2027-3319.pdf

PDF 2 MB Posted May 6, 2026

Attached to: 2027 Low Income Taxpayer Clinic (LITC)
Opportunity number: TREAS-GRANTS-052027-001
Issued by: Department of the Treasury

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Written by GovTribe AI · May 7, 2026

This is the 2027 Grant Application Package and Guidelines for the Low Income Taxpayer Clinic (LITC) program, administered by the Internal Revenue Service under the Department of the Treasury (CFDA 21.008). The document provides comprehensive instructions for organizations seeking federal matching grants to provide tax services to low-income and English as a Second Language (ESL) taxpayers.

The 2027 LITC grant application period runs from May 6, 2026, through July 6, 2026, at 11:59 p.m. Eastern Time. Grant awards of up to $200,000 per clinic per year are available for eligible organizations, with all federal funds requiring dollar-for-dollar matching contributions. Eligible applicants include accredited law, business, or accounting school clinical programs, and tax-exempt nonprofit organizations under IRC Section 501(c)(3) that provide representation in IRS controversies, ESL education, and advocacy services. At least 90 percent of taxpayers represented must have incomes not exceeding 250 percent of the federal poverty level, and services must be provided at no more than nominal fees. Applications must be submitted electronically through the LITC Grants Portal (https://litcgrants.treasury.gov) and include Standard Form 424, IRS Forms 13424-J and 13424-M, most recent audited financial statements, indirect cost rate agreements if applicable, and tax-exempt determination letters. Selection notifications will be issued by November 2026, with grant performance periods running from January 1 through December 31, 2027. Grant recipients must submit interim reports by July 30, 2027, and year-end reports by March 30, 2028, and are required to attend the Annual LITC Grantee Conference (anticipated December 2026). The document establishes operational standards requiring key personnel (Clinic Director, Qualified Tax Expert, and Qualified Business Administrator), prohibits subawards except with prior written approval, and mandates compliance with federal tax obligations, civil rights laws, and Uniform Guidance requirements (2 CFR Parts 200 and 1000).

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2027 Publication 3319

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2027 Grant Application Package and Guidelines iLOW INCOME TAXPAYER CLINICS

Table of Contents

TABLE OF CONTENTS

LETTER FROM THE NATIONAL TAXPAYER ADVOCATE��iv

WHAT’S NEW IN GRANT YEAR 2027��vi

COMMON ERRORS CHECKLIST��vii

I. LITC PROGRAM DESCRIPTION�� 1 A. LITC Grant Program Priorities��1

B. History of the LITC Program�� 3

C. Statutory Authority To Fund LITCs�� 4

D. Key Terms and Definitions�� 5

II. FEDERAL AWARD INFORMATION��9 A. Awards Are Subject to Congressional Appropriations�� 9

B. Award Performance Period�� 9

C. Subawards Are Generally Prohibited�� 10

D. LITC Grants Are Not Cooperative Agreements�� 10

III. AWARD ELIGIBILITY REQUIREMENTS�� 11 A. Eligible Applicants�� 11

B. Requirement to Provide Matching Funds Equal to Award �� 11

C. Other Eligibility Requirements ��12

i. Using Grant Funds to Support Other Activities Is Prohibited ��12

ii. Charging More Than a Nominal Fee for Services Is Prohibited��12

iii. Compliance With Federal Tax and Nontax Requirements ��12

iv. Debarment and Suspension��14

IV. APPLICATION AND SUBMISSION PROCESS��15 A. Accessing the LITC Grant Application Package and Guidelines��15

B. Required Content for LITC New Grant Applications and Continuation Requests��15

i. Determining Type of Application ��15

ii. S ubmitting a New Grant Application��15

iii. Instructions for Completing a New Grant Application ��15

iv. S ubmitting a Continuation Request��16

v. Instructions for Completing a Continuation Request��16

vi. Withdrawing Applications After Submission��17 ii LOW INCOME TAXPAYER CLINICS

C. System for Award Management Registration Requirement and Unique Entity Identifiers��17

i. S ystem for Award Management��17

ii. E mployer Identification Number��18

iii. Unique Entity Identifier��18

iv. O rganization Name Change Requests��18

D. Submission Due Dates and Times ��18

i. Due Date for LITC New Grant Applications and Continuation Requests ��18

ii. Incomplete or Late LITC New Grant Applications and Continuation Requests ��18

