The Low Income Taxpayer Clinic (LITC) of The Legal Aid Society of Columbus (LASC) represents low-income taxpayers who are involved in tax controversies with the Internal Revenue Service (IRS) and related state and local tax issues. LASC represents clients with the following tax issues:
- Tax return(s) being audited or examined
- Tax debt you are unable to pay
- Lien on property
- Levy or wage garnishment
- Bill from the IRS for taxes from a joint return
- Earned Income Tax Credit
You may wish to contact LASC if you have experienced one of the following problems related to your taxes:
- Have you received a letter from the IRS telling you that your tax return is being audited or examined?
- Have you received a notice from the IRS that there is a deficiency in your taxes? Have you received a notice that the IRS plans to file a lien on your property or garnish your wages for past taxes?
- Have you received a bill from the IRS for taxes from a joint return for which it is unfair to hold you responsible?
- Have you received a letter from the IRS about your Earned Income Tax Credit (EITC or EIC)?
- Do you owe a tax debt that you are not able to pay?
Legal Aid does not generally provide tax return preparation services.
You may inquire about free tax return preparation by calling 2-1-1
Although the tax clinic is supported by IRS funding, this organization and participating practitioners are not affiliated with the IRS or the United States Government. The IRS does not endorse, warrant, or approve these organizations, their participating practitioners, or the services of this organization or participating organizations. The use or failure to use this organization or participating practitioners will not result in any special treatment from the IRS.
Click on the individual tabs below for more information:
The information on this page is NOT legal advice. If you are seeking representation or Legal advice, please contact the LASC Intake Department at 614-241-2001 or complete an online application. An attorney client relationship does not exist between you and the Legal Aid Society of Columbus.
April 15 is the standard tax return due date. Refunds are available as long as you file within 3 years of return filing deadline.
- To claim a 2012 tax return refund, you need to file by April 15, 2016.
- To claim a 2013 tax return refund, you need to file by April 15, 2017.
- To claim a 2014 tax return refund, you need to file by April 15, 2018.
Yes – but you have three years to claim a federal tax refund. If you do not claim it within 3 years after the return was due, you lose your refund.
If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury. For 2012 returns, the law requires that the return be properly addressed, postmarked and mailed by April 15, 2016. There is no penalty assessed by the IRS for filing a late return that qualifies for a refund.
Refunds due for past years will sometimes be held until taxpayers file other late tax returns. In addition, refunds will be applied to amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans. Individuals who do not file may lose more than refunds of taxes withheld or paid during 2003. Many low-income workers might not have claimed the Earned Income Tax Credit (EITC). Eligible taxpayers may get a refund when their EITC is more than what they owe in tax, but those who file returns more than 3 years late can only apply it toward the taxes they owe (if any). After 3 years, they would not be able to receive a refund if the credit exceeded their tax.
If you are in a hardship situation, you may be able to prevent the IRS from applying your refund to past-due taxes. The IRS will determine that you have a hardship situation if you: 1) Are facing eviction, foreclosure or utility shut off or 2) You can show that you cannot meet your basic living expenses and this is causing you harm. Have your returns prepared and call Legal Aid to speak to an attorney if this situation applies to you. You can also call the Taxpayer Advocate Service at 513-263-3260 or 1-877-777-4778. Please note: you cannot bypass the offset if you owe any other federal debt or a debt being collected through refund offset. Child support, social security overpayments and student loans are examples of debts that are often collected through refund offset.
The Low Income Taxpayer Clinic generally does not prepare tax returns. You can call 211 for a referral to free tax preparation services.
Of course, the best reason to file your tax return is that you are legally required to do so in most cases. Many taxpayers who know their refunds will be applied to other debts, are reluctant to file. However, it is always in your best interest to do so. When your refund is applied, it will reduce the amount of your outstanding debt. If you file past the refund deadline, that will not happen. Sometimes people are able to pay off their past due taxes, student loans and child support with their refunds alone. They are then free to claim refunds in future years and to move forward without those debts dragging them down.
Current and prior year tax forms and instructions are available at IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676). Taxpayers who need help can also call the IRS at 1-800-829-1040.
