3319, (for example, failure to timely ﬁle

complete and accurate reports);

 Failure to maintain taxpayer information in a secure manner; and

 Failure to provide accurate and competent representation to taxpayers, where competent representation

requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary to provide effective

assistance. See ABA Model Rule 1.1, Competence, and Model Rule 1.3, Diligence.

Remedies for Noncompliance

If a grantee fails to comply with the Federal statutes, regulations, or the terms and conditions in the notice of

award, the LITC Program Ofﬁce may impose additional conditions, as described in 2 CFR § 200.207. If the

LITC Program Ofﬁce determines that noncompliance cannot be remedied by imposing additional conditions, the

LITC Program Ofﬁce may take one or more of the following actions, as appropriate in the circumstances:

 Temporarily restricting access to grant funds pending correction of the noncompliance or more severe

enforcement action;

 Disallow all or part of certain cost items, including grant expenditures and matching funds, that support the

activity or action not in compliance;

 Wholly or partly suspend or terminate the grant;

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

LOW INCOME TAXPAYER CLINIC

 Withhold future award amount; or

 Take 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

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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.

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:

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

 Liquidation by the grantee of all obligations incurred under the award;

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

 Repayment by the grantee of any balances of unobligated cash drawn down by the grantee;

 Settlement of any adjustments to the grant award to account for any shortfall in the dollar-for-dollar

matching funds requirement.

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

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APPENDIX A

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APPENDIX A

INFORMATION FORMS FOR LITC GRANT

APPLICATIONS AND CONTINUATION REQUESTS

LOW INCOME TAXPAYER CLINIC

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:

 IRS Form 13424, Low Income Taxpayer Clinic (LITC) Application Information; and

 Standard Form 424, Application for Federal Assistance.

Applications should also include:

 IRS 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:

 Numerical goals;

 Changes to the Program Plan; and

 Civil 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.

LOW INCOME TAXPAYER CLINIC

Catalog Number 36126D www.irs.gov Form 13424 (Rev. 4-2016)

Form 13424

(April 2016)

Department of the Treasury - Internal Revenue Service

Low Income Taxpayer Clinic (LITC)

Application Information

OMB Number

1545-1648

Grant Period Request (Check one)

New application

Non-Competitive continuation

Single year Multi-year

Second year Third year

Grant amount requested (maximum $100,000)

Applicant Information

Legal name of sponsoring organization

Prefix Last name First name Middle initial Suffix

Title

Phone number FAX number Email address

Applicant's Mailing Address

Street

Street address line 2

City State ZIP + 4 code

Clinic Information

Name of clinic

Public telephone number Toll-Free telephone number (if applicable) FAX number

Website address (if applicable)

Languages served in addition to English

Clinic Street Address

Street

City State ZIP + 4 code

Clinic Mailing Address

Street

City State ZIP + 4 code

Clinic Director Information

Prefix Last name First name Middle initial Suffix

Telephone number Email address

Licenses/Certifications (Check all that apply)

Attorney CPA Enrolled Agent Other

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Page 2

Catalog Number 36126D www.irs.gov Form 13424 (Rev. 4-2016)

Qualified Tax Expert (QTE)

Prefix Last name First name Middle initial Suffix

Telephone number Email address

Licenses/Certifications (Check all that apply)

Attorney CPA Enrolled Agent Other

Qualified Business Administrator (QBA)

Prefix Last name First name Middle initial Suffix

Telephone number Email address

Tax Compliance Officer

Prefix Last name First name Middle initial Suffix

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.

LOW INCOME TAXPAYER CLINIC

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Catalog Number 36126D www.irs.gov Form 13424 (Rev. 4-2016)

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

Please provide a complete response, including zip plus-four code, for the Clinic Street Address, and Clinic Mailing Address. Do not

write “same.” Phone numbers should be formatted as 123-456-7890 x.111. When providing the clinic’s website address, please provide

the direct link to the LITC page if one is available. If no website exists, write “none.”

Please individually list all languages in addition to English in which services can be provided on site. If the clinic uses a telephone or

internet based translation service, state “other languages through interpreter services.”

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.

