publication 3319.pdf

LITC LOW INCOME

TAXPAYER CLINICS

Representation • Education • Advocacy

GRANT APPLICATION

Package and Guidelines iLOW INCOME TAXPAYER CLINIC

IMPORTANT CONTACT INFORMATION

GRANT ADMINISTRATION AND ELIGIBILITY INFORMATION

Grant Program Office Internal Revenue Service Office: 202-317-6659 Taxpayer Advocate Service Fax: 877-477-3520 LITC Program Office Email: LITCProgramOffice@irs.gov Attention: Hours of Operation: 8:00 a.m. – 4:30 p.m. EST TA: LITC, Room 1034 1111 Constitution Ave., NW Washington, DC 20224

LITC Toolkit (password protected/only available to funded grantees) www.litctoolkit.com

LITC Grant Program on IRS.gov www.taxpayeradvocate.irs.gov/Tax-Professionals/Low-Income-Taxpayer-Clinics Dun and Bradstreet Data Universal Numbering Systems (DUNS) Number fedgov.dnb.com/webform Helpdesk: 866-705-5711

System for Award Management (SAM) www.sam.gov

Online Grant Application Submission www.grants.gov Helpdesk: 800-518-4726 Email: Support@grants.gov

Non-Competitive Continuation (NCC) Entry www.grantsolutions.gov Helpdesk: 949-389-4118

Interim and Year-End Report Submission www.grantsolutions.gov Helpdesk: 949-389-4118

Department of Health and Human Services (HHS) Payment Management System www.dpm.psc.gov

Department of Health and Human Services Poverty Guidelines aspe.hhs.gov/poverty/index.cfm

Definition of Income per U.S. Bureau of the Census www.census.gov/cps/about/cpsdef.html

Civil Rights Reporting www.irs.gov/uac/Your-Civil-Rights-Are-Protected mailto:LITCProgramOffice@irs.gov http://www.litctoolkit.com http://www.taxpayeradvocate.irs.gov/Tax-Professionals/Low-Income-Taxpayer-Clinics http://fedgov.dnb.com/webform http://www.sam.gov http://www.grants.gov http://www.grantsolutions.gov http://www.grantsolutions.gov http://www.dpm.psc.gov http://aspe.hhs.gov/poverty/ http://www.census.gov/cps/about/cpsdef.html http://www.irs.gov/uac/Your-Civil-Rights-Are-Protected

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards www.federalregister.gov/articles/2013/12/26/2013-30465/uniform-administrative-requirements-cost-principles-and-audit-requirements-for-federal-awards

INTERNAL REVENUE SERVICE INFORMATION

Tax Forms www.irs.gov/Forms-&-Pubs

Federal Tax Compliance Verification (Internal Revenue Service) 877-8290-5500 (tax exempt and government entity returns) 800-829-4933 (business and specialty tax returns) 866-6990-4096 (excise tax and Form 2290 returns)

IRS Tax Exempt and Government Entities Customer Service Line www.irs.gov/Charities-&-Non-Profits/Where-Is-My-Exemption-Application Helpdesk: 877-829-5500

General IRS Information www.irs.gov Helpdesk: 800-829-1040

Becoming an IRS Partner to Help in Your Community www.irs.gov/Individuals/Become-an-IRS-Partner-to-Help-in-Your-Community

Obtaining a Special Order for Student Practice LITC Program Office: 212-389-2295

TAX TOOLKIT

Taxpayer Advocate Service http://www.taxpayeradvocate.irs.gov

UNITED STATES TAX COURT CONTACTS

United States Tax Court Clinical Program http://www.ustaxcourt.gov/clinics.htm How to Gain Admission to Practice Before the Tax Court See Tax Court Rule 200, available at www.ustaxcourt.gov

Smartphone Interactive Scan Here http://www.whitehouse.gov/omb/circulars_index-ffm http://www.whitehouse.gov/omb/circulars_index-ffm http://www.irs.gov/Forms-&-Pubs http://www.irs.gov/Charities-&-Non-Profits/Where-Is-My-Exemption-Application%3F http://www.irs.gov http://www.irs.gov/Individuals/Become-an-IRS-Partner-to-Help-in-Your-Community http://www.taxpayeradvocate.irs.gov http://www.ustaxcourt.gov/clinics.htm http://www.ustaxcourt.gov iiiLOW INCOME TAXPAYER CLINIC

MAY 2015

Dear Prospective Low Income Taxpayer Clinic Grant Applicant:

I am pleased to announce the May 1 opening of the 2016 Low Income Taxpayer Clinic (LITC) grant application period, which runs through June 15, 2015. The Taxpayer Advocate Service (TAS) is committed to enhancing the LITC Program’s quality and coverage.