Injured Spouse ReliefIntroduction
- Did you file or did you plan to file a joint tax return with your spouse?
- Did you expect a tax refund?
- Did you receive notice that the IRS would keep your refund, OR has your tax refund already been kept?
- Was the tax refund kept to pay your spouse’s past due tax, child support, or federal debt, such as a student loan?
- You are not required to pay the past due tax debt. This means that the tax debt occurred before you got married OR your spouse is the only one who owes the debt.
- You reported income on the joint tax return. This means some or all of the income on the tax return belongs to you. Income includes wages and self-employment.
- You made and reported payments on the joint return. Payments include federal income tax withheld from your wages, estimated tax payments, or refundable credits, such as the earned income tax credit or additional child tax credit.
- If you have not filed your joint tax return, attach Form 8379 behind your return and enter “Injured Spouse” in the upper left corner of the return.
- If you have already filed your joint tax return, sign the back page of Form 8379 and send it to the IRS. Mail the form to the Internal Revenue Service Center where you lived when you filed the joint return. You can find this by going to IRS.gov and searching for “where to file.”
- Please include copies of all W-2 and 1099-R forms of both spouses showing income tax withheld. Attach the copies to Form 8379.
- You can get Form 8379 on the IRS website here: https://www.irs.gov/uac/Form-8379,--Injured-Spouse-Allocation
- It can take the IRS up to eight weeks to process the injured spouse claim.
Collection of Debt and InsolvencyIf a taxpayer’s debt is forgiven or cancelled, the amount cancelled is potentially taxable income by the IRS and needs to be reported on the Form 1040. However, there are many ways to get the forgiven debt excluded from income, one of which is through insolvency. A taxpayer is insolvent to the extent that before the cancellation, their liabilities were greater than the fair market value of their assets. Excluding cancelled debt due to insolvency is essentially a two-step process: determine insolvency through the insolvency worksheet and then filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness. Then when filing taxes, make a copy of both the worksheet and the form and keep them for your records, but only the Form 982 is submitted with the actual tax filing. If a cancellation of debt is for business debt, please consult a tax professional for further assistance, as the following information is meant for individual debt, such as homes, cars, or credit cards. IRS Publication Publication 4681 - Canceled Debts, Foreclosures, Repossessions, and Abandonments –The Insolvency Worksheet is on Page 9 of this publication Completing the Insolvency Worksheet To determine insolvency, an account of total liabilities and assets must be taken immediately before the debt was cancelled. So if the debt was cancelled on January 1, 2015, you should find out the liabilities and assets you had on December 31, 2014. Below are some reminders for finding the values for the more problematic categories. At the end of the worksheet subtract the assets from the liabilities. If the number is greater than zero, that is the amount to which the taxpayer is insolvent. So if a person has $50,000 in liabilities and $35,000 in assets, they are insolvent for $15,000. If a person has $35,000 in liabilities and $50,000 in assets, then they are not insolvent. Liabilities (debts):
- Credit card debt, mortgages, accrued or past due mortgage interest, car or vehicle loans, student loans, wage garnishment or liens, and court judgments: These lines of credit are best found by obtaining a credit report from one of the three major credit reporting agencies: Equifax, Experian, and Transunion. A person is entitled to a free credit report from each of the credit reporting agencies once a year. The report will also list closed lines of credit a person still owes money on, such as closed credit card accounts where a balance is still owed. You can access these reports online.
- Medical bills: Sometimes owed medical bills will appear on a credit report, but if the hospital or doctor does not report it, then there is no central way medical bills are reported. If you had health insurance at the time of the cancellation, then it is likely that your insurance company would be able to provide a complete record of how much money you owe in medical debt. If you were without insurance, it will be necessary to call and inquire to each individual healthcare provider you have visited to make sure you did not owe any money.
- Accrued or past due real estate taxes/utilities/child care costs: These are costs that generally must be tracked down individually. Real estate taxes are not on a credit report unless it has reached the level that tax agencies have placed a judgment or lien on the property. Therefore you would need to contact the relevant tax agencies for more information. Utility companies maintain a billing record that can simply be called to obtain. Professional child care services like daycare should also maintain billing records for you to obtain to determine owed amounts.
