IRS Tax News

IR-2023-99, May 9, 2023

WASHINGTON — The Internal Revenue Service today announced it will accept applications for Low Income Taxpayer Clinic (LITC) matching grants from all qualified organizations. The application period will run from May 8, 2023, to June 26, 2023. The funding and the period of performance for the grant will be Jan. 1, 2024, to Dec. 31, 2024.

Under Internal Revenue Code Section 7526, the IRS awards matching grants to qualifying organizations to develop, expand or maintain an LITC. For every dollar of funding awarded by the IRS, an LITC must have a dollar of match. An LITC must provide services for free or for no more than a nominal fee (except for reimbursement of actual costs incurred).

LITCs ensure the fairness and integrity of the tax system for taxpayers by:

• Providing pro bono representation to assist low income taxpayers in resolving tax disputes with the IRS;
• Educating taxpayers for whom English is a second language (ESL taxpayers) about their rights and responsibilities as taxpayers; and
• Identifying and advocating on issues that impact these taxpayers.

To achieve maximum access to justice for low-income and ESL taxpayers, the IRS has expanded the eligibility criteria for a grant by removing the requirement for eligible organizations to provide direct controversy representation. Representation may be provided by referring taxpayers to qualified representatives who have agreed to handle the referred cases on a pro bono basis.

In addition, pursuant to the ESL Education Pilot Program started in 2023 and continuing for 2024, a grant may be awarded to an organization to operate a program to inform ESL taxpayers about their rights and responsibilities under the IRC without the requirement to also provide tax controversy representation to low-income taxpayers. See IRS Publication 3319PDF for examples of what constitutes a "clinic."

Although the amount and timing of 2024 appropriations is not yet known, the Administration's 2024 budget request includes a continuation of LITC funding at $26 million and a $200,000 per award funding cap. Consistent with the budget request, the IRS will allow applicants to request grants up to $200,000. If Congress does not continue the LITC Program's funding at $26 million and/or the increased per award funding cap of $200,000, the IRS will adjust each grant recipient's award to reflect any limitations in place at that time.

Despite the IRS's efforts to foster parity in availability and accessibility when choosing organizations to receive LITC matching grants, there remain communities that are underserved by clinics. Currently, the states of Hawaii, Montana, Nevada and North Dakota and the territory of Puerto Rico do not have an LITC. In addition, two states – Arizona and Florida – have only partial coverage. The uncovered counties in Florida are Baker, Bradford, Citrus, Clay, Columbia, Dixie, Duval, Flagler, Hamilton, Hernando, Lafayette, Madison, Nassau, St. Johns, Sumter, Suwannee and Taylor. The uncovered counties in Arizona are Apache, Coconino and Navajo.

The IRS is particularly interested in receiving applications from organizations that provide services in these underserved geographic areas. Priority will be given to established organizations that can help provide coverage to underserved geographic areas. For the ESL Education Pilot Program, special consideration will be given to established organizations with existing community partnerships that can deliver services to the target audiences.

The LITC Program is 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 of the IRS.

Applications must be submitted electronically by 11:59 p.m. Eastern Time on June 26, 2023. The IRS is authorized to award multi-year grants not to exceed three years. For an organization not currently receiving a grant for 2023, an organization that received a single-year grant for 2023, or an organization whose multi-year grant ends in 2023, the organization must use Grants.gov to apply. For an organization currently receiving a grant for 2023 that is requesting funding for the second or third year of a multi-year grant, the organization must use GrantSolutions to apply. The funding number is TREAS-GRANTS-052024-001.

Copies of IRS Publication 3319, 2024 Grant Application Package and GuidelinesPDF, can be downloaded from IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676). To assist organizations in applying for funding, a "Reminders and Tips for Completing Form 13424-M" document is available on the LITC Grants page.

Questions about the LITC Program or grant application process can be addressed to the LITC Program Office by email at litcprogramoffice@irs.gov. Alternatively, you may contact Karen Tober by email at karen.tober@irs.gov.

More information about LITCs and the work they do to represent, educate and advocate on behalf of low-income and ESL taxpayers is available in IRS Publication 5066, LITC Program ReportPDF. A short video about the LITC Program is also available on the Taxpayer Advocate Service YouTube channel.

Join the LITC Program Office for one of two optional webinars where they will provide information about the LITC Program and the application process. See the details on the dates and times the webinars are available.