Low Income Taxpayer Clinic Wins Two Year Battle in U.S. Tax Court

March 31, 2015 - Grace Allison, Adjunct Professor

UNM School of Law
UNM School of Law

In early 2013, the Low Income Taxpayer Clinic began representation of a minority-owned sole proprietorship where all business expenses—as well as most of the taxpayer’s itemized deductions-- were disallowed. Tax and penalties proposed on audit exceeded $19,000 for a two year period, a devastating result.

In response to the IRS audit, the Clinic produced an extensive administrative appeal, which organized the voluminous documentation already presented by the taxpayer to the IRS field agent.

Twenty-one summary charts accompanied the appeal, as well as a computer disc containing bank records, credit card statements and invoices; then-Clinic student Nick McDonnell (’13) found that his legal skills—as well as his undergraduate accounting degree--were put to very good use.

As it turned out, the Appeals Division of the IRS did not grant relief, resulting in our filing a petition in U.S. Tax Court, with then-Clinic students Chris Dodd (’14) and Michael Jasso (’15) leading that effort.

In the fall of 2014, our client was vindicated when the case reached the office of IRS Area Counsel. Instead of struggling to satisfy a $19,000 tax liability, the taxpayer will receive a $10 refund, culminating our two-year effort.

The client’s response? “I can’t thank you enough for all the help UNM Law School has rendered!”