Attorneys use pro bono tax work to fill the gap

Almost immediately after taking her seat on the Indiana Tax Court, Judge Martha Blood Wentworth saw the problem.

Flowing into her court were numerous pro se litigants who ended up getting their cases bounced because they had made a procedural error. They either did not have resources to hire an attorney or the amount of money at stake was too low to make getting a lawyer cost beneficial.
 

Adding to the dilemma were the materials available to help pro se litigants. Wentworth found pamphlets out of date, and sample petitions were so complicated that figuring out how to complete them is difficult.

That the pro se litigants made errors in presenting their cases is not surprising. However, while the motion to dismiss was warranted, the judge worried the individuals who got their cases tossed were going to lose respect for the government.

“You shouldn’t be barred from access to the court because of a procedural problem,” Wentworth said, adding just getting to her court

is an expensive and time-consuming proposition. “We need to have a full, robust system where people feel that they had their day in court.”

As chair of the Indiana Pro Bono Commission, Wentworth is drawing special attention to the need for pro bono tax assistance. She wants to make more and better information accessible to pro se litigants and possibly update some of the court rules, for example in the small claims provision, to make the process easier.

In addition, the judge wants to make legal counsel available for individuals who need help. She proposes assigning tax attorneys as mentors to law students or young attorneys which would increase the pool of available pro bono counsel. Moreover, a mentor program would provide the students and new attorneys with a chance to learn from experienced lawyers.

“I’m on a mission,” she said.

Every aspect of life

Many agree with Wentworth that there is a gap in pro bono services for tax issues. Joshua Abel, executive director of the Neighborhood Christian Legal Clinic, attributed the need to the economic recession which has depleted disposable income, making any kind of financial hit significant for families, as well as to the government tightening collection practices to cover revenue shortfalls.

Without assistance, Abel said people will get a bigger bill. In turn, they will then have less money to cover other household expenses like mortgages.

Determining the size of the need is difficult because much of the information is anecdotal. However, statistics from the Indiana Department of Revenue Tax Advocacy Office give some indication of how big the demand for help is.

Emerging from the worst of the recession, the tax advocacy office opened 3,055 new cases during fiscal year 2011. This is a sizable increase from the 2,738 cases created in fiscal year 2010 but the influx evaporated during fiscal year 2012 when 2,667 cases were created. These are typically cases that can’t be resolved through the normal collections process, such as hardship cases.

Tax problems are not just a headache for those with lower incomes. Tax questions arise when selling a company, closing a business or getting a divorce. It affects everybody in their personal lives.

“There is not anything you can do in life that doesn’t have a tax on it,” Wentworth said. “There is always a tax aspect no matter what.”

Blomquist

At the Indiana Coalition Against Domestic Violence, tax issues are often tied to personal safety. Individuals suffering in abusive relationships may have an even harder time leaving because a looming tax liability could crush them financially, explained Kerry Hyatt Blomquist, legal counsel for the organization.

Abusers sometimes continue the abuse through the financial system by forging a spouse’s signature on an income tax form, or using false Social Security numbers or falsely claiming children as dependents. The resulting tax liability from such actions can be so daunting that some survivors are actually opting to stay with the abuser for financial protection.

For federal tax issues, the Internal Revenue Service is approachable but a solution might not come quickly, Blomquist said. And, while forms and instructions are available online, reading through the IRS literature can be overwhelming and intimidating.

The best practice, according to Blomquist, is to make sure the survivor’s advocate is giving attention to tax concerns as well as the other issues.

Providing help

Wentworth pointed to property taxes as being especially unforgiving and an area where people need the most help. Attorneys at Faegre Baker Daniels LLP saw that need up close when they offered special assistance for homeowners.

Brent Auberry, partner at the firm, and Judy Ferber, paralegal, put together the first Homeowners Property Tax Clinic in January (see story on Pg. 1). In a two-hour period, the team of attorney volunteers helped about 22 Marion County homeowners either get a resolution or get a promise that a resolution would be coming shortly.

Auberry said the clinic was inspired by Wentworth and by the attorneys wondering how they could use their tax knowledge for pro bono work. Looking at the monthly decisions from the Indiana Board of Tax Review, Auberry consistently sees a lot of pro se parties which led him to conclude people can use assistance in the tax field.

Not only is Auberry considering doing the clinic again at some point, he would like to see similar tax clinics offered in other counties. The attorney knows the need is there, and he is confident other tax attorneys are open to providing their services pro bono.

Blomquist, too, has found the lawyers she contacts are very willing to assist Coalition clients.

“It’s not a particularly difficult thing to find pro bono help,” she said. “If I’m working with a person in a horrible tax situation, I’m confident a lot of attorneys will step up to help.”

However, an infrastructure or an established system for getting pro bono tax assistance is not always in place, she continued. Connecting with lawyers who can help in these specific instances is really done through word of mouth.

In Marion County, Blomquist said, finding a tax attorney to ask for volunteer aid is not difficult. It becomes a much more formidable task in rural counties where the resources are not as deep.

To start filling that gap, the Indiana State Bar Association Pro Bono Committee is part of an effort to develop a continuing legal education program to train attorneys on specific tax topics. Lawyers can attend the CLE for free in exchange for subsequently taking a tax case pro bono. The class has been scheduled for June 21 in Indianapolis. In addition, it will be webcast so attorneys across Indiana can participate.

Kuzma

Abigail Kuzma, chair of the Indiana State Bar Association Pro Bono Committee, noted that having a pro bono attorney advising the individual makes the process easier not only for the individual but also for the opposition and the judge. Similar to what Wentworth sees in her courtroom, Kuzma believes people who do not get the legal tax help they need will slip through the cracks.

“I think this is one of the areas where we know there is a need,” she said.•