A Checklist for Starting a Law School Tax Clinic
by Janet R. Spragens
The late Janet R. Spragens was Professor of Law at American University’s Washington College of Law and Director of the American University Federal Tax Clinic (now the Janet R. Spragens Federal Tax Clinic).
This article is reprinted from The Community Tax Law Report, Vol. 3, No. 4 (Fall 1999) and provides historical context on the development of the federal Low-Income Taxpayer Clinic Grant Program.
With the enactment of IRC § 7526 in the IRS Restructuring and Reform Act of 1998, law schools have new financial incentives to start tax clinics. Despite this assistance, starting a tax clinic is a complicated and time consuming undertaking. It requires a number of internal (law school) and external (IRS and Tax Court) approvals, as well as extensive planning in setting up the clinic office, establishing a flow of clients into the clinic, and organizing the clinic’s educational (seminar) component. The following checklist should assist the clinic organizer in moving this process forward.
Internal Law School Approvals
Since a tax clinic is a new course offering at the law school, one must first get curricular approval from the law school for offering it, a necessary step with any proposed new course offering. Generally, the described course offering requires the approvals of the Curriculum Committee, the faculty and the Dean. Don’t expect this phase of clinic development to go smoothly and without question. A clinic is not simply another advanced course offering. As a clinical offering, it places many more demands on the resources of the law school than a regular classroom course and is a much more ambitious undertaking. The memorandum to the curriculum committee thus needs to be well thought out and complete, answering as many questions in advance as possible as a preliminary to submitting the memo. It is also usually helpful to talk through the idea of the clinic with as many people as possible, including the Dean, the other clinicians at the law school and the tax faculty.
Usually, any clinical course involves classroom or seminar time, fieldwork, and individual supervision. The memo to the curriculum committee should first provide a description of the course objectives and structure and explain what students will be doing in the clinic that merits academic credit. The goals of the clinic would include, among other things, learning lawyering skills, such as interviewing, counseling and negotiation, and trial skills; and getting extensive training in legal research and writing. In a tax setting, goals would also include learning about tax procedure, tax research, and tax ethics. If possible, the memo should include a syllabus of the seminar portion of the clinic, or at least a general outline of projected seminar topics and reading material.
Second, the memo should include the practical academic details of the clinic, i.e., how many students will the clinic accept and how will they be chosen; the number of credit hours they will receive; whether the clinic will be graded or pass/fail; whether the clinic will be a 1 or 2 semester course; whether it will be offered in the summer; and whether there are any course prerequisites and other eligibility criteria for students who want to take the clinic (e.g., only third years? any prior tax or other course prerequisites (e.g., Evidence)? are part time/evening students eligible?).
The memo should also address who will be teaching the clinic and what credentials or experiences make that person qualified to do so. If that person is an existing faculty member, the memo should suggest who on the faculty might take over that person’s existing courses or how the course will be covered in the future.
Finally, and perhaps most important, the memo should discuss the space and financial consequences of starting the tax clinic. With respect to these issues, keep in mind that a clinic requires the creation of a law office; significant capital expenditures for equipment, such as desks, telephones, copiers, fax machines, student computers, and file cabinets; and collateral costs, such as stationery, postage and federal express charges, and malpractice insurance. The clinic will also require extensive space, which in most law schools is at a premium.
If other clinics are currently offered at the school, the tax clinic can often share some of these facilities and not start entirely from scratch. Existing clinics usually will have in place an organized front office with secretarial and administrative staff, interview rooms, file space, phone banks, computer rooms, and student mailboxes. The current clinics will also have established procedures and routines for everything from buying supplies to giving students office keys and long distance codes. If the tax clinic can simply tap into these established methods of doing business, rather than reinventing the wheel on every issue, starting the clinic (and underwriting its cost and space needs) will be a lot more manageable. This is another reason why it is usually helpful to talk to the other clinical teachers at the law school before submitting the memo to the curriculum committee.
Because law students are not yet members of the bar and not yet authorized to represent clients even on a pro bono basis, the tax clinic must negotiate contracts with both the Internal Revenue Service and the United States Tax Court to permit students to act as attorneys before those bodies. These contracts will have different terms and must be separately negotiated, since each of these organizations has its own requirements before it will allow students to practice before it. In addition, each of these organizations must approve the letter that is sent out to prospective clients advising them of the existence of the clinic; and again these letters will be different. The Tax Court agreement is negotiated through the Tax Court Clerk’s office. With respect to the IRS contract, the clinic should get in touch with the local District Director’s office as well as the Director of Practice in the National office.