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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:

 Has provided true, complete, and accurate information;

 Has provided the required assurances, found on pages 86–87 of this appendix; and

 Upon 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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Speciﬁc Instructions

Item Field Name Information

1. Type of Submission: (Required) Select the box labeled Application.

2. Type of Application: (Required) Select one type of application:

• New - An application that is being submitted for a single-year grant or an application that is

being submitted for the ﬁrst year of a multi-year grant.

• Continuation – A request that is being submitted for the second or third year of a multi-

year grant that was awarded in 2016 or 2017.

• Revision – Do not select this box when applying for a grant.

3. 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.

8. 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.

b. Employer/Taxpayer

Number (EIN/TIN):

(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.

c. Organizational DUNS: (Required) Enter the organization’s DUNS or DUNS+4 number received from Dun and

Bradstreet. Information on obtaining a DUNS number is available in Publication 3319.

LOW INCOME TAXPAYER CLINIC

Item 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.

9. 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

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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)

J. Indian/Native American Tribal Government (Other than Federally Recognized)

K. Indian/Native American Tribally Designated Organization

L. Public/Indian Housing

M. Nonproﬁt with 501(c) status

N. Nonproﬁt without 501(c) status

O. Private Institution of Higher Education

P. Individual

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

X. Other (specify)

10. 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.

LOW INCOME TAXPAYER CLINIC

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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Item 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.

To be signed and dated by the authorized representative of the applicant organization. Enter

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

email (Required), and fax number. A copy of the governing body’s authorization for you to

sign this application as the ofﬁcial representative must be on ﬁle in the applicant’s ofﬁce.

Note: Signing this form (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.

LOW INCOME TAXPAYER CLINIC

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:

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.

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.

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.§§1681-

1683, and 1685-1686), which prohibits discrimination on

the basis of sex; (c) Section 504 of the Rehabilitation

Previous Edition Usable Standard Form 424B (Rev. 7-97)

Prescribed by OMB Circular A-102

Authorized for Local Reproduction

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.

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

12.

Will comply, as applicable, with the provisions of the Davis-

Bacon 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. §§327-

333), regarding labor standards for federally-assisted

construction subagreements.

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.

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.

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. 93-

205).

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.).

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.

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.

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."

18. Will comply with all applicable requirements of all other

Federal laws, executive orders, regulations, and policies

governing this program.

SIGNATURE OF AUTHORIZED CERTIFYING OFFICIAL TITLE

DATE SUBMITTED

APPLICANT ORGANIZATION

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.

19.

LOW INCOME TAXPAYER CLINIC

Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

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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Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

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.

3. Describe the plans for audits and controls.

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. Yes No

ii. Indicate whether the auditor provided a: Unqualified opinion Qualified opinion No opinion

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

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

federal grants.

Program Performance Plan

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

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

1. The Qualified Tax Expert (QTE); and

2. The Clinic Director.

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

LOW INCOME TAXPAYER CLINIC

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Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

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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Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

3. Briefly describe the procedure for intake, assignment, and monitoring of representation cases.

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

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.

III. Clinic Operations

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

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.

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

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.

LOW INCOME TAXPAYER CLINIC

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Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

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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Catalog Number 59958R www.irs.gov Form 13424-M (Rev. 8-2014)

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.

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

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

4. Taxpayers to be reached in educational activities.

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.

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.

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

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.

LOW INCOME TAXPAYER CLINIC

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

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allegation; and the status of the lawsuit or complaint, including whether the parties to a lawsuit have

entered into a consent decree.

ii. A description of all pending applications for ﬁnancial assistance and all ﬁnancial assistance currently

provided by other federal agencies.

iii. A summary of all civil rights compliance review activities conducted in the last three years. The

summary shall include the purpose or reason for the review; a summary of the ﬁndings and

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

recommendations.

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.

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APPENDIX B

BUDGET FORMS FOR LITC GRANT APPLICATIONS

AND CONTINUATION REQUESTS

LOW INCOME TAXPAYER CLINIC

BUDGET AND FINANCIAL INFORMATION

All organizations submitting an application or Non-Compete Continuation request must submit the following

budget and ﬁnancial information:

 SF-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.