E. Budget Considerations and Funding Restrictions �� 19

i. S pending LITC Grant Funds and Matching Funds ��19

ii. Direct vs. Indirect Expenses�� 22

iii. Meeting the Matching Funds Requirement�� 25

iv. O ffice of Management and Budget Audit Requirement�� 28

V. APPLICATION REVIEW ��30 A. Technical Evaluation of New Grant Applications and Scoring Criteria��30

B. LITC Program Office Evaluation and Selection of New Grant Applications and Continuation Requests ��33

i. L ITC Program Office Evaluation��33

ii. Civil Rights Compliance Reviews��35

VI. AWARD ADMINISTRATION ��37 A. Notification of Selection �� 37

B. Notice of Award �� 37

C. Administrative Requirements��38

i. S tandards for Operating a Low Income Taxpayer Clinic ��38

ii. L ow Income Taxpayer Clinic Program Office Webinars��40

iii. Annual Low Income Taxpayer Clinic Grantee Conference��40

iv. Developing a Community Outreach Plan��41

v. B uilding Community Partnerships ��43

vi. N etworking With Other Low Income Taxpayer Clinics��43

vii. Mentoring��43

viii. Technical Assistance��44

ix. Maintaining Client Confidentiality ��44

x. Recruiting and Supervising Volunteers��45

xi. Recordkeeping and File Management��46

xii. Representing Low-Income Taxpayers��49

xiii. Education�� 59 iiiLOW INCOME TAXPAYER CLINICS

Table of Contents

xiv. Advocacy��61

xv. Preparing Tax Returns and Individual Taxpayer Identification Number Applications ��61

D. National Policy Requirements and Administrative Requirements��62

i. General Compliance �� 62

ii. Managing Grant Funds �� 67

iii. L obbying Restrictions��69

E. Reporting Responsibilities�� 72

i. E vents Requiring Notification to the LITC Program Office�� 73

ii. S ubmitting the Interim Report �� 75

iii. S ubmitting the Year-End Report �� 75

iv. Grant Closeout�� 76

VII. �LITC PROGRAM OFFICE RESPONSIBILITIES AND CONTACT�� 77 A. Structure�� 77

B. Administration �� 77

C. Assistance �� 78

D. Oversight �� 78

E. Site Assistance Visits �� 78

F. Contacting the LITC Program Office ��81

VIII. �AWARD MODIFICATION, SUSPENSION, TERMINATION, OR WITHDRAWAL ��82

FEDERAL GRANT ACRONYMS��85

GLOSSARY��87 iv LOW INCOME TAXPAYER CLINICS

LETTER FROM THE NATIONAL TAXPAYER ADVOCATEMAY 2026

DEAR PROSPECTIVE LOW INCOME TAXPAYER CLINIC GRANT APPLICANT:

I am pleased to announce the opening of the 2027 Low Income Taxpayer Clinic (LITC) grant application period. Applications will be accepted from May 6, 2026, through July 6, 2026, at 11:59 p.m. Eastern Time (ET). Whether you are applying for the first time or continuing your work with the program, we appreciate your commitment to serving taxpayers and communities in need.

As you consider applying for the upcoming grant year, we remain committed to expanding access to representation and education for low-income taxpayers and individuals for whom English is a second language (ESL). Your work as an LITC plays a vital, mission-driven role in ensuring that all taxpayers, regardless of income or language spoken, are heard, supported, and treated fairly. In 2027, we aim to broaden the program’s geographic reach and serve more taxpayers by strengthening existing clinics and supporting new ones in underserved communities. The work of LITCs is powerful and makes a meaningful difference in communities across the country. In 2024, IRS-funded LITCs:

n Represented more than 21,000 low-income taxpayers in disputes with the IRS;

n Provided consultation assistance to over 18,000 taxpayers; and n Conducted more than 20,000 educational activities, reaching over 161,000 individuals on a variety of tax topics, including taxpayer rights and responsibilities.

Behind each of these numbers is a person or family who gained clarity, representation, and a fair opportunity to resolve their tax issue. This work matters, and it changes lives.

For fiscal year 2026, Congress appropriated $28 million in funding for the LITC Program, with awards of up to $200,000 per clinic. These funds support not only direct representation and education but also broader advocacy efforts that identify and address systemic issues affecting vulnerable taxpayers. Through this program, we continue to strengthen protections, expand awareness, and advance fairness affecting these communities.

In awarding 2027 LITC grants, we will continue to focus on:

n Expanding services in areas with high IRS compliance activity and significant populations of eligible taxpayers; and n Increasing taxpayer education in underserved communities where access to reliable information about rights and responsibilities is limited.

