Last year, veteran John Cooper* chose to visit our Low-Income Taxpayer Clinic (LITC) when he realized he needed help sorting out his tax debt with the IRS. After sustaining an injury to his leg years earlier, John was honorably discharged from the Marine Corps. Since that time, thanks in part to his disability, John struggled to find steady work. He took odd jobs when he could find them, but the money he earned scarcely covered his rent and food bills. And although he filed his taxes each year, every dollar went to paying for his basic needs; he simply could not afford the taxes he owed. As John fell further and further into tax debt, penalties and fees continued to accumulate, compounding the steadily growing problem. A life-long man of faith, John made the decision to visit the Clinic before things got any worse. He says, “When I saw the name [Neighborhood Christian Legal Clinic] I said to myself, ‘This is great—attorneys I can trust!’”
Travis Bauman-Crane, one of the attorneys assisting with John’s case, says that John was in an untenable situation. Now only making $1700 per month from Social Security, John was at risk of having the IRS seize a portion of it to cover his debt. Travis says, “A lot of people don’t know this, but most creditors are exempt from being able to take Social Security … However, with the IRS, that’s not the case. Even with Social Security, the IRS can reach in and take it.” For John, such an action would have dire, even life-threatening consequences. Travis says, “[It was] going to put this disabled vet under a bridge.”
To protect him from such a future, the Clinic chose to prepare an Offer in Compromise (OIC) on John’s behalf, one of the more complex and time-consuming tasks undertaken by the LITC. Travis says, “We made a $20 offer that the IRS accepted without any question.” As part of the OIC, due to John’s insolvency, once he paid $20 to the IRS, the rest of his tax debt was forgiven.
The entire process took nearly two years, and Travis says there are many potential complications that can arise with an OIC. For instance, if someone fails to pay their taxes within a five-year window following the OIC, they immediately default and owe the entire amount that was forgiven. “We’re very aware and conscious of the people we do OICs for because we know that people will default on them,” Travis says. “We look at why they ended up owing this money to begin with.”
In John’s case, it was clear the situation was out of his control, and yet he continued to file his taxes every year rather than bury his head in the sand. He wanted to make the situation right again. And with the help of the LITC, it was.
For Travis, this kind of outcome makes his job worthwhile. “Here’s this veteran, disabled, can’t work, can’t even drive, has to take the bus everywhere. To see his excitement and to see God’s hand working through that was really fulfilling," he says. "And that’s one of the reasons why I do this job. I love seeing people see God’s hand work through their lives.”
For more information on the LITC, please visit our website.
*Name has been changed