 Form 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.

 Copy 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.

 A 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:

 Each budget item does not require a dollar-for-dollar match, but the total matching funds must equal

or exceed the total federal funds requested.

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

 Non-federal funds are funds from other sources that the applicant has or will have available to

spend on the LITC Program. These are considered matching funds.

 2 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.

 Please round ﬁgures to whole dollars only.

 Budgets should only include funding requested for grant year 2018, even if an applicant is applying

for a multi-year grant.

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

Purpose

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.

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

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.

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

funds.”

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.

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LOW INCOME TAXPAYER CLINIC

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.

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Line 6e.

Supplies

This expense category is used to report the cost of supplies and equipment costing less than $5,000 that

will be used in operating the LITC. Donated supplies may be included as matching funds and are valued at

the fair market value of the property at the time of the donation.

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:

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.

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

costs as separate expense items.

For example, if a clinic is part of a larger organization that has an Indirect Cost Rate Agreement and the

rental cost of the facility in which the clinic operates is included in the negotiated rate, then the clinic

may not include the facilities cost under the Contractual expense category. Similarly, if the clinic elects to

use the 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.

Line 6k. 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.

Line 7. If the LITC charges a nominal fee for services, enter the program income in column (1). Program income

may be counted as matching funds.

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).

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LOW INCOME TAXPAYER CLINIC

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.

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.

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APPENDIX B

III III IV VVI VII VIII GLOSSARY

INDEX

APPENDIX B

FULL-TIME EQUIVALENT (FTE) CALCULATION

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.

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).

Clinic Director/QTE – John Fordham, Esq.

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.

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.

Paralegal – Alice Gonzaga

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.

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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

Time spent on LITC Activities Time spent on Other Activities

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

Clinic Director

(Employee 1)

Paralegal

(Employee 2)

Intake Specialist

(Employee 3)

Receptionist

(Employee 4)

80%

43% 46% 33%

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APPENDIX B

III III IV VVI VII VIII GLOSSARY

INDEX

APPENDIX B

Form 13424-J (Rev. 4-2016)

Catalog Number 57758V www.irs.gov

Detailed Budget Worksheet

OMB Number

1545-1648

Form 13424-J

(April 2016)

Department of the Treasury - Internal Revenue Service

Name of Low Income Taxpayer Clinic

ABC Legal Services LITC

Grant Period

To 12/31/2018

From 01/01/2018

Expense Categories Federal Match Total

A. Personnel 80,355 35,000 115,355

B. Fringe Benefits 1,625 21,446 23,071

C. Travel 900 1,265 2,165

D. Equipment 0 0 0

E. Supplies 0 1,845 1,845

F. Contractual 0 11,814 11,814

G. Construction

H. Other Expenses 0 27,253 27,253

I. Total Direct Charges 82,880 98,623 181,503

J. Indirect Charges 7,120 7,120

K. Totals 90,000 98,623 188,623

EXAMPLE

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Page 2

Form 13424-J (Rev. 4-2016)

Catalog Number 57758V www.irs.gov

Detailed Budget Narrative Explanations

A. Personnel

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

Clinic Director/QTE – John Fordham, Attorney - .80 FTE Annual Salary $89,000 x 0.80 = $71,200. 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

rograms 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

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,

encils, 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

eighborhood 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.

EXAMPLE

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Page 3

Form 13424-J (Rev. 4-2016)

Catalog Number 57758V www.irs.gov

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.

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.

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:

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

on-representation services:

Volunteer attorneys will contribute services including research, consultations, and review of educational materials. Valuation rate is the same as pay

rate for staff attorney John Fordham. ($42.79/hr + $8.56/hr fringe) = $51.35/hr x 95 hrs = $4,878.

A bilingual Enrolled Agent will provide services including ESL consultations and review of educational materials. Valuation rate is consistent with

those paid for similar work in the labor market and were determined using BLS information for the locality plus reasonable fringe. ($22.50/hr +

$4.50/hr fringe) = $27/hr x 75 hrs = $2,025.

Law students will represent taxpayers before the IRS pursuant to a special appearance authorization. Valuation rate is $18/hr which represents 35%

of the staff attorney's pay rate, including fringe. (Note: students are not permitted to use the $200/hr rate available to other qualified representatives.)