Eligibility and Application Process Eligibility requirements and application instructions are outlined in IRS Publication 3319. All applications must be submitted electronically through the LITC Grants Portal by the stated deadline. The IRS may award grants for up to three years; however, funding is subject to annual congressional appropriations. Generally, first-time applicants will receive a one-year grant unless otherwise specified in the Notice of Funding Opportunity to encourage coverage in underserved areas.

https://litcgrants.treasury.gov/ vLOW INCOME TAXPAYER CLINICS

LETTER FROM THE NATIONAL TAXPAYER ADVOCATE

All federal funds must be matched dollar-for-dollar with non-federal funding or third-party in-kind contributions. Applicants are responsible for all costs associated with preparing and submitting their applications.

Support for Applicants To help you prepare a strong application, the LITC Program Office will host three informational webinars:

n Session One: Application Basics: Tuesday, May 12, 2026, 1-3 p.m. ET.

n Session Two: LITC Grants Portal Overview and Application Considerations: Wednesday, May 13, 2026, 1-3 p.m. ET.

n Session Three: Budget Basics: Tuesday, May 26, 2026, 1-3 p.m. ET.

LITC will also hold Q&A Sessions: Tuesday, June 16, 2026, and Monday, June 29, 2026, 1-2 p.m. ET (no formal presentation).

These sessions are designed to help organizations understand the program, navigate the application process, and build strong proposals. To learn more about these sessions, please visit the LITC Grants website. Existing clinics submitting a new or continuation request should refer to the LITC Toolkit for additional guidance, training dates, and instructions.

Award Notification and Conference Attendance Applicants will be notified of award decisions by November 2026. All award recipients are required to attend the Annual LITC Grantee Conference, which we anticipate holding in December 2026. This conference provides an important opportunity for new and returning clinics to connect with peers, share best practices, and deepen expertise on issues affecting low-income and ESL taxpayers. Conference details will be provided once dates are finalized. If you have questions about the LITC Program or the application process, please contact the LITC Program Office at 202-317-4700 or via email at LITCProgramOffice@irs.gov.

Thank you for your commitment to serving communities in need. We are inspired by the work of LITCs across the country and look forward to partnering with you in the year ahead. Together, we will continue advancing our shared mission of ensuring fairness, dignity, and access to justice in the tax system.

Sincerely, Erin M. Collins National Taxpayer Advocate https://www.taxpayeradvocate.irs.gov/about-us/litc-grants/ https://www.litctoolkit.com/ mailto:LITCProgramOffice%40irs.gov?subject= vi LOW INCOME TAXPAYER CLINICS

WHAT’S NEW IN GRANT YEAR 2027

This list highlights key changes for the 2027 grant year. All applicants should read the full publication. By accepting the Notice of Award, grant recipients agree to follow the guidelines in Publication 3319.

FORM 13424-M, LOW INCOME TAXPAYER CLINIC (LITC) APPLICATION

NARRATIVE

The LITC Program Office has revised Form 13424-M and combined it with Form 13424, Low Income Taxpayer Clinic (LITC) Application Information, to create a single, dynamic form. The form will only display the questions relevant to the type of clinic selected. To ensure the form displays the correct questions, make sure the clinic type selected matches the services that the applicant plans to offer.

n Clinic Service Type: Choose one of the following:

n ESL Education; or n Representation, Education, and Advocacy (also known as a full scope LITC).

n Service Delivery Model: If you select Representation, Education, and Advocacy, the options will be:

n Representation – Staff (Employees of the LITC will provide a majority of the representation); or n Representation – Volunteer (The LITC will refer volunteers to provide a majority of the representation). Tip: If you select the “Volunteer” model, provide detailed responses to questions in that section of the application.

STAFFING SECTION

Indicate if one person will serve in one or more key roles to eliminate reentering the same information such as email address, telephone number, and credential information.

n For the Qualified Tax Expert (QTE), you must provide the individual’s credential (CPA, Attorney, Enrolled Agent, or Other) information, including state of licensure, license number, and whether licensed to practice before the U.S. Tax Court.

For 2027, all applicants must complete the new Form 13424-M, but for those submitting Continuation Requests, the LITC Program Office will provide special instructions via a webinar and presentation materials made available on the LITC Toolkit.

viiLOW INCOME TAXPAYER CLINICS

COMMON ERRORS CHECKLIST

To help the application process go smoothly, review these common errors. Double check the application to avoid these errors and delays in processing and review.

