Small business owners manage many responsibilities, and tax compliance is among the most demanding. For immigrant entrepreneurs, who may be learning English and the U.S. tax system at the same time, a single error can develop into a significant dispute with the IRS.
This year, student attorneys in WashU Law’s Low Income Taxpayer Clinic (LITC), directed by Professor Sarah Narkiewicz, represented several of these business owners. Each came to the clinic at a different stage of their dealings with the agency.
One small business owner with limited English proficiency had been handling a U.S. Tax Court case without representation. LITC student attorneys took on the case and worked closely with both the taxpayer and the IRS. Their efforts resulted in a settlement that reduced the taxpayer’s liability by more than $40,000.
An immigrant family that had previously operated a small business came to the clinic owing the IRS more than $27,000. After a careful review of the family’s circumstances and sustained advocacy on their behalf, the students resolved the balance, and the family received a refund of nearly $30,000.
Another business owner, who speaks English as a second language, first contacted the clinic about an error in how a return had been processed. Shortly after the students resolved that issue, the IRS opened an audit. The LITC team continued to represent the taxpayer and prepared a thorough response. At the close of the audit, the taxpayer’s liability had been reduced from more than $28,000 to $0, and the IRS issued a refund of nearly $2,000.
The clinic’s work extends beyond individual cases. Through community education, the LITC helps small business owners develop practices, such as maintaining thorough and well-organized records, that reduce the errors that often lead to audits. The goal is to reduce the number of taxpayers who need assistance in the first place.
