Federal Tax Clinic Clears Taxpayer of $44,000 due to Identity Theft

“When I become an attorney, my role will be to zealously represent my clients, and I cannot think of a better way to gain that experience as a law student than through the USD Federal Tax Clinic,” comments legal intern Yousaf Jafri of a recent Federal Tax Clinic case success. “I believe this case, and the clinic in general, has provided some terrific exposure to the ‘real world’ of an attorney: interacting with clients and opposing counsel, applying our legal knowledge to the case at hand, and attempting to reach the best solution possible.”

Jafri is referring to a recent Federal Tax Clinic “win,” in which he helped a low-income taxpayer to be cleared of over $44,000 in income tax liability due to identity theft. The taxpayer came into the clinic in August 2015, confused about a notice she received from the IRS. The letter stated that she owed unpaid taxes from $94,600 of income she’d allegedly received in 2011. The IRS also had set a court date set for October 2015.

Photo credit: StockMonkeys.com

Photo credit: StockMonkeys.com

“Not only had the taxpayer never earned that money, she’d never even heard of the company from which she had supposedly earned it,” states Federal Tax Clinic supervising attorney Richard Carpenter. “She had been working for a local retail shop for the last seven years, and had faithfully paid all of her taxes.”

Before contacting the clinic, the taxpayer spoke with the company’s owner. She learned that a man who had worked for the company had given them what he claimed was his girlfriend’s social security number. The employee asked the company to issue an IRS 1099 form to his girlfriend, and provided the company with her bank account information. However, the social security number he provided was actually the taxpayer’s, gained through identity theft.

When the taxpayer came to the Federal Tax Clinic in the summer of 2015, legal intern Yousaf Jafri was assigned to her case. “The Federal Tax Clinic lectures, my tax courses, and legal research and writing courses were all extremely helpful before I began my correspondence and discussions with the IRS,” reflects Jafri. “It was important to have a basic understanding of the tax code and administrative procedures before I spoke with the IRS attorney handling the case against my client, and I received excellent support and guidance from Professor Carpenter.”

Upon further clarification, Jafri discovered that neither the taxpayer nor her husband had ever met the employee. Understanding this was a case of identity theft, the Federal Tax Clinic pursued a solution with the IRS attorney to discharge the taxpayer’s full liability from this falsely reported income.

“I was in constant contact with the client and acted as a liaison-representative for the taxpayer with the IRS,” describes Jafri. “I also conducted research on how to best substantiate an identity theft issue along with Professor Carpenter’s guidance regarding how to best handle the taxpayer’s case.”

With Jafri’s help, the taxpayer was able to find past bank account statements, pay stubs, and other verifying statements to successfully prove that she never worked for the company. During a conference call, Jafri and the taxpayer discussed with the IRS attorney why the liability should be dropped and gave supporting documents. The IRS agreed, reducing her liability from $44,144 to zero. Professor Carpenter handled all of the Tax Court settlement paperwork.

“When I heard the outcome of the case I was so relieved for our client,” comments Professor Carpenter. Jafri adds, “I felt fulfilled that I had used the knowledge I gained through my education to help a person in need, and thankful that the Federal Tax Clinic is available to our community.”

Photo credit: Stock Monkeys

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