Standard Form 424 n If the Unique Entity Identifier (UEI) is not input at the start of the application process, the System for

Award Management (SAM) at www.SAM.gov is unable to validate or auto-populate certain fields.

n Whether fields are auto populated or entered manually, be sure the applicant’s name and address match exactly with SAM records.

n Verify all information in SAM before submitting the application.

Form 13424-M n Make sure the audit designation provided in the application matches the designation in the applicant’s most recent audit report.

n For the Civil Rights Review Activity section, do not answer “not applicable.” All questions apply to all applicants. If no reviews were conducted within the last three years, state that.

Form 13424-J n Returning applicants should base new budgets on the most recent amended budget – not the original – to ensure that previous errors are not made again.

n Provide detailed notes for each expenditure, including breakdowns (e.g., lodging, meals, airfare for travel).

Employer Identification Number (EIN) and SAM Registration n Allow several weeks to obtain an EIN and 501(c)(3) status, if applicable, and to complete a SAM registration.

n An EIN is required to complete the SAM registration process.

n SAM registration is a multi-step process that can take four to six weeks to complete.

Missing or Incomplete Attachments n Indirect Cost Rate Agreement (ICRA) is incomplete or expired. To determine whether the ICRA is properly applied, the LITC Program Office must know which costs are included in Modified Total Direct Costs, so this part of the agreement must be supplied. If the ICRA is expired, the applicant should provide an explanation, including whether an extension was requested, and if so, the date requested.

n Tax-exempt determination letter (if applicable) is missing.

n Letter of accreditation for academic institutions is missing.

n Single audit report is incomplete, missing, or not available on the Federal Audit Clearinghouse website.

http://www.SAM.gov

1LOW INCOME TAXPAYER CLINICS

LITC Program Description

I. LITC PROGRAM DESCRIPTION

A. LITC GRANT PROGRAM PRIORITIES

LITCs Provide Representation, Education, and Advocacy LITCs ensure the fairness and integrity of the tax system for taxpayers who are low-income or speak ESL by:

n Providing pro bono representation on their behalf in tax disputes with the IRS;

n Educating them about their rights and responsibilities as taxpayers; and n Identifying and advocating for issues that impact these taxpayers.

LITCs must:

n Provide dollar-for-dollar matching funds; and n Offer services for free or for a nominal fee. See Section I.D, Key Terms and Definitions.

Taxpayer Bill of Rights In December 2015, Congress enacted the Taxpayer Bill of Rights (TBOR)1 in Internal Revenue Code (IRC) § 7803(a)(3). TBOR lists rights that already existed in the IRC, putting them in simple language and grouping them into ten fundamental rights. One of the ten fundamental rights is the right to retain representation,2 meaning taxpayers have the right to retain an authorized representative to represent them in interactions with the IRS.

Taxpayers who are unable to afford representation have the right to be informed of their potential eligibility for free or low-cost assistance from an LITC so that achieving a correct outcome in an IRS dispute does not depend on a taxpayer’s ability to pay for representation.

LITC Program Coverage The IRS continues to expand access to clinic services through onboarding new clinics and allowing for expanded service delivery models geared to reach areas where the IRS has been unable to attract qualified applicants. Special consideration will be given to applicants from the following states where there is currently no LITC physically located within the state: Hawaii, Kansas, Montana, Nevada, South Dakota, West Virginia, and Wisconsin. For Nevada and South Dakota, clinics in neighboring states provide coverage, but in the remaining states, assistance is limited and delivered primarily through remote clinics.

1	See Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, Division Q, § 401, 129 Stat. 2242, 3117 (Dec. 18, 2015).
2	See IRC § 7803(a)(3)(I).

2 LOW INCOME TAXPAYER CLINICS

In addition, some areas within states have limited or no coverage including:

n Arizona: Gila County n Florida: Glades County, Hardee County, Hendry County, Hernando County, Highlands County, Indian River County, Martin County, Okeechobee County, Sumter County n Pennsylvania: Lehigh County, Northampton County n Tennessee: Fayette County, Lauderdale County, Tipton County

Figure 1

MO WV

DEKS

VTWI

INIL

MO WV

DEKS

VTWI

INIL

2026 LITC Coverage by County

LITC Service Coverage Limited Coverage

AKAK

HI PR

The Taxpayer Advocate Service (TAS) has developed an interactive map at https://www.taxpayeradvocate.irs.gov/ LITC-map to help identify areas of need. The map provides county level data, including the estimated number of taxpayers with incomes at or below 250% of the poverty level; the number of compliance activities (common to low-income taxpayers) conducted by the IRS in that county; and the most common type of compliance activity in that community. Users can zoom in on specific locations, and hovering over a county will display key metrics for that area.3

