Bill Overview
Title: Low-Income Tax Clinic Modernization Act
Description: This bill modifies provisions relating to clinics that provide free representation to low-income taxpayers in tax controversies before the Internal Revenue Service (IRS). It expands the definition of low-income taxpayer clinics to require clinics to provide technical advice and litigation support for its programs. The bill also increases the aggregate amount that the IRS may allocate for grants to such clinics and the annual amount of such grants.
Sponsors: Rep. Davis, Danny K. [D-IL-7]
Target Audience
Population: Low-income Individuals Needing Tax Assistance
Estimated Size: 3700000
- Low-income tax clinics provide assistance to low-income individuals facing tax issues typically with the IRS.
- Current income thresholds for accessing these clinics will help estimate the number of potential clients affected by this bill.
- The expansion of services to include technical advice and litigation support could increase the appeal of these clinics to more people.
- The increase in funding means more people may be able to receive services or the quality of services may improve.
Reasoning
- The policy targets low-income individuals facing tax issues, reaching approximately 3,700,000 people over 10 years.
- The expansion of services to technical advice and litigation support is likely to increase demand, as more comprehensive services will better address their needs.
- The budget allocation suggests a significant enhancement of existing services, potentially reaching more people and improving service quality.
Simulated Interviews
Part-time retail worker (Detroit, MI)
Age: 35 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- This expansion could help me resolve ongoing tax issues without worrying about legal costs.
- Having access to technical advice would relieve a lot of stress during tax season.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 6 | 4 |
Construction Worker (Phoenix, AZ)
Age: 42 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I often face tax issues due to seasonal income. More support could save me time and money.
- I’ve avoided dealing with the IRS out of fear. This could give me some peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 7 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Freelance artist (New Orleans, LA)
Age: 51 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 8/20
Statement of Opinion:
- I handle irregular income, so access to better tax advice would be a game-changer.
- Having legal support might mean fewer penalties and greater financial stability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 5 |
| Year 20 | 7 | 5 |
Unemployed (Jackson, MS)
Age: 28 | Gender: male
Wellbeing Before Policy: 2
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I’ve never filed taxes with this level of unemployment benefits; I need help.
- This program could prevent me from future tax trouble.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 2 |
| Year 2 | 5 | 2 |
| Year 3 | 6 | 2 |
| Year 5 | 7 | 2 |
| Year 10 | 6 | 2 |
| Year 20 | 4 | 2 |
Retired (Springfield, IL)
Age: 68 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- I'm worried about managing tax issues as laws change; expert advice would help.
- More support might help maximize my limited income without fear of IRS errors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 6 | 4 |
Part-time janitor (Boise, ID)
Age: 60 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 8.0 years
Commonness: 9/20
Statement of Opinion:
- Dealing with taxes after bankruptcy is tough; I'd appreciate more specialized help.
- More robust assistance could prevent me from future financial issues.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 7 | 3 |
| Year 20 | 5 | 2 |
Small business owner (Chicago, IL)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 11/20
Statement of Opinion:
- Understanding tax reliefs would hugely benefit my business.
- Access to litigation support means I can take risks without fear of IRS fines.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Student (Los Angeles, CA)
Age: 19 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 3.0 years
Commonness: 16/20
Statement of Opinion:
- I have no idea how to handle taxes; I really need guidance.
- It’s less about a refund and more about not making any mistakes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Health aide (Baltimore, MD)
Age: 47 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 10.0 years
Commonness: 13/20
Statement of Opinion:
- Access to concrete tax help could alleviate a lot of stress in my life.
- Litigation support might help settle disputes without draining us financially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 7 | 3 |
| Year 5 | 8 | 3 |
| Year 10 | 7 | 3 |
| Year 20 | 5 | 2 |
Unemployed (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 7/20
Statement of Opinion:
- I’m constantly bombarded with tax forms and notices; comprehensive support is vital.
- Having a supportive structure could help my business stabilize and grow.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 5 | 3 |
Cost Estimates
Year 1: $200000000 (Low: $150000000, High: $250000000)
Year 2: $210000000 (Low: $157500000, High: $262500000)
Year 3: $220500000 (Low: $165375000, High: $275625000)
Year 5: $242550000 (Low: $181912500, High: $303187500)
Year 10: $292051500 (Low: $219038625, High: $365064375)
Year 100: $1529785819 (Low: $1147339364, High: $1912232274)
Key Considerations
- The expansion of the low-income tax clinic services may result in better compliance from assisted taxpayers.
- An increase in IRS grant allocations will require ongoing funding from federal sources.
- Potential increased demand for clinic services could necessitate additional infrastructure and staffing investments.