$18/hr x 75 hrs = $1,350.

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

rogram a reduced rate of 10%.

$71,200 x 10% = $7,120

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.

EXAMPLE

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Page 4

Form 13424-J (Rev. 4-2017)

Catalog Number 57758V www.irs.gov

Instructions for Form 13424-J, Detailed Budget Worksheet

Purpose

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.

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

Who Must Complete This Form

All organizations submitting an application or continuation request must

complete this form. See Publication 3319 for additional information.

Specific Instructions

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.

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 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.

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.

4. Source of matching funds

C. Travel

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

determined, as well as the anticipated source of the donation. The

total amount for Supplies must equal the amount entered on line 6(e)

of SF 424A.

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APPENDIX B

Page 5

Form 13424-J (Rev. 4-2017)

Catalog Number 57758V www.irs.gov

F. Contractual

Report the budgeted cost of rent, utilities, and other contracted items or

services that will be used in operating an LITC program. Donated space

may be included as matching funds; the value assigned may not exceed

the fair rental value of comparable space. The explanation should identify:

• Nature of the expense;

• Whether the associated costs will be 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. 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.

2. De Minimis 10 percent rate

a. Rules are set forth in 2 CFR Part 200;

b. Clinics that elect to use the de minimis rate are prohibited from

charging administrative or facility costs as separate expense

items.

For example, if a clinic is part of a larger organization that has an Indirect

Cost Rate Agreement and the rental cost of the facility in which the clinic

operates is included in the negotiated rate, then the clinic may not include

the facilities cost under the Contractual expense category. Similarly, if the

clinic elects to use the 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.

G. Construction

Not applicable to this grant. No expenses are allowed.

H. Other Expenses

Report all other direct costs that will be incurred in operating the LITC

program that are not properly included in categories A through G. The

value of volunteer in-kind services is included in this category as matching

funds. The explanation should identify:

• The type of expense;

• Whether the cost was paid using federal or matching funds; and

• Source of the matching funds.

The explanation must also disclose the rate or rates that will be used to

value volunteer in-kind services and the number of volunteer hours that

will be provided, categorized by the type of service or volunteer, as

appropriate. See Publication 3319 for more information. The total amount

for other Expenses must equal the amount entered on line 6(h) of SF 24A.

I. Total Direct Charges

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.

J. Indirect Charges

Report indirect costs not directly related to the LITC program, but incurred

as part of the general overhead and administration of the sponsoring

organization. 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.

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.

Matching Funds

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.

1. List Amount of Match by Source

2. List total of all Match Funding

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.

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APPENDIX C

FORMS FOR REPORTING LITC GRANTEE ACTIVITIES

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III III IV VVI VII VIII GLOSSARY

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APPENDIX C

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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:

 Standard Form 425, Federal Financial Report;

 Form 13424-L, Statement of Grant Expenditures;

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

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

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

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

 Form 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.

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Speciﬁc Instructions

Item 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. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

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APPENDIX C

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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

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.

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

expend funds when an expense is incurred.

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.

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.

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.

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.

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LOW INCOME TAXPAYER CLINIC

Recipient Share

Line 10i

Total recipient share

required

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.

Program Income

Line 10l

Total Federal program

income earned

Enter the amount of any nominal fees or other program income earned during the reporting period.

Do not report any program income here that is being allocated as part of the recipient’s 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.

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

APPENDIX C

III III IV VVI VII VIII GLOSSARY

INDEX

APPENDIX C

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LOW INCOME TAXPAYER CLINIC

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.

EXAMPLE

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LOW INCOME TAXPAYER CLINIC

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

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III III IV VVI VII VIII GLOSSARY

INDEX

APPENDIX C

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LOW INCOME TAXPAYER CLINIC

Form 13424-L (Rev. 4-2016)

Catalog Number 58506B www.irs.gov

For Paperwork Reduction Act Notice, see Publication 3319.

