Tax and Bankruptcy Practice Group

Message from the Tax and Bankruptcy Practice Group:

The diversity of our practice, our strong work ethic, respectful treatment of our clients, and prompt responsiveness to their needs all have contributed to ICLS's success. 

We successfully served more than 200 clients, through consultations, brief services, and full representation in 2018. The total decrease in tax liabilities, penalties, and interest was $93,508. This means we helped our clients avoid paying unjustified charges. A total of $20,829 was refunded to our clients, through our various efforts. In 2019, we expect to go beyond our previous numbers. Our primary focus is to assist clients that meet our income guidelines, however, if you are having a tax issue, we may be able to assist you. To see if you qualify, contact us at (888)245-4257.


Who are we?

  • Peter Lin-Tsai, Tax Clinic Director

  • Charles Appel, Bankruptcy Attorney II

  • Anna Sanchez, Tax Attorney I

  • Rudy De La Torre, Paralegal II

Types of Services

  • Bankruptcies and advice on resolving debt and collections.

  • Advise and represent taxpayers facing IRS and CA State tax issues through the Low-Income Taxpayer Clinic (LITC).

Low-Income Taxpayer (LITC)

The Low-Income Taxpayer Clinic (“LITC”) is the core of our group.

  • Funding is provided through LITC Office. The LITC Office is part of the Taxpayer Advocate Service (TAS), which is the advocacy arm of the IRS.
  • The purpose is to protect taxpayers’ rights by providing access to representation for low-income taxpayers so that achieving the correct outcome is not dependent on their ability to pay for representation.

What does the LITC do?

LITC provides consultation and representation to individual taxpayers for, but not limited to:

• Negotiations and Tax;

• Debt Settlement;

• Audits;

• Earned Income Tax;

• Credit Appeals;

• Litigation;

• Fraudulent Tax Preparation;

• Identify Theft;

• Liens and Levies;

• Innocent Spouse Relief;

• Collection Matter.

Our three areas of focus:

  • Provide pro bono representation on their behalf in tax disputes with the IRS;

  • Educate taxpayers about their rights and responsibilities as taxpayers; and

  • Identify and advocate for issues that impact low-income taxpayers.

In addition to representing taxpayers before the IRS and in U.S. Tax Court, the Tax and Bankruptcy Practice Group also carries out a number of educational presentations each year. In terms of advocacy, we track certain issues and if we see common themes, we notify the Taxpayer Advocate Service of the problem. 

In general, the Tax and Bankruptcy Practice Group services are limited to IRS tax controversies, although we assist clients facing state tax issues as well.

Bankruptcy

At this time, the Tax and Bankruptcy Practice Group is providing counsel and advice, as well as representing a handful of clients in Bankruptcy cases. 

 

ICLS is not a tax return preparation service. If you need tax returns prepared, please visit https://www.irs.gov/individuals/find-a-location-for-free-tax-prep to find a VITA location near you.

Table of Contents

  1. Recovery Rebate Tax Credit COVID-19
  2. Unemployment Income is Taxable, learn more

Recovery Rebate Tax Credit COVID-19

Inland Counties Legal Services may be able to assist you with questions or issues regarding the Recovery Rebate Tax Credit. However, for many of you who have filed tax returns for 2018 or 2019, you may not need to do anything. Below are some answers regarding your questions about the Recovery Rebate Tax Credit:

Who qualifies for the 2020 Recovery Rebate Tax Credit? 

All adults who have a valid Social Security number authorizing work who are not claimed as a dependent on another's tax return (for 2020). One exception to this general rule is if a married couple files jointly and one of the spouses is a member of the Armed Forces, then only one of the spouses has to have a valid Social Security number that authorizes work.

 

All children, grandchildren, brothers, sisters, stepbrothers, stepsisters, nieces, and nephews who live with the adult as a member of their household in the US for more than one-half of the year and who are under age 17 with a valid Social Security number authorizing work (as of December 31, 2020) ("qualifying children")(no limit to the number of "qualifying children").

 

How Much Will I Receive?

Adults will receive $1,200 per qualifying individual ($2,400 for married filing jointly).

 

Adults who have "qualifying children" (as described above) will receive an additional $500 each, without limitation.

 

Adults who are claimed as a dependent on another's tax return will not receive a Recovery Rebate Tax Credit.

 

Even if you owe the IRS back tax liabilities your Recovery Rebate will not be reduced by any outstanding debts. The Recovery Rebate is a refundable tax credit against 2020 federal income taxes so it is not gross income/taxable income for 2020.

 

However, the 2020 recovery rebate amount is reduced by $5 for every $100 above the following adjusted gross income thresholds: $75,000 for single (or married filing separately) taxpayers, $150,000 for married filing jointly taxpayers, and $112,500 for head of household taxpayers. 

 

When Will I Receive My Recovery Rebate?

The federal government wants to push out these payments ASAP.  Therefore, they plan to deposit monies into bank accounts per 2019 (or 2018) automatic refund deposit authorizations. The Secretary of the Treasury has indicated that these payments would start in about three weeks. If they do not have this information from your tax filings they will mail you a paper check to your last known address. Needless to say, the manual check mailing distribution process will be slower than any automatic deposits for a number of obvious reasons including that the IRS is significantly underfunded, it is the middle of a busy tax season and many, if not all, of its face to face services have been shuttered due to COVID-19. The law does not permit US Treasury to send out any advance Recovery Rebates after December 31, 2020.

 

What Amount Will I Receive Since My 2020 Income and Other Information Is Not Yet Complete?

The federal government wants to push out these payments ASAP. Therefore, they are going to estimate your Recovery Rebate amount based upon your last tax return on record (e.g., 2019 or if not then 2018 (but not 2017 or 2016, etc.). Accordingly, your advance Recovery Rebate payment will be based upon the information from your 2019 (or 2018) tax return on file including how much your adjusted gross income was and how many "qualifying children" (as defined about) you claimed. 

Unemployment Income is Taxable, learn more

TAS reached out to the LITC community to share some flyers to let taxpayers know that, if they receive unemployment benefits, they need to be aware that this is taxable income.