- Income tax: Owed income tax might show up as debt on a credit report, but the more reliable method is to directly contact the taxing agency. A taxpayer has the authority to ask about their respective tax liabilities from past returns. For this to work, all taxes should be filed. The IRS can be called at 800-829-1040. For Ohio residents, you can call 800-282-1780.
- Debts on stocks and investments: Contact the stock broker in charge of the margin account. They should be knowledgeable of any debt owed.
- Business and other debt: These are entirely reliant on the taxpayer’s own records to determine debts.
- Real property: Property value can be found for any home or business on the County Auditor’s website.
- Cars and vehicles: The Kelley Blue Book value can be used to find the fair market value of any car or vehicle. The Blue Book value can be found online at www.kbb.com.
- Computers, household goods and furnishings, tools, jewelry, clothing, books, investments in coins, stamps and firearms, sports, photographic, and other hobby equipment: The objects in these categories are all goods that decrease or increase in value over time, but there is no central resource to track their value. Good options for determining value are auction appraisers or averaging the current going prices for similar objects on auction sites like eBay.
- Interest in retirement accounts, education accounts, and pension plans: For these accounts, when the insolvency worksheet is asking about interest, it does not mean interest accrued, they mean the total financial value of the account. Education accounts are normally managed through a bank, so contact the financial institution used. If the taxpayer’s retirement account is through a bank, contact them, but if through an employer, get in contact with them for their records. Same for pension plans. Federal and state employees should not forget to check with FERS for federal pension information, OPERS for their state pension, and public teachers should check with STRS.
- Interests in partnerships and investments in business: These are reliant almost entirely on the taxpayer’s own records, but if need be, hopefully the business or other partners are keeping records as well.
- Stocks, bonds, and other investments: If the taxpayer does not have their own records, contact the investment firm in charge of the account for records.
Collection Alternatives IRSIf you owe money to the IRS, you may be able to temporarily stop collection or enter into a manageable payment arrangement. Note, you sometimes must be or become current in your tax return filings for the IRS to work with you. This program does not generally prepare tax returns. Currently Not Collectible Status (CNC)
- The IRS will stop collection on your account if you are in a financial hardship situation. You are in a financial hardship if you cannot pay your reasonable living expenses with your income.
- To put yourself into CNC status, contact the IRS at the number shown on your bill or at 1-800-829-7650, explain your situation, and request that you be placed into CNC Status. They may require you to complete a Form 433-F, Collection Information Statement, concerning your financial situation. You can find the form at www.irs.gov.
- Things to consider:
- The IRS will keep tax refunds to which you may be entitled until the debt is paid.
- If your financial situation should change in the future, you would still have to pay the entire debt, along with the accrued interest and penalties.
- If you are placed in this status, the IRS may file a Notice of Lien regarding your account. The lien will impact your credit in a negative way.
- Contact the IRS at the number shown on your bill or at 1-800-829-7650, explain your situation and request an installment agreement.
- The IRS will generally accept any installment agreement that will fully pay your debt within 72 months. The minimum monthly payment for an installment agreement is $25 and there is a fee of up to $105.
- Things to consider:
- The IRS will keep federal and state refunds to which you may be entitled until your tax bill is paid in full.
- The IRS may file a Notice of Lien regarding your account, although it is less likely that they will do so if you voluntarily enter the payment agreement.