LITCs are charged to provide representation, education, and advocacy on behalf of low income taxpayers and taxpayers who speak English as a second language (ESL). The LITC program office facilitates that mission by providing guidance and assistance to grantees and potential applicants.

We continue to use www.grants.gov and www.grantsolutions.gov for paperless submission of appli-cations, Non-Competitive Continuation (NCC) requests, and grant reports. Our most significant change for the 2016 grant year will be the consolidation of funding to support each grantee’s con-troversy and ESL programs. All LITC grant recipients will be required to operate unified programs that provide direct representation in tax controversies with the IRS on behalf of low income tax-payers and use education and outreach efforts to make representation and consultation services available to ESL taxpayers.

Some of the other changes to the program I would like to highlight include:

` Special Instructions for Preparing Form 13424, Low Income Taxpayer Clinic (LITC) Application Information;

` Special Instructions for Preparing Form 13424-J, Detailed Budget Worksheet;

` Elimination of Form 13424-I, LITC Tax Information Authorization; and ` Elimination of Standard Form LLL, Disclosure of Lobbying Activities.

TAS remains committed to achieving maximum access to representation for low income taxpay-ers under the terms of this grant program. Thus, in awarding 2016 LITC grants, we will continue to work toward the following program goals:

` Ensuring that each state (plus the District of Columbia and Puerto Rico) is served by at least one clinic; and

` Ensuring that grant recipients demonstrate that they are serving geographic areas that have sizable populations eligible for and requiring LITC services.

http://www.grants.gov http://www.grantsolutions.gov

To that end, the IRS encourages applications from clinics located in the following underserved areas.

Geographic Underserved Areas in Need of LITC Services

Alabama—Birmingham, Mobile, Huntsville

Alaska—Anchorage, Fairbanks

California—Los Angeles, Sacramento

Colorado—Denver, Colorado Springs, Fort Collins

Georgia—Atlanta, Savannah, Columbus

Mississippi—Jackson, Gulfport

North Carolina—Winston-Salem, Wilmington, Raleigh

North Dakota—Bismarck, Fargo

Oklahoma—Tulsa, Oklahoma City, Lawton

South Carolina—Charleston, Columbia

Texas—El Paso, Corpus Christi, Austin

Utah—Salt Lake City

Puerto Rico—San Juan, Ponce, Mayaguez

Notwithstanding the criteria detailed above, applications or NCCs from all areas will receive seri-ous consideration.

This package contains current program guidelines, eligibility criteria for service providers and ser-vice recipients, application materials, instructions on how to submit an application or an NCC, and detailed reporting requirements. The cost of preparing and submitting an application or an NCC is the responsibility of each applicant.

To be considered for 2016 LITC Program grant funding, all applications and NCCs must be submit-ted electronically by June 15, 2015 via www.grants.gov or www.grantsolutions.gov, respectively.

The LITC Program Office will notify each applicant whether it will be awarded a grant in November 2015.

If you have questions about the LITC Program or grant application/NCC process, please contact the LITC Program Office at 202-317-6659 (not a toll-free call) or by e-mail at LITCProgramOffice@ irs.gov.

I appreciate your interest in the LITC Program and look forward to working with the 2016 Low Income Taxpayer Clinic grantees to improve the fairness and quality of federal tax administration.

Sincerely, Nina E. Olson National Taxpayer Advocate vLOW INCOME TAXPAYER CLINIC

GENERAL TABLE OF CONTENTS

I INTRODUCTION

A Mission Statement B What Is Included in Publication 3319?

