February 16, 2021

student preparing taxes for a clientAn elderly taxpayer with serious health issues came to Columbus Community Legal Services to seek help from the Low Income Taxpayer Clinic (LITC) after she received a notice from the IRS. The IRS notice stated that the taxpayer owed over $260,000 in unpaid taxes and that they were going to levy her bank accounts and her Social Security benefits to satisfy this tax liability. She had no idea why she had such a large tax bill. The taxpayer needed swift legal action to protect her against an imminent IRS levy.

After student attorneys in LITC conducted thorough research, it was determined the liability stemmed from an intrafamily property dispute. Unbeknownst to the taxpayer, the mortgager had foreclosed on the property in question. The proceeds from the sale of the property were reported to the IRS as taxable income to the taxpayer. The student attorneys quickly submitted an Audit Reconsideration to the IRS. It was argued that since the taxpayer never received any of the proceeds from the sale of the house, through the foreclosure process, this sale should not be considered a taxable event for the taxpayer.

Nora Senyk ’17, Supervising Attorney, shared, “The Low Income Taxpayer Clinic is happy to report that the IRS agreed with our argument, zeroing out the $260,000 federal tax liability from the taxpayer's account."