IRS Opens Grants for Low Income Taxpayer Clinics

IRS Opens Grants for Low Income Taxpayer Clinics

The Internal Revenue Service (IRS) has announced the opening of the application period for matching grants available to Low Income Taxpayer Clinics (LITCs). These clinics are essential in providing support to taxpayers who need assistance with tax disputes, education for non-English speakers, and advocacy for low-income individuals. Organizations eligible to apply for these grants can do so from April 22, 2024, through June 12, 2024. The grant period, requiring recipients to provide matching funds dollar-for-dollar, will run from January 1, 2025, to December 31, 2025.

Grant Details and Eligibility

Under Internal Revenue Code section 7526, the IRS provides matching grants to help develop, expand, or maintain LITCs. For every dollar of funding provided by the IRS, an LITC must match with a dollar of their own funding. The clinics are required to offer services either for free or for no more than a nominal fee, excluding reimbursement of actual costs.

For fiscal year 2024, Congress has allocated $28 million to fund these grants, with each clinic eligible for up to $200,000. Although the President’s FY 2025 budget proposes reducing overall LITC funding to $26 million, clinics can still request up to the $200,000 cap for the grant year 2025.

Services Offered by LITCs

LITCs are vital in ensuring the fairness and integrity of the tax system by providing:

• Pro bono representation: Assisting low-income taxpayers in resolving tax disputes with the IRS.
• Education for ESL taxpayers: Informing taxpayers for whom English is a second language about their rights and responsibilities.
• Advocacy: Addressing issues that specifically impact low-income and ESL taxpayers.

Expanded Eligibility and Special Programs

In an effort to increase access to justice, the IRS has removed the requirement for direct controversy representation. Clinics can now refer taxpayers to qualified representatives willing to handle cases on a pro bono basis. Furthermore, the IRS continues its ESL Education Pilot Program, initiated in February 2023, to educate ESL taxpayers about their tax rights and responsibilities without the need to provide tax controversy representation.

Areas of Focus

The IRS has identified several underserved areas where LITC services are particularly needed, including entire states like Hawaii, Kansas, Nevada, North Dakota, South Dakota, West Virginia, and significant portions of Florida, Montana, and the territory of Puerto Rico. Priority for grant approval will be given to organizations that can provide coverage in these underserved areas and those participating in the ESL Education Pilot Program with strong community partnerships.

While LITCs receive partial funding from the IRS, it is important to note that these clinics, their employees, and volunteers operate independently from the IRS. This independence is crucial for maintaining the integrity and impartiality of the advice and representation offered.

Organizations interested in applying for the LITC grants or seeking more information can refer to IRS Publication 3319, the 2025 Grant Application Package and Guidelines, available in PDF format on the IRS website.

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