C Contacting the Program Office D LITC Program Highlights E LITC Program Overview

II QUALIFICATIONS FOR FUNDING

A Basic Eligibility Requirements B Core Term Definitions C Matching Funds D Grant Period E Start-Up Expenses F Fees

III OPERATING A CLINIC

A Standards of Operation—General B Standards of Operation—Taxpayer Services

IV COMPLIANCE REQUIREMENTS

A Uniform Administrative Requirements B Lobbying Restrictions C Civil Rights Compliance D Other Assurances and Certifications E Cost Principles F Matching Funds Requirement G OMB Audit Requirement

V APPLICATION AND SELECTION PROCESSES

A Completion and Submission of the LITC Grant Application Package B Completion and Submission of a Non-Competitive Continuation (NCC) Request C Evaluation and Screening D Selection of Grant Recipients E Notice of Award F Application Amendment Package

VI POST-AWARD REQUIREMENTS OF GRANTEES

A General Compliance B Notification Requirements C Managing Grant Funds D Reporting Responsibilities

VII LITC PROGRAM OFFICE RESPONSIBILITIES

A General Responsibilities B Structure C Administration D Assistance E Oversight F Site Assistance Visits G Suspension or Termination of a Grant

APPENDIX A: APPLICATION AND NCC REQUEST GENERAL INFORMATION FORMS

APPENDIX B: APPLICATION AND NCC REQUEST BUDGET FORMS

APPENDIX C: GRANTEE ACTIVITY REPORTING FORMS

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 Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave.NW, IR-6526, Washington, DC 20224. Do not send grant application forms to this address. Grant applications 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 viiLOW INCOME TAXPAYER CLINIC

DETAILED TABLE OF CONTENTS

I INTRODUCTION

A Mission Statement B What Is Included in Publication 3319?

C Contacting the Program Office D LITC Program Highlights E LITC Program Overview i History of the LITC Program ii Overview of IRC § 7526

II QUALIFICATIONS FOR FUNDING

A Basic Eligibility Requirements B Core Term Definitions C Matching Funds D Grant Period E Start-Up Expenses F Fees

III OPERATING A CLINIC

A Standards of Operation—General i Staffing ii Infrastructure and Resources a Taxpayer Representation b Physical Location c Access d Training e Tax Library f Annual LITC Conference iii Outreach and Community Partnerships a Focused Outreach b Publicity Materials c Community Partnerships d Identifying Successful Outreach Strategies iv Networking and Mentoring a Networking b Mentoring c Technical Assistance v Confidentiality a Disclosure b Training Materials c Media Requests vi Volunteers a Quality Assurance Process b Pro Bono Panel c Referrals of Taxpayers to Volunteers vii Recordkeeping and File Management a Grant Expenditure Records b Client Records c Case Management System d Recommended Back-Up File System e Security f Records Retention viii Tax Compliance and Federal Debts ix Name or Organizational Status Changes x Client Satisfaction

B Standards of Operation—Taxpayer Services i Representation a Low Income Taxpayers and the 90/250 Rule b Poverty Guidelines c Definition of Income for Purposes of the 90/250 Requirement d Definition of Family Unit e Amount in Controversy Limit f Participation in the United States Tax Court Clinical Program g Student Representation ii Education iii Advocacy iv Preparing Tax Returns and ITIN Applications

IV COMPLIANCE REQUIREMENTS

A Uniform Administrative Requirements B Lobbying Restrictions C Civil Rights Compliance i Civil Rights Reviews ii Civil Rights Division Contact Information

D Other Assurances and Certifications i Trafficking Victims Protection Act of 2000 ii Federal Funding Accountability and Transparency Act (FFATA) (2 CFR Part 170) iii Certain Criminal Law Violations iv System for Award Management, Employer Identification Number, and Unique Entity

Identifier Requirements v Association of Community Organizations for Reform Now vi Other Applicable Laws and Regulations E Cost Principles

TABLE OF CONTENTS

F Matching Funds Requirement i Valuation of Matching Funds ii Volunteer Services Generally iii Volunteer Services of a Qualified Representative iv Documentation of Matching Funds Sources

G OMB Audit Requirement

V APPLICATION AND SELECTION PROCESSES

A Completion and Submission of the LITC Grant Application Package B Completion and Submission of a Non-Competitive Continuation (NCC) Request C Evaluation and Screening i Eligibility Screening ii Evaluation Process a Technical Evaluation b Program Office Evaluation

D Selection of Grant Recipients E Notice of Award F Application Amendment Package

VI POST-AWARD REQUIREMENTS OF GRANTEES

A General Compliance B Notification Requirements i Significant Changes in LITC Program Activities ii Changes in LITC Contact Information iii Changes in Program Plan or Budget iv Non-Use of Grant Funds v Withdrawal from LITC Program

