Published: | Last Updated: February 8, 2024
NTA Blog: March Is IRS’s National Settlement Month for Unrepresented Taxpayers With a Tax Court Docketed Case
The IRS Office of Chief Counsel (Chief Counsel) has chosen March 2021 as National Settlement Month. Virtual Settlements Day (VSD) events will be conducted by all Chief Counsel offices across the country. The nationwide event will serve taxpayers in all 50 states and Washington, D.C. The main goal of settlement days is to connect taxpayers with a Low Income Taxpayer Clinic (LITC) or a pro bono attorney to assist in settlement discussions to resolve the case. These events assist unrepresented taxpayers whose cases are docketed in the United States Tax Court by making available free or low-cost assistance and focusing on resolving their Tax Court cases early without the necessity of a trial. Many LITCs across the country will be participating in these VSD events.
One of many services LITCs provide to low-income taxpayers is providing representation before the IRS and in court. LITCs provide services for free or a nominal fee. Services can also be provided in languages other than English. In response to the pandemic, LITCs quickly moved their operations to virtual platforms to provide services and are available to assist eligible taxpayers.
LITCs previously partnered with Chief Counsel to hold VSD events across the country that allowed hundreds of taxpayers to resolve their Tax Court cases, even when the Tax Court and much of the IRS had suspended operations in response to the pandemic. See IRS news releases IR-2020-87 and IR-2020-112. VSD events allow Chief Counsel employees to use electronic or telephone means to meet with taxpayers and pro bono volunteers who are physically remote. VSDs provide an additional benefit for taxpayers as there are no geographic limitations for participation and it provides an effective means of having IRS, LITC and pro bono volunteer resources available remotely.
Why should taxpayers participate?
A large percentage of docketed Tax Court cases are filed by taxpayers representing themselves. VSDs provide a good opportunity for these individuals to discuss their case with an IRS attorney and request assistance from the LITC or pro bono volunteers to advise them on the law, what they need to do to support their case or possible reasons to consider settlement. Having the ability to provide the documentation and facts before trial may lead to a successful resolution of the case which would eliminate the need to appear in court and result in finality on the issue(s) in the case. Even if the parties cannot resolve the case, it provides taxpayers an opportunity to learn what additional information needs to be presented to the court, and if they need to provide additional facts or witnesses to succeed. With the help of the LITC or pro bono volunteers, taxpayers will learn more about their case and potentially what they need to do to resolve the issues. VSDs also provide an opportunity for the taxpayer to speak with IRS Collection representatives about collection alternatives like an installment agreement to establish a payment plan once a settlement is reached.
Taxpayer Advocate Service employees also participate in VSDs to assist taxpayers with tax issues attributable to non-docketed years. Local Taxpayer Advocates and their staff can work with and inform taxpayers about how TAS may assist with other unresolved tax matters or after the Tax Court matter is concluded. If the taxpayer experiences difficulties surrounding collections, TAS can also assist with collection alternatives.
LITC services are free or low cost for eligible taxpayers
Generally, taxpayers whose income is below 250 percent of the federal poverty guidelines may qualify for assistance. Although LITCs receive partial funding from the IRS, LITCs, their employees, and their volunteers are independent of the IRS. Each LITC determines whether prospective clients meet income guidelines and other criteria before agreeing to represent them or provide consultation services. Taxpayers seeking LITC services can view the Low Income Taxpayer Clinic Income Eligibility Guidelines. Taxpayers do not have to fall below the income threshold to receive assistance at a VSD.
To find an LITC in your geographic area, please see the “Find your local clinic” search tool at the bottom of the LITC page at: www.taxpayeradvocate.irs.gov/litc or download Publication 4134. (Please note the location listed is the main office and many LITCs have additional office locations. Please call the phone number listed to find out about additional locations.)
Additional Information About National Settlement Month for LITCs and Pro Bono Volunteers
LITCs can contact their local Chief Counsel offices about the event for their area. If you need additional information reach out to Chief Counsel’s Settlement Day Cadre, or contact Peter T. McCary by email or at (904) 661-3035 (not a toll-free call).
Pro bono volunteers are encouraged to contact Meg Newman with the American Bar Association. In addition to local events, volunteers are being matched to serve where there are gaps in service.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.