One of the most important services low income taxpayer clinics (LITCs) can provide to their client base is making comments when offered the opportunity and sometimes when not offered the opportunity. Because low income taxpayers have generally had no voice when the IRS, the Tax Court or other institutions impacting their tax circumstances have called for comments, LITCs serve their clients when using the knowledge gained from individual representation to respond to requests for comments. We wrote about comments to the Innocent Spouse form that led to a conversation with the form drafters and a real voice in the process here and here. The comments to the form did not lead to everything requested but did foster improvement. Perhaps, they also let the form writers know that there are real people who care very much about form design because it has such an impact.
Recently, comments were submitted on two forms – the form for changing an address and the form used for intake of individuals seeking assistance with return preparation at volunteer sites. The forms are very different and will be discussed separately below. The goal of the comments, one from an individual LITC and the other from the Center for Taxpayer Rights on behalf of a collection of LITCs, is to let the IRS know what practitioners are thinking and what the IRS should consider in revising the forms.
Change of Address Form
The Tax Clinic at the Legal Services Center of Harvard Law School sent in a comment regarding the proposed change of address form revision. The principal author, Ben Chanenson, worked in the clinic this summer as an intern and will enter the University of Chicago Law School as a 1L student in the coming days. Here is the comment submitted.
Form 8822 exists to allow taxpayers to notify the IRS that they have changed their home address. It is important for a taxpayer to notify the IRS when they move so that they can receive notices and other communications from the IRS. If a taxpayer notifies the IRS of a change in address and the IRS sends mail to the wrong address then under IRM 4.8.9.11.4 a notice may be invalid because the IRS has a statutory requirement to address mail to a taxpayer’s last known address. We have discussed litigation related last known address on this blog before and two years ago the Tax Clinic secured a victory in the Third Circuit over this issue.
The Tax Clinic offered five recommendations in its letter. These recommendations included ways to simplify the form (by removing unnecessary boxes), use more accessible language (which would allow the form to adhere to the Plain Writing Act of 2010), and better explain the importance of notifying the IRS of a change of address. The Tax Clinic also suggested that the IRS provide information on alternative ways that the IRS can learn that a taxpayer moves. Form 8822 is not the only option for taxpayers. Writing down a new address on a form 1040 serves to notify the IRS of a change in address. However, it takes considerable time for the IRS to process form 1040 and form 8822. In contrast, if a taxpayer notifies USPS of a change in address then the IRS can access the USPS’s National Change of Address database and update the taxpayer’s address more quickly. Critically, USPS allows people to change their address through an online form while the IRS requires snail mail. The Tax Clinic advocated for making form 8822 into an online form that taxpayers could submit without ever leaving the IRS website. This echoes PT’s Nina Olson’s first wish in her IRS Wishlist for 2021.
Intake Form
The Center for Taxpayer Rights holds weekly online meetings of clinicians to discuss issues of general interest to the LITC community and to assist in formulating litigation and other strategies for better representation of their clients. One of the long standing concerns of the LITC community is making connections with taxpayers in need of assistance. Each LITC engages in outreach efforts in their respective communities in order to make sure that members of their community know about the existence and the purpose of the clinic. While the Tax Court does a good job of notifying petitioners to its Court of the existence of LITCs and the possibility of representation, many low income taxpayers need assistance during the administrative process of their case and often remain unaware of the possibility of assistance. The free tax return preparation efforts reach large numbers of community members who may need assistance regarding a prior year’s return. Despite the fact that Congress has created grant programs for both LITCs and Volunteer Income Tax Assistance (VITA) administered by the IRS, the coordination between VITA programs and LITCs has not fully developed. The Center’s comments on the intake form seek to foster better coordination so that individuals seeking return preparation assistance know of the ability to obtain controversy assistance if needed.
The Center’s comments on the intake form are here; you can see Form 13614-C, Intake/Interview & Quality Review Sheets, here. In its comments, the Center suggests ways the form can be revised to more effectively prompt a VITA intake interviewer or preparer to identify a client who may have a tax matter or controversy that would warrant a referral to a LITC. The first comment focused on the line that reads, “Last Year, Did You (or Your Spouse) … Have Earned Income Credit, Child Tax Credit or American Opportunity Credit disallowed in a prior year?” Noting that many low income taxpayers do not necessarily know what, specifically, the IRS has changed on their prior year returns, the Center recommended the question be rephrased as, “Did you not receive your refund or have the amount of your refund changed in a prior year?” If the answer to that question is yes, training and job aids for this line should direct the VITA/TCE volunteer to make a referral to an LITC. The Center also suggested that an additional line be added to the form where the taxpayer has a balance due on the return, asking whether the taxpayer has the ability to pay the balance. If the answer is no, then the VITA volunteer should make a referral to an LITC. Similarly, where the form asks, “Did you, or your spouse if filing jointly, receive a letter from the IRS?,” if the taxpayers answers yes, the training materials should make clear a LITC referral is in order.
The final recommendation addressed the section of the form where demographic data is gathered, including race and ethnicity. Although the form notes that the VITA sites may need this information in order to receive grant money or federal funding, the clinics on the Center’s weekly calls felt that the form should more clearly state that this information is “for official use only” by the VITA sites alone and will not be recorded by the IRS for other than statistical purposes.
Poorly designed forms can create administrative burden or confusion and fail to elicit the appropriate responses. A well designed form, on the other hand, can alert the user to important issues and direct to the next steps, including, in the case of the VITA intake form, to where the user can obtain free representation in resolving a tax dispute. Both IRS and taxpayers will benefit from members of the tax community sharing their expertise by commenting on forms.