C Managing Grant Funds i Accessing Grant Funds ii Maintaining Funds in an FDIC Insured Bank iii Interest on Advances of Grant Funds

D Reporting Responsibilities i Interim Reports ii Year-End Reports

VII LITC PROGRAM OFFICE RESPONSIBILITIES

A General Responsibilities B Structure C Administration D Assistance E Oversight F Site Assistance Visits

G Suspension or Termination of a Grant i Grounds for Suspension or Termination ii Notification to Grantee iii Reconsideration Request iv Post-Termination Responsibilities v Close-Out

APPENDIX A: APPLICATION AND NCC REQUEST GENERAL INFORMATION FORMS

APPENDIX B: APPLICATION AND NCC REQUEST BUDGET FORMS

APPENDIX C: GRANTEE ACTIVITY REPORTING FORMS

1LOW INCOME TAXPAYER CLINIC

I INTRODUCTION

A Mission Statement

Low Income Taxpayer Clinics (LITCs) ensure the fairness and integrity of the tax system by provid-ing pro bono representation to taxpayers in tax disputes with the IRS, educating low income tax-payers about their rights and responsibilities, conducting outreach and education to taxpayers who speak English as a second language (ESL), and identifying and advocating for issues that impact low income taxpayers.

Important Dates for 2016 LITC Grantees

Application period May 1—June 15, 2015

Program Office review and evaluation June—October 2015

Notification of selection/non-selection November 2015

LITC Grantee Conference December 7—December 10, 2015

Grant year January 1, 2016—December 31, 2016

Interim report due August 1, 2016

Year-End report due March 31, 2017

B What is Included in Publication 3319?

Publication 3319 outlines eligibility requirements for Low Income Taxpayer Clinic matching grants and instructions about how to apply for a matching grant under Internal Revenue Code (IRC) § 7526. This publication contains:

` Eligibility requirements, including mandatory assurances and certifications;

` Standards of operation;

` Post-award requirements;

` Application forms and instructions; and ` Reporting forms and instructions.

This publication, including the accompanying Appendices, should be retained for future reference.

C Contacting the Program Office

Potential applicants may direct questions concerning the LITC Program or the application process to the LITC Program Office via:

` Email:

LITCProgramOffice@irs.gov;

` Phone:

202-317-6659 (not a toll-free number); or mailto:LITCProgramOffice@irs.gov

2 LOW INCOME TAXPAYER CLINIC

` Mail:

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

Current grantees should direct questions about reporting or program requirements directly to their assigned Advocacy Analyst.

Questions regarding use of grantsolutions.gov may be directed to the Program Office via email at Beard.William@irs.gov.

D LITC Program Highlights

The staff of the LITC Program Office works diligently to reduce the burden on grantees and allow them to devote more resources to representing, educating, and advocating for low income and ESL taxpayers. Applicants and grantees should be aware of the following changes this year:

` Providing Controversy and ESL Services under a Single Grant Award—Beginning in grant year 2016, the LITC Program will no longer award discrete funding amounts to grantees to operate separate Controversy and ESL programs. Instead, all LITC grant recipients will be required to operate unified programs that provide direct representation in tax controversies with the IRS on behalf of low income taxpayers and use education and outreach efforts to make representation and consultation services available to ESL taxpayers.

` Special Instructions for Preparing Form 13424—Due to delays with updates to Grantsolutions.

gov, applicants must use the version of Form 13424, Low Income Taxpayer Clinic (LITC) Application Information (Rev. 8-2014) included in Appendix A and follow the instructions provided therein when preparing and submitting the information sheet as part of an application or Non-Competitive Continuation (NCC) request for grant year 2016. Applicants should enter the total amount of federal funds requested for grant year 2016 in the box marked “Controversy” and leave the box marked “ESL” blank.

` Special Instructions for Preparing Form 13424-J—Due to delays with updates to Grantsolutions.gov, applicants must use the version of Form 13424-J, Detailed Budget Worksheet (Rev. 5-2013) included in Appendix A and follow the instructions provided therein when preparing and submitting a budget as part of an application or Non-Competitive Continuation (NCC) request for grant year 2016. Applicants must complete the first three columns only, leaving any columns under the ESL category blank.