Collection Protections - State and LocalYour creditors, including the local and State tax departments cannot take money from the following:
- Welfare Check (OWF Or Disability Financial Assistance)
- Social Security Check (Possible Exception For Governmental Debt Such As Federal Student Loans And Some Federal Taxes)
- SSI Check (Supplemental Security Income)
- Unemployment Compensation Check
- Veterans Administration Check
- Other Retirement Income
- Wages of up to 30 times the Federal minimum wage per week (Currently 30 * $7.25 = 50)
- A place of residence (up to $132,900)
- Cash on hand (up to $450, unless the cash comes from one of the exempt sources listed on the previous page)
- Most household goods, furniture, appliances (up to $12,250 total and individual goods cannot exceed $575)
- Retirement benefits
- Wages (up to approximately $940/month)
- A car, if it is worth less than $3,675 or if its value, over and above what you owe on it, is less than $3,675
Request Penalty Abatement From State of OhioThe State of Ohio charges penalties or fees when you file a late tax return or if you do not pay your taxes on time. They do have a process to request that they “abate” or remove those penalties for good cause. This is called a “Request for Penalty Abatement.” HOW TO REQUEST PENALTY ABATEMENT FROM THE STATE OF OHIO
- You need to pay the underlying tax that you owe to the State of Ohio before penalties can be abated. To find out how much you need to pay, call the Attorney General at 888-301-8885. Ask for a breakdown of how much you owe. For each year that you owe ask them to tell you the amount you owe in tax, the amount of interest, the amount of penalties and the collection fees.
- After you have paid the tax and the interest, write a letter to the Attorney General’s Office. The Attorney General will forward the request to the Department of Taxation. The Department of Taxation will make the decision about whether they make the adjustment.
- Before you send the request, make sure you are up to date with your filing requirements.
- A sample letter is accessible below. There are a list of items that, IF TRUE, you may want to include in your letter. Of course, everyone’s circumstances are different so feel free to write your own explanation, keeping in mind that the Department of Taxation will likely consider the following factors when making their decision:
- Your prior history of filing and paying taxes on time or making every effort to do so.
- Any wrongdoing or mistakes on your part that led to the debt.
- Your circumstances at the time the debt was created.
- Your current circumstances including:
- Financial hardships you are facing
- Health problems of you and your family
- Your current income
- Disability status
- Whether or not you have the assets to pay
- Once you have written your letter, send it via certified mail to the address on the Sample letter. Include supporting documentation if you have any (for example, your Social Security Award letter or other disability determination, verification of your family member’s or your illness, etc.).
- KEEP AN EXACT COPY OF EVERYTHING YOU SEND IN A SAFE PLACE.
- The Ohio Attorney General will get back to you in about 60 days. If they don’t, call the number above for an update. There is a chance that you will have to submit everything again. If you do, make another complete copy for your records.
- The Department of Taxation may abate all, some or none of the penalties. There is no appeal but you can always submit the request again if your circumstances change.
- If they do abate your penalties and release any lien related to your tax debt, you will receive a copy of the release that you need to file with your local recorder’s office. You will have to pay a small filing fee.
- If you are facing collection efforts during or after this process, remember to call Legal Aid’s Intake Line at 614-241-2001 to ask for information about handling collections and which of your income and assets may be exempt from collection.
Tax Filing Resources
- The Legal Aid Society of Columbus does not generally provide tax return preparation services. You may inquire about free tax return preparation by calling 2-1-1
Frequently Used Tax Forms
- Form 2848: This form is used to authorize an eligible individual to represent a tax client before the IRS. irs.gov/pub/irs-pdf/f2848.pdf
- Form 433f: This form is used to document the taxpayers' income and expenses. irs.gov/pub/irs-pdf/f433f.pdf
- Form 4506T: This form is used to request transcripts of tax returns. irs.gov/pub/irs-pdf/f4506t.pdf.
- Ohio Declaration of Tax Representative TBOR-1: This form is used to allow a representative to get tax information from the Ohio Department of Taxation. http://www.tax.ohio.gov/portals/0/forms/real_property/miscellaneous/TBOR_TBOR1.pdf
- Internal Revenue Service: irs.gov
- Internal Revenue Service Local Office*: 200 N. High St. Columbus, Ohio 43215 (614)280-8691
- IRS Taxpayer Advocate Service- Use this service when you are trying to resolve issues with the IRS but it has not worked OR if you are in a financial hardship situation. Their website has great explanations of a variety of tax issues. phone: (513) 263-3260 website: http://www.taxpayeradvocate.irs.gov/
- IRS Free Tax Return Preparer Finder Tool: https://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers
- Publication 594 "IRS Collection Process": irs.gov/pub/irs-pdf/p594.pdf
- Tax Collection and Payment Alternatives: taxpayeradvocate.irs.gov/Individuals/Tax-Collection-And-Payment-Alternatives