The IRS agreement should cover student practice before the National Office as well as before the regional and district offices. Thus, for example, it should be broadly enough written as to cover Form 1023 applications for tax exempt status as well as routine audits (e.g., earned income tax credit audits).
Certain practice areas will not be covered by the generic IRS and Tax Court agreements. For example, the clinic may plan to handle state and local tax aspects of the client’s case in addition to federal tax issues, or refund actions in the federal district courts or the Claims Court, or appeals to the circuit courts of appeal from adverse trial court decisions, or other collateral matters. In these instances additional approvals must be sought from these courts and/or administrative agencies before student-attorneys will be allowed to practice there.
Setting Up Space
As noted earlier, tax clinics have significant space needs which often cause problems for the law school. Thus, between various law school graduate and other programs, administrative office needs, ever growing numbers of law school journals and student organizations, faculty and student lounges, and the occasional offices provided to distinguished/visiting faculty, there may be a fierce competition for law school space. There never seems to be enough to go around.
The tax clinic’s needs will include a suite of offices with secretarial and reception space; interview room(s) for meeting with clients; a locked file room; a work room for students with desks, computers, telephone banks, fax machines, basic library research materials, copying machines, and student mailboxes; a supply closet with everything from paperclips to accordion files to fax cover sheets; and a conference room where professor/student consultations and the seminar session can be held. Again, to the extent the tax clinic can piggyback on to established space with existing clinics, these issues will be significantly less burdensome to address.
Tax clinics have traditionally used a variety of ways to develop a stream of clients including radio advertisements, church fliers, mass mailings to local accountants, posters in grocery stores, and approved leaflets left on reception area tables and counters in local IRS offices. The Clerk’s Office of the Tax Court will also, upon request, include “stuffer notices” about approved tax clinics in the Notice of Trial that is sent to taxpayers 75 days before the court’s calendar call in the tax clinic’s city. In the past the Clerk’s office has been cooperative (to the extent feasible) in scheduling the calendar of the Court late in the school semester, so that students have sufficient time during the semester to either settle the case or ready it for trial before the Tax Court. In preliminary efforts to set up the clinic, it is therefore a very good idea to make contact with the Tax Court Clerk’s office at an early date.
Local legal service organizations are also a good place for client referrals, since these organizations see large numbers of individuals in the target population, and very few of them have competence in the tax area.
It is important early on for the clinic to develop income and other criteria for accepting cases, and also, particularly if it is applying for funds under the IRC § 7526 program, to keep statistical information on the income levels and demographics of its clients. Questions that will need to be addressed in this regard include:
Will the clinic take taxpayers with regular Tax Court cases as well as “S” cases?
Will it take tax shelter cases? Collections cases? Nonfilers? Fraud cases?
Does the clinic have the language capability to help non-English speaking taxpayers? In respect of this group of taxpayers, can the clinic offer non-case-related educational programs for non-English speakers, as contemplated in the § 7526 legislation?
Will the clinic offer tax preparation for taxpayers?
All of these questions require some forethought about what the clinic’s mission is, and the balance between its educational and public service functions. Tax clinics normally do not guarantee that they will take every client who calls and requests assistance, and some line drawing is clearly in order and necessary. In general the practice of most existing tax clinics has been to offer every client an interview and a review of their case. However, client representations are declined for any number of reasons, including that the client’s issue is determined to have no merit (making further argument simply an exercise in running up interest charges); that the client is geographically distant (making representation difficult); that the client seeks remedies which are beyond the clinic’s scope; and that the clinic has a full complement of cases.
Clinics also need to give thought to limiting the overall number of cases that will be accepted per student, so that the students have an opportunity both to do non-client related course assignments, and to give them some breathing space to analyze and discuss the academic aspects of their cases. To the extent they are constantly being assigned an endless stream of new clients, the educational (as opposed to the public service) aspects of the clinic will suffer.