` Elimination of Form 13424-I—Applicants are no longer required to complete and submit Form 13424-I, LITC Tax Information Authorization. In lieu of the Form 13424-I, the necessary information will be captured on other forms already included in the application package. See the instructions to Standard Form 424, Application for Federal Assistance (specifically the Applicant Federal Debt Delinquency Explanation).

mailto:Beard.William@irs.gov

3LOW INCOME TAXPAYER CLINIC

INTRODUCTION

` Elimination of Standard Form LLL—Applicants are no longer required to complete and submit Standard Form LLL, Disclosure of Lobbying Activities.

E LITC Program Overview i History of the LITC Program

As part of the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998, Congress authorized funding for the LITC grant program. The program is designed to provide 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, and to educate individuals for whom English is a second language about their rights and responsibilities as taxpayers.

The IRS created the LITC Program Office in 1999 to provide guidance, assistance, and oversight to LITC grantees and prospective applicants. The Director of the LITC Program Office reports directly to the National Taxpayer Advocate.

The IRS is authorized to award grants to provide matching funds for the development, expan-sion, or continuation of qualified LITCs. In 1999, grants were awarded to 34 grantees. For the 2015 grant year, there are 132 grantees.

ii Overview of IRC § 7526

IRC § 7526 authorizes the Secretary of the Treasury to award matching grants of up to $100,000 per year to qualifying organizations that represent low income taxpayers involved in controversies with the IRS and educate ESL taxpayers about their rights and responsibilities as taxpayers. Representation, education, and advocacy are the primary functions of LITCs.

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 III.B.i.b, Poverty Guidelines, of this publication.

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. New applicants and current grantees whose single year or multi-year grant period will end on December 31, 2015, must submit an application via grants.gov. Current grantees who will be entering the second or third year of a multi-year grant in 2016 must submit a Non-Competitive Continuation request via grantsolutions.gov. See section V, Application and Selection Processes, of this publication.

With respect to multi-year grant awards, the second and third years will be funded subject to satisfactory performance, compliance with grant terms, and availability of appropriated funds.

All grant funds awarded to a grantee must be used for the program specifically authorized in the notice of award.

http://www.grants.gov

4 LOW INCOME TAXPAYER CLINIC

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 subpara-graph (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 ap-plicable court.

(c) Special rules and limitations.

(1) Aggregate limitation. Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $6,000,000 per year (exclusive of costs of administering the program) to grants under this section.

(2) 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 tax-payers in the geographical area for whom English is a second language;

5LOW INCOME TAXPAYER CLINIC

INTRODUCTION

(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 quali-fications 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 LOW INCOME TAXPAYER CLINIC

II QUALIFICATIONS FOR FUNDING

A Basic Eligibility Requirements

To receive an LITC grant, an organization must represent low income taxpayers in controversies with the IRS and educate 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).

NOTE: Beginning in grant year 2016, all grantees must provide controversy representation services to low income taxpayers. The LITC Program will no longer award grants to organizations that provide only education and outreach to the English as a Second Language (ESL) community.

At least 90 percent of the taxpayers represented must have incomes that do not exceed 250 percent of the federal poverty level 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 proce-dures in Tax Court (currently $50,000) (see section II.B.i.a, Low Income Taxpayers and the 90/250 Requirement).

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 state or local tax authority concerning a related tax matter.

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.

NOTE: Applicants must have a current registration with the System for Award Management, an Employer Identification Number, and a Data Universal Identifier Number. For more information, see IV.D.iv, System for Award Management, Employer Identification Number, and Unique Entity Identifier Requirements.

7LOW INCOME TAXPAYER CLINIC

QUALIFICATIONS FOR FUNDING

B Core Term Definitions

Amount in controversy means the amount at issue for each tax year for which the LITC is rep-resenting the taxpayer. The amount includes the tax liability in dispute for a tax year, plus any related additions to the tax, additional amounts, and penalties imposed. Interest is generally excluded from the amount in controversy, unless the amount of interest is disputed independently from the associated tax liability. For example, in the collection context (e.g., notice and demand, notice of determination under IRC § 6330), interest is always in dispute and is therefore included in the amount in 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.

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 inform 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.

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 between an individual and the IRS concerning the determination, collection, or refund of any tax, penalties, additions to tax, or interest under the Internal Revenue Code, and includes any proceeding brought by the taxpayer under Title 26. In representing a tax-payer in a controversy with the IRS, an LITC may also need to represent the taxpayer in a contro-versy with a state or local tax agency concerning the same or related tax matter. A controversy includes a dispute related to the tax provisions of the Affordable Care Act. A controversy does not include a criminal tax matter, but may include certain civil actions arising under the Internal Revenue Code, for example those arising under IRC §§ 7431—7435.