3 The map uses Housing and Urban Development, Census, and IRS data. These metrics include LITC/Count of LITCs: Name of the LITC or count of the LITCs providing service in a county; Population: 2020 Census Population (CT uses 2024 data for planning regions); Low-Income Taxpayers: Count of Tax Year 2024 returns filed with AGI below 250% of the Federal Poverty Level; Compliance Actions: Count of identified low-income taxpayers with a compliance action in 2024; Most Prevalent Compliance Action: Most prevalent type of IRS compliance action;

and Limited English Proficiency: 2024 Census estimate of the percent of the population having limited English proficiency.

https://www.taxpayeradvocate.irs.gov/LITC-map https://www.taxpayeradvocate.irs.gov/LITC-map

3LOW INCOME TAXPAYER CLINICS

Important Dates for 2026 LITC Grant Program

Application Period May 6-July 6, 2026

Session 1: Application Basics May 12, 2026

Session 2: LITC Grants Portal Overview and Application Considerations May 13, 2026

Session 3: Budget Basics May 26, 2026

Returning Applicant/Continuation Request Webinar Announcements and links on LITC Toolkit

Q&A Sessions (No formal presentation) June 16 and June 29, 2026

Application Review and Evaluation July-October 2026

Notification of Selection/Non-Selection November 2026

Grant Year January 1-December 31, 2027

Interim Report Due July 30, 2027

Year-End Report Due March 30, 2028

B. HISTORY OF THE LITC PROGRAM

The LITC Program was established in 1998 as part of the IRS Restructuring and Reform Act of 1998 to authorize funding for the LITC Program.4 The IRS created the LITC Program Office in 1999 to manage and administer the grants and provide guidance, assistance, and oversight to LITCs and prospective applicants. The LITC Program Office operates under the Office of the Taxpayer Advocate (commonly referred to as TAS). TAS is led by the National Taxpayer Advocate, who reports to the IRS Commissioner.

In 1999, the IRS issued grants totaling nearly $1.5 million to 34 entities in 18 states and the District of Columbia.

The LITC Program has since expanded its coverage, and in 2026, there are 138 clinics funded with nearly $20 million. The LITC Program Office’s history of recruiting qualified federal grant recipients has fostered the growth of a nationwide network of independent organizations working toward a common purpose in their local communities.

The maximum statutory award amount of $100,000 per clinic had remained constant since the creation of the program until the passage of the 2023 Appropriations legislation, when it was increased to $200,000 for that year.

That increase has been continued in subsequent appropriations acts. Despite the general funding limitations, LITCs have consistently delivered tremendous results, new clinics join each year, and the program continues to expand coverage into underserved areas of the country.

4 See IRS Restructuring and Reform Act of 1998, Pub. L. No. 105-206, § 3601, 112 Stat. 685, 774 (July 22, 1998).

4 LOW INCOME TAXPAYER CLINICS

C. STATUTORY AUTHORITY TO FUND LITCS

The authority to fund the development, expansion, or continuation of LITCs is derived from IRC § 7526. The text of IRC § 7526 is reprinted in full:

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.

(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.

5LOW INCOME TAXPAYER CLINICS

(3) Multiyear grants. Upon application of a qualified low-income taxpayer clinic, the Secretary is authorized to award a multiyear grant not to exceed 3 years.

(4) Criteria for awards. In determining whether to make a grant under this section, the Secretary shall consider-

(A) the numbers of taxpayers who will be served by the clinic, including the number of taxpayers in the geographical area for whom English is a second language;

(B) the existence of other low-income taxpayer clinics serving the same population;

(C) the quality of the program offered by the low-income taxpayer clinic, including the qualifications of its administrators and qualified representatives, and its record, if any, in providing service to low-income taxpayers; and

(D) alternative funding sources available to the clinic, including amounts received from other grants and contributions, and the endowment and resources of the institution sponsoring the clinic.

(5) Requirement of matching funds. A low-income taxpayer clinic must provide matching funds on a 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.

(6) Provision of information regarding qualified low-income taxpayer clinics.

