The Internal Revenue Service today announced it will accept supplemental applications for Low Income Taxpayer Clinic (LITC) matching grants from all qualified organizations. The application period will run from March 7, 2023, to April 18, 2023. The funding and the period of performance for the supplemental grant will be July 1, 2023, to Dec. 31, 2023.
The Consolidated Appropriations Act, 2023, doubled aggregate LITC grant funding from $13 million to $26 million and doubled the maximum funding that can be awarded to any single clinic from $100,000 to $200,000, as compared with 2022. The 2023 appropriations act was enacted after tentative funding decisions for 2023 had been made based on 2022 funding levels. This supplemental grant period is intended to award the additional grant funds that have been made available.
Considering the additional funding, the LITC Program Office is expanding the types of qualified services an organization can provide. Specifically, under this expansion a qualified organization may receive a grant for the following activities:
- Referring low income taxpayers in a controversy with the IRS to a qualified representative instead of providing controversy representation directly to those taxpayers, or
- Operating a pilot program to inform English as a second language (ESL) taxpayers about their taxpayer rights and responsibilities without also providing controversy representation.
Thus, a qualified organization is one that:
- Ensures low income taxpayers have access to representation (by providing the representation either directly or indirectly through referral to a qualified representative) in controversies with the IRS, or
- Provides education to ESL taxpayers about their taxpayer rights and responsibilities.
Although a qualified organization is no longer required to provide both representation services and education services, organizations are still encouraged to provide both services if their resources allow. A qualified organization must not charge more than a nominal fee for its services (except for reimbursement of actual costs incurred).
Examples of a qualified organization include:
- A clinical program at an accredited law, business or accounting school whose students represent low income taxpayers in tax controversies with the IRS (and who, when necessary, refer taxpayers to qualified volunteers to provide representation when the students cannot do so).
- An organization exempt from tax under IRC section 501(a) whose employees and volunteers represent low income taxpayers in controversies with the IRS.
- An organization exempt from tax under IRC section 501(a) whose employees and volunteers refer taxpayers to qualified representatives to provide representation.
- An organization that operates a program to inform ESL taxpayers about their taxpayer rights and responsibilities.
- An organization exempt from tax under IRC section 501(a) that operates a program to inform ESL taxpayers about their taxpayer rights and responsibilities and functions as a service to refer taxpayers to qualified representatives for controversy representation.
The LITC Program Office intends to allow organizations in future grant years to satisfy the representation component of the LITC mission through the referral of taxpayers to qualified representatives. It intends to treat grants to organizations that provide education to ESL taxpayers without also providing controversy representation as a pilot for the remainder of the 2023 grant year and will then assess whether to continue that approach in future years.
Applicants that want to be considered for 2024 grant year funding will need to apply for a separate grant when the applicable application period opens on or about May 1, 2023.
Despite the IRS’s efforts to foster parity in availability and accessibility in choosing organizations to receive LITC matching grants, there remain communities that are underserved by clinics. The states of Hawaii, Montana, Nevada and North Dakota and the territory of Puerto Rico currently do not have LITCs. In addition, two states – Arizona and Florida – have LITCs that cover only part of those states. The counties not covered in those states are:
- Florida: Baker, Bradford, Citrus, Clay, Columbia, Dixie, Duval, Flagler, Hamilton, Hernando, Lafayette, Madison, Nassau, St. Johns, Sumter, Suwannee and Taylor.
- Arizona: Apache, Coconino and Navajo.
Although each application for the 2023 supplemental grant will be given due consideration, the IRS is particularly interested in receiving applications from organizations that provide services in these underserved geographic areas. For organizations that intend to refer low income taxpayers in controversies with the IRS to other qualified representatives, priority will be given to established organizations that can help provide coverage to underserved geographic areas. For the taxpayer education pilot program, special consideration will be given to established organizations with existing community partnerships that can swiftly implement and deliver services to the target audiences.
The LITC Program is a federal matching grant program administered by the Office of the Taxpayer Advocate at the IRS, led by National Taxpayer Advocate Erin M. Collins. Although LITCs receive partial funding from the IRS, LITCs, their employees and their volunteers operate independently from the IRS.
Applications must be submitted electronically on the Grants.gov page by 11:59 p.m. Eastern time on April 18, 2023. The funding number is TREAS-GRANTS-052023-002.
Copies of IRS Publication 3319, 2023 Grant Application Package and GuidelinesPDF, can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676). Note that some provisions of the Publication 3319 are now out of date. To assist organizations in applying for supplemental funding, the “Reminders and Tips for Completing Form 13424-M” is available on the LITC grants page; it includes details about the out-of-date provisions, including instructions for which questions an organization should complete if requesting funding only for the taxpayer education pilot program described.