Form 13424-L

(Arpil 2016)

Department of the Treasury - Internal Revenue Service

Statement of Grant Expenditures

OMB Number

1545-1648

Name of Low Income Taxpayer Clinic

ABC Legal Services LITC

Grant Period

From 01/01/2018 To 12/31/2018

Expense Categories Federal Match Total

A. Personnel 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

G. Construction

H. Other Expenses 0 29,522 29,522

I. Total Direct Charges 82,880 100,801 183,681

J. Indirect Charges 7,120 7,120

K. Totals 90,000 100,801 190,801

EXAMPLE

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LOW INCOME TAXPAYER CLINIC

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Form 13424-L (Rev. 4-2016)

Catalog Number 58506B www.irs.gov

Grant Expenditures Narrative Explanations

A. Personnel

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

Clinic Director/QTE – John Fordham, Attorney - .80 FTE Annual Salary $89,000 x 0.80 = $71,200. 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.

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

rograms 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.

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.

D. Equipment

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).

Total cost expended on supplies for the organization was $37,112 and included the cost of laptop computers, printers, copy paper, toner, pens,

encils, envelopes, postage, etc.

$37,112 x 5.0% = $1,856.

Source of funds expended: $1,856 from XYZ Private Foundation funds.

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.

EXAMPLE

I. LITC PROGRAM OVERVIEW II III IV VVI VII VIII APPENDICES GLOSSARY

INDEX

APPENDIX C

III III IV VVI VII VIII GLOSSARY

INDEX

APPENDIX C

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LOW INCOME TAXPAYER CLINIC

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Form 13424-L (Rev. 4-2016)

Catalog Number 58506B www.irs.gov

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

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.

on-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

rogram 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

one

EXAMPLE

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LOW INCOME TAXPAYER CLINIC

Page 4

Form 13424-L (Rev. 4-2016)

Catalog Number 58506B www.irs.gov

Additional Funding Request (Interim Report ONLY)

Year-End report. N/A

EXAMPLE

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INDEX

APPENDIX C

III III IV VVI VII VIII GLOSSARY

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APPENDIX C

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Page 4

Form 13424-L (Rev. 4-2017)

Catalog Number 58506B www.irs.gov

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

Important:

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.

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.

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.

4. Source of matching funds

C. Travel

Report travel costs, including costs associated with attendance at the

annual LITC conference and other travel expenses directly related to

conducting LITC business or activities. In the explanation, identify 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.

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LOW INCOME TAXPAYER CLINIC

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Form 13424-L (Rev. 4-2017)

Catalog Number 58506B www.irs.gov

F. Contractual

Report the cost of rent, utilities, and other contracted items or services

that were used in operating an LITC program. Donated space may be

included as matching funds and the value assigned may not exceed the

fair rental value of comparable space. The explanation should identify:

• Nature of the expense;

• Whether the associated costs were paid using federal or matching

funds; and

• 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.

2. De Minimis 10 percent rate

a. Rules are set forth in 2 CFR Part 200;

b. Clinics that elect to use the de minimis rate are prohibited from

charging administrative or facility costs as separate expense

items.

For example, if a clinic is part of a larger organization that has an Indirect

Cost Rate Agreement and the rental cost of the facility in which the clinic

operates is included in the negotiated rate, then the clinic may not include

the facilities cost under the Contractual expense category. Similarly, if the

clinic elects to use the 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.

G. Construction

Not applicable to this grant. No expenses are allowed.

H. Other Expenses

Report all other direct costs that were incurred in operating an LITC

program that are not properly included in categories A through G. The

value of volunteer inkind 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.

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.

I. Total Direct Charges

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

column.

J. Indirect Charges

Report indirect costs not directly related to the LITC program, but incurred

as part of the general overhead and administration of the grantee. Indirect

charges may be charged as a use of federal funds based upon an

approved Indirect Cost Rate Agreement or the 10% de minimis rate

allowed under 2 CFR Part 200. However, indirect charges may not be

counted as matching funds and the rate may only be applied to the base

paid with federal funds. The narrative explanation should identify the

indirect cost rate, the base to which the rate was applied, and the

computation for the indirect charges amount. Briefly summarize the

expenses included in the indirect cost rate agreement.

Note: If indirect costs were charged to the LITC grant, no items that