Notwithstanding any other provision of law, officers and employees of the Department of the Treasury may-

(A) advise taxpayers of the availability of, and eligibility requirements for receiving, advice and assistance from one or more specific qualified low-income taxpayer clinics receiving funding under this section, and

(B) provide information regarding the location of, and contact information for, such clinics.

D. KEY TERMS AND DEFINITIONS

90/250 requirement� was established by IRC § 7526 and provides that at least 90% of the taxpayers represented by a clinic have incomes that do not exceed 250% of the Federal Poverty Level. The LITC Program uses the poverty guidelines published annually by the Department of Health and Human Services (HHS). See Section VI.C.xii, Representing Low-Income Taxpayers.

Advocacy� as it relates to LITCs is zealously protecting the rights of low-income and ESL taxpayers. Advocacy can occur on an individual or systemic basis. A substantial portion of LITC work involves assisting clients with an IRS controversy. Clinics advocate for the taxpayers they represent by ensuring they pay the correct amount of taxes, exploring all possible options for relief, and assisting them in making a fully informed decision about how best to proceed given the facts of the case and the taxpayer’s situation. Notwithstanding the unique nature of each taxpayer’s circumstances, similarly situated taxpayers often experience similar problems with tax administration. Advocacy includes but is not limited to identifying systemic-level issues and sharing them with TAS. TAS investigates the

6 LOW INCOME TAXPAYER CLINICS

submissions, proposes solutions, and works with the IRS to resolve the issues, or elevates them to the National Taxpayer Advocate. Advocacy may also include responding to public requests for comments on IRS regulations or procedures and filing amicus briefs in cases addressing issues that directly impact low-income and ESL taxpayers. For purposes of the LITC grant, advocacy does not include lobbying. See Section VI.D.iii, Lobbying Restrictions.

Amount in controversy� is the federal tax amount in dispute for each tax year for which the LITC is representing a taxpayer. Often, the amount in controversy is the amount owed or the refund requested. In some disputes with the IRS, however, the amount in controversy is the amount associated with an action taken by the IRS. The amount in controversy 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. The amount in controversy is limited to the amount in dispute, which may be less than the amount specified in an IRS statutory notice of deficiency, a notice of determination, or a notice and demand. If the taxpayer is disputing the amount due in more than one tax year or period, the amount in controversy is determined separately for each year. See Section VI.C.xii, Representing Low-Income Taxpayers, Amount in Controversy Limit.

Cases� are those matters that LITCs count and report in inventory when a taxpayer or married taxpayers retain the clinic to represent them in a controversy before the IRS or a federal court. To be counted as a case, the clinic must take steps to address the controversy, including developing a plan for representation. If the clinic represents a married couple, it is counted as one case. If a taxpayer stops communicating with the clinic after a representation plan has been developed, the clinic may still count that matter as a case. If a clinic refers the matter to a qualified representative, it may also count it as a case if the clinic provides ongoing monitoring and support.

Clinic� refers to an LITC. See the definition of LITC. Throughout this publication, the terms clinic, LITC, and grant recipient are used interchangeably.

Consultation� encompasses a discussion with or correspondence to a taxpayer designed to address the taxpayer’s unique circumstances and involves an analysis tailored to the taxpayer’s factual situation. A consultation does not necessarily result in advocating for the taxpayer before the IRS or relevant court in a representative capacity but might include fact-gathering and contact with the IRS that does not rise to the level of advocacy.

Controversy� with the IRS is a proceeding brought by the taxpayer under the IRC or any dispute between an individual and the IRS concerning the determination, collection, or refund of any tax, penalties, or interest. The definition is very broad and encompasses all types of disputes arising under the IRC, except criminal tax matters.

For example, a controversy includes a dispute related to eligibility for the Earned Income Tax Credit, a revocation or denial of a passport under IRC § 7345, and certain civil actions arising under IRC §§ 7431 to 7435. The dispute may be pending in a federal court or in any tax administration function of the IRS (e.g., Examination, Collection, Appeals, Accounts Management). The dispute does not have to arise under the IRC if the dispute is with the IRS;

for example, a controversy includes civil penalties arising under Title 31 if the IRS is the other party involved in the controversy. 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 a related tax matter. Though a controversy does not include a federal criminal tax matter, it may include a state criminal tax matter. A 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 expand the scope of the representation to include the state or local tax matter.

Educational activities� (also referred to as programs to inform) advise ESL or low-income individuals about their rights and responsibilities as taxpayers and tax issues of significance to the intended audience. To be considered an educational activity, information about a specific tax topic or topics must be conveyed to the audience.