Establishing Internal Clinic Procedures for Case Consideration, Case Acceptance, and Case Management
The day-to-day operations of the clinic require operating rules and procedures so that students understand what is expected of them, cases move through the system in an orderly way, and clients feel that their cases are being handled in a professional manner. To this end, existing tax clinics have often found it helpful to provide students with a manual of procedures and form letters to use in their cases. The manual describes everything from how often students should check their mailboxes for phone messages to the time periods in which students must write their intake memos, meet with their case supervisor, and get back to the client about whether the clinic will take on the client’s case. In addition, the manual explains how students should go about discharging their responsibilities in the clinic, for example,
- how to prepare for an interview (start a file; collect the necessary consents, Form 2848 (Power of Attorney), and other forms which must be signed by the client at the interview; do some preliminary research of the issue; reserve an interview room);
- how to write the intake interview memorandum (describe the basic facts of the case and the amount and years involved; discuss any general information about the potential client which may affect the decision to take the case e.g., client is non-English speaking and is totally lost in the system); evaluate the legal issues; and make a recommendation to the supervisor as to whether the clinic should take the case);
- how to obtain prior approvals for outgoing letters and court documents;
- rules of the clinic (confidentiality issues; use of phone and xerox codes; student mailboxes; office hours); and so on.
The clinic manual also contains various form letters students routinely send (e.g., confirmation of appointment with student-attorney; engagement and rejection letters), clinic forms (consent form to be represented by students; time sheets); a directory of frequently called phone numbers; and other materials (e.g., the Tax Court Rules, Circular 230).
In addition to establishing formal written procedures for students to follow in handling cases, the clinic will also need mechanisms to keep track of the cases and the paper flow in the clinic. Thus, if the clinic enrolls eight students who during the course of the semester each interview, say, eight clients, and the clinic accepts 3-4 of those for representation, the Clinic Director will be supervising 64 interviews and 24-32 active cases, not taking into account any carryover cases from prior semesters. That is a huge number of cases to monitor and supervise, and the clinic will need some system in place to make sure that all cases (and deadlines) are accounted for at all times, and that no cases fall through the cracks. Moreover, to the extent all cases are not resolved at the end of the semester, there must be a system for reassigning cases to new student-attorneys to continue the representation.
In order to create accountability, it is helpful to have some written forms that students prepare on a regular basis tracking developments in their cases. For example, at the American University’s tax clinic, students are required to write a weekly memorandum to the Clinic Director which indicates what (if anything) has happened in each of their assigned cases during the week and how many hours (if any) the student has spent on each case. In addition, we have a master docket (prepared weekly by the clinic secretary from the weekly update information provided by the students) showing the status of all cases in the clinic. The master docket is distributed to all students as well as the Clinic Director on the day before the weekly seminar meeting. This docket provides an overall picture of the number of cases in the clinic, the types of issues being handled, and which students have the heaviest and lightest loads. The latter information is helpful for making assignments of new cases that come into the clinic. Each student brings his or her copy of the docket to class, and it is used also for case rounds in the seminar class.
Organizing the Seminar
The seminar is the educational component of the tax clinic and provides an opportunity for the students to come together to meet as a group on a regular basis in addition to their work with the Clinic Director on individual cases. In the seminar, the students would cover the basic curriculum. There are also case rounds in which students exchange information on their cases as well as general discussions about the problems that have arisen in individual representations. As a result, all of the students have a sense of the range of cases with which the clinic is involved. Equally important, the seminar also offers the opportunity to teach students in a systematic way about tax practice and procedure and to give them opportunities to hone skills, engage in simulations, and reflect on the academic aspects of their cases.
Organizing the seminar involves the same kind of preparation that is necessary for preparing a classroom course, e.g., choosing course materials, writing a syllabus, and developing class plans. It may also involve arranging preliminary “field trips” to the IRS and the Tax Court, developing simulation models, and other methods of teaching students about representing clients.
Developing Relationships with Tax Preparers and Others
A number of clients may have needs that are beyond the ability of the clinic to provide. For example, non-English speakers may need translators to communicate both with clinic students and with representatives of the Internal Revenue Service. Nonfilers may need the services of tax preparers in order to file back tax returns. Other clients may have state and local, as well as federal tax issues, which the clinic is not authorized to handle. Some clients may have refund or appeal issues, which are also not authorized under student practice contracts. To the extent possible, it is helpful to establish relationships with others outside the clinic who can help clients where the clinic cannot.
The clinic may also experience an overflow of clients, which it is not able to handle. In many areas, particularly large cities, tax lawyers in private practice have been willing to volunteer their time to help these low income taxpayers on a pro bono basis. Having a roster of such volunteers is also helpful.
Tax clinics offer the possibility of extraordinarily valuable learning experiences for students as well as the opportunity to serve the community and enhance the curricular offerings of the law school. They are not insubstantial programs to put together, however. Accordingly, it makes sense to get a good head start on planning their implementation, well before the beginning of the semester in which the clinic will actually open its doors for business.