Low income taxpayer means an individual whose income does not exceed 250 percent of the pov-erty level, as determined in accordance with official guidance published by the federal government.

Net earnings from a sole proprietorship, a single shareholder S-corporation, or a single member LLC are included in income for purposes of determining if a taxpayer is low income. However, a business entity is not a low income taxpayer eligible for LITC representation, even if an owner, partner, shareholder, beneficiary, or member of the business entity is an individual whose income does not exceed 250 percent of the poverty level.

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

8 LOW INCOME TAXPAYER CLINIC

and circumstances. A fee does not include reimbursement for actual costs incurred (photocopies, court costs, and expert witness fees, for example).

Pro bono panel means a group of qualified representatives who do not charge a fee for representing or advising low income or ESL taxpayers.

Program to inform means the conduct of an activity intended to educate individuals for whom English is a second language (ESL) about their rights and responsibilities under the Internal Revenue Code. These programs may be made available to low income taxpayers as well as ESL taxpayers. Such activities include, but are not limited to, conducting group presentations or work-shops describing federal taxpayer rights and responsibilities, publishing and distributing informa-tion about federal tax issues and taxpayer rights, and consulting one-on-one with taxpayers.

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 or an individual admitted to practice before the applicable court where the controversy with the IRS will be adjudicated. A student working under the super-vision of a qualified representative is a qualified representative if the Director of the LITC Program Office has authorized that student to practice before the IRS pursuant to 31 C.F.R. Part 10 (Treasury Department Circular No. 230) and Delegation Order 25-18 (Rev. 1), or the applicable court has authorized the student to appear pursuant to rules of the court. An unenrolled return preparer who can practice before the IRS based upon return preparation is not a qualified representative.

NOTE: For more information on student representation of taxpayers, see section III.B.i.g, Student 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 contro-versy. Fact finding or advice alone is not representation.

C Matching Funds

The LITC Program is a matching grant program. All grantees must provide matching funds on a dollar-for-dollar basis for all federal funds received from the LITC Program. Only funds that are used in direct support of the LITC Program qualify as matching funds.

9LOW INCOME TAXPAYER CLINIC

QUALIFICATIONS FOR FUNDING

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 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.

NOTE: 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 IV.F, Matching Funds Requirement.

D 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 before received an LITC grant are eligible to receive only a single-year grant award; experienced grantees may be awarded a multi-year grant.

Awarding of multi-year grants is at the discretion of the LITC Program Office. Thus, applicants that apply for a multi-year grant may be awarded a single-year grant.

Grantees awarded a multi-year grant must submit a Non-Competitive Continuation (NCC) request in the second and third year of the grant period for continued funding. Multi-year grantees 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. Funding may be increased or decreased at the discretion of the LITC Program Office and is subject to the availability of funds annually appropriated for the LITC Program.

E Start-Up Expenses

Start-up operations qualify for grant funding. An applicant may be awarded an LITC grant for the full grant year although it anticipates it will not begin offering representation services 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

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is awarded. Such applicants still must satisfy the statutory matching funds requirement during the year covered by the grant and must meet all reporting requirements to 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.

F Fees

IRC § 7526 provides that a clinic must not charge more than a nominal fee for its services, although reimbursement of actual costs incurred (e.g., photocopying and court costs) is permitted. If a clinic charges a fee, it must charge that same fee to all taxpayers, regardless of the services being sought. For example, a clinic may not charge a separate or additional fee (even if it is nominal) to prepare a tax return or a collection information statement. 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 served, the goal of the Program is not being achieved and that amount is not nominal.

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III OPERATING A CLINIC

A Standards of Operation—General

The LITC Program Office has developed baseline standards of operation for LITC grant recipients.

The standards ensure that all LITCs provide consistent and quality service to low income and ESL taxpayers.

i 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, but not limited to:

` internal controls;

` management of federal, state or local grant funding;

` budget administration and procurement; or ` the equivalent.

Clinic Director—The Clinic Director is a staff member who has overall management responsibil-ity 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 re-ports, 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’s (LTA) office.

ii Infrastructure and Resources a Taxpayer Representation

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.