7LOW INCOME TAXPAYER CLINICS

LITCs should address a wide range of substantive tax issues in their educational programs and materials (e.g., filing requirements, tax recordkeeping, family status issues, refundable credits, the Affordable Care Act, worker classification, identity theft, information about the audit and appeals process, collection alternatives). Selecting education topics relevant to community needs and offering the presentations and/or presentation materials in languages commonly spoken in the community allow LITCs to reach taxpayers who otherwise might experience great difficulty communicating with the IRS. These programs are delivered in-person to a live audience with participants registering, signing in, or being counted and allow for audience interaction with the presenter. Clinics may also use virtual platforms to deliver these programs and count them as educational activities for LITC reporting when there is a way for participants to be counted and for the presenter and participants to interact. Viewers of recorded materials in the year posted may be counted as additional participants so long as the organization monitors the platform so that viewers may pose and receive answers to questions. Generally, television and radio appearances are not counted as educational activities.

ESL taxpayers� are individuals for whom English is not their first language, including those who communicate using sign language. These individuals may have an additional challenge in understanding taxpayer rights and responsibilities. Consistent with IRC § 7526, delivering taxpayer education to ESL taxpayers is a priority. ESL is different than Limited English Proficiency (LEP). LEP refers to an individual’s relative ability to communicate and receive information in English. LEP taxpayers are a subset of ESL taxpayers but not all ESL taxpayers are LEP taxpayers.

Grants.gov� is the government website used by federal agencies to post discretionary notices of funding opportunities.

Key personnel� are individuals necessary for the successful functioning of the LITC. Key personnel are responsible for ensuring that the LITC’s day-to-day operations run smoothly, the LITC program is delivered in accordance with the terms and conditions of the grant, finances are properly administered, legal arguments are sound, and educational materials are accurate. Key personnel include the Clinic Director, Qualified Tax Expert (QTE), and Qualified Business Administrator (QBA). See Section VI.C.i, Standards for Operating a Low Income Taxpayer Clinic.

Low-income taxpayers� are individuals whose income does not exceed 250% of the Federal Poverty Level. The Federal Poverty Guidelines are updated annually (usually in late January) by the Department of Health and Human Services. The LITC Income Guidelines, current as of publication, can be found in Section VI.C.xii, Representing Low-Income Taxpayers. A sole proprietor is considered an individual and may be assisted by an LITC if otherwise eligible. A business or other entity is not a low-income taxpayer eligible for LITC representation. An individual trying to resolve a tax liability arising from personal 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.

LITC� is an organization receiving a grant pursuant to IRC § 7526.

Nominal fee� is a fee that is insignificantly small or minimal. A nominal fee is a small payment, bearing no relation to the value of the representation provided, considering all the facts and circumstances. A nominal fee must be a flat fee; the fee cannot fluctuate based on an hourly rate or the type of services the LITC provides. A nominal fee does not include reimbursement for actual costs incurred (e.g., photocopies, court costs, expert witness fees).

Outreach� is an activity conducted by an LITC that involves effectively publicizing and promoting the clinic’s services regarding representation, education, and advocacy on behalf of low-income and ESL taxpayers. LITCs are encouraged to identify linguistic populations, geographic service areas, or other segments of the low-income taxpayer community in which to focus outreach efforts. Outreach activities may involve direct communication (in-person

8 LOW INCOME TAXPAYER CLINICS

contact or in writing) with taxpayers or may be accomplished through contacts with other organizations or groups that assist low-income and ESL taxpayers. Additional guidance on effective outreach can be found in Section VI.C.iv, Developing a Community Outreach Plan. Outreach plans should be developed before the start of the grant year during which representation and other assistance will be offered.

Pro bono panel� is a group of qualified representatives (attorneys, certified public accountants (CPAs), or enrolled agents (EAs)) who have agreed to accept taxpayer referrals from an LITC and provide representation or consultation services free of charge to low-income or ESL taxpayers. Clinics may also use volunteers to assist with other tasks such as education, outreach, or mentoring students.

Program plan� is a description of the clinic’s planned operations, including a description of the services to be offered;

how, when, and where the services will be delivered; who will provide the services; the intended recipients of the services; and numerical goals. The terms and conditions of an LITC grant include the applicant’s program plan and any subsequent changes to the plan agreed upon between the Program Office and the clinic.

Qualified representative� is:

n An attorney;

n A CPA;

n An EA authorized to practice before the IRS;

n An individual authorized to appear before the court where the controversy with the IRS will be adjudicated; or n An individual authorized to practice before the IRS pursuant to 31 Code of Federal Regulations (CFR) § 10.7(d) (e.g., a student, law graduate, tribal court advocate, other individual for whom the IRS has issued a special appearance authorization). See Section VI.C.xii, Representing Low-Income Taxpayers, Representation by Students and Law Graduates.

For individuals other than students or law graduates, the IRS Commissioner (or delegate) has the authority to issue special appearance authorizations to allow them to practice before the IRS. For students and law graduates, the Director of the LITC Program has the authority to issue special appearance authorizations; however, the student or law graduate must be supervised by a qualified representative. See Delegation Order 25-18 (Rev. 5), Internal Revenue Manual (IRM) 1.2.2.15.18.

NOTE: An unenrolled return preparer who can practice before the IRS based upon return preparation is not a qualified representative for 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. For details regarding limited practice before the IRS by individuals who are not attorneys, CPAs, or EAs, see Rev. Proc. 2014-42, 2014-29 I.R.B. 192.

Referral� means the referral of low-income taxpayers to qualified representatives or to an LITC for representation.

Uniform Guidance� refers to 2 CFR Part 200 (and the Treasury Department’s implementation thereof, found at 2 CFR Part 1000), which contains uniform administrative requirements that relate to the pre-award, post-award, closeout, and audit phases of the federal grant life cycle. See Section VI.D, National Policy Requirements and Administrative Requirements, for a more detailed discussion.

Additional terms and definitions are available in the Glossary.

9LOW INCOME TAXPAYER CLINICS

FEDERAL AWARD INFORMATION

II. FEDERAL AWARD INFORMATION

A. AWARDS ARE SUBJECT TO CONGRESSIONAL APPROPRIATIONS

All awards depend on the availability of appropriated funds. The IRS anticipates awarding LITC grants of up to $200,000 per year to qualifying organizations for the development, expansion, or continuation of an LITC. Given the timing of appropriations, grant funds may not be made available to grant recipients until after the grant year has begun. Figure 2 explains how the LITC Program receives its funding.

Figure 2, How the LITC Program Receives Its Funding How the LITC Program Receives Its Funding

Step One

Step Two

Step Three

Step Four

Office of Management and Budget 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 between the first Monday in January and the first Monday in 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.

B. AWARD PERFORMANCE PERIOD

The LITC Program may award grants 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. Generally, first-time applicants will only be awarded a single-year grant. Multiyear grants will be awarded only to applicants that have successfully completed at least one year under the terms and conditions of the LITC grant unless the Notice of Funding Opportunity states otherwise. The LITC Program Office has discretion to determine the grant period and may award a single-year grant even if the applicant requested a multiyear grant.

Multiyear grant recipients are reviewed annually to assess performance, progress in meeting goals and objectives, and compliance with grant terms and conditions. The funding level for subsequent years will be reviewed annually and may be increased or decreased at the discretion of the LITC Program Office, based on performance, compliance with grant terms and conditions, and the availability of annually appropriated funds. Funds awarded must be used for the program specifically authorized in the Notice of Award/Funding Award (NOA).

10 LOW INCOME TAXPAYER CLINICS

C. SUBAWARDS ARE GENERALLY PROHIBITED

Generally, a clinic may not make a subaward of LITC grant funds to another organization or individual. A subaward is payment to another organization or contractor to deliver a key component of the program such as controversy representation or ESL education. Subawards may be considered if the award of a subgrant is likely to assist a grant recipient with expanding coverage to an underserved or uncovered area. Any subaward must be included in the application and approved in writing by the Director of the LITC Program. A subaward differs from payments made to a vendor or provider for providing goods or services to the clinic, which is permissible. For example, unless authorized, an LITC may not pay another organization to prepare and deliver its ESL educational activities. However, the clinic could pay a firm to translate its educational materials into another language or hire an interpreter to assist with delivery of education.

If a sponsoring organization is located outside the geographic service area and has capacity to provide services remotely, such as representation and advocacy services, a subaward to a local organization may be appropriate when local presence is needed to facilitate client contact and provide in-person education and outreach, and the area to be served is either underserved or uncovered.

NOTE: In accordance with 2 CFR § 25.300(a), a clinic may not make a subaward unless the subrecipient has obtained and provided a Unique Entity Identifier (the identifier assigned by SAM.gov).

This is the start of the file's text. The full file is on GovTribe.

File details come from the government source that posted it. Updated May 7, 2026.