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b 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 selected to receive LITC grant funds.

c Access

To help ensure taxpayers have convenient access to low-cost representation, grantees are strongly encouraged to provide a toll-free number. Grantees may use grant funds to operate a toll-free number.

d 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.

The QTE, QBA, and Clinic Director are encouraged to attend continuing professional educa-tion programs sponsored by the IRS and professional organizations.

e Tax Library

LITCs must have convenient access to an adequate tax library and research materials, includ-ing the current version of the Internal Revenue Code and related Treasury Regulations in hard copy or electronic format.

f Annual LITC Conference

LITCs awarded funding for the upcoming grant year must attend the annual LITC conference.

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 of part of the conference (see below). The QBA is not required to attend the conference, but may choose to attend.

NOTE: For all new grantees, the Clinic Director and the QBA must attend a mandatory conference call held prior to 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 December conference. The request should identify the criti-cal 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.

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OPERATING A CLINIC

If a grantee wishes to send more than two staff members to the conference, it must submit a written request to the Director of the LITC Program Office no later than two weeks prior to the conference.

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, however, that grant-ees may not use LITC grant funds or matching funds to pay the cost of more than two attendees.

NOTE: For more information on using grant funds to attend the annual LITC conference, see section IV.E, Cost Principles.

iii Outreach and Community Partnerships a Focused Outreach

LITCs are responsible for developing an outreach plan to effectively publicize the clinic and its services to low income taxpayers and ESL taxpayers. Outreach activities may involve direct communication with taxpayers or be accomplished indirectly through other organizations or groups that serve low income and ESL taxpayers. LITCs are encouraged to identify particular linguistic populations, geographic service areas, or other segments of the low income tax-payer community in which to focus outreach efforts. Outreach plans should be completed in advance of the start of the period during which representation and other assistance will be offered.

Grantees must identify an audience to whom educational and outreach activities will be directed. LITCs should advertise and promote themselves as providing education and infor-mation to help ESL individuals understand the federal tax system. For example, an LITC could advertise and conduct a community meeting to acquaint ESL individuals with their rights and responsibilities under the federal tax system.

b Publicity Materials

LITCs may use a variety of means to publicize their services, including brochures, flyers, plac-ards 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 in their geographic area.

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

BEST

PRACTICE:

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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 in-come and ESL taxpayers.

Core services in federal tax controversy cases include representing taxpayers in examina-tions, appeals, collection matters, and litigation. 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 identifica-tion number (ITIN) processing.

Core services to educate taxpayers consist of presentations for ESL taxpayers about their taxpayer rights and responsibilities, and identification of topics that clinic staff can address during a presentation such as:

` tax recordkeeping, ` how to choose a tax return preparer, or ` collection alternatives.

All publicity materials should mention that the LITC can provide consultations or advice to individual taxpayers.

Publicity materials may not advertise tax return preparation services or ITIN preparation as-sistance. LITCs are permitted to provide tax preparation services only in two limited contexts:

i if necessary to resolve a controversy:

ii as an ancillary part of ESL education, See section III.B.v, Preparing Tax Returns and ITIN Applications.

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

Brochures, flyers, or other clinic information distributed in IRS offices must contain language to indicate the following two key principles:

i Although the grantee receives funding from the IRS, the clinic, its employees, and volunteers are not affiliated with the IRS; and ii 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 logo or LITC logo in any advertising materials.

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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 or accountants 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 informa-tion 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 tax-payers with a copy of Publication 4134, Low Income Taxpayer Clinic List.

c Community Partnerships

LITCs should develop and maintain relationships with other community-based organizations that serve 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 estab-lish a framework for mutual referrals of taxpayers in need of services. In the application, the applicant must identify networks within the community or organizations with which it can work to reach its identified audience.

d Identifying Successful Outreach Strategies

LITCs should also implement a process that tracks how taxpayers seeking services learn about the program 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 seminar. The sign-in sheet also allows the clinic to keep track of the number of attendees served, without requiring individual names or signatures.

iv Networking and Mentoring a Networking

LITCs are encouraged to actively participate in a network with other clinics. Networks pro-vide 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 get training on federal tax practice and procedure. Networks can identify best practices and submit them to the LITC Program Office for sharing with other clinics to improve the overall quality of the LITC Program.

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b Mentoring

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.

c Technical Assistance

A technical assistance consultation is a discussion with a tax practitioner or other service provider designed to give brief advice about a tax issue.