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Case Stories

CTLP’s clients come from all walks of life. They are our neighbors, child care providers, yard workers, parents, and friends.  Meet a few of the people our clinic has helped.

George & Martha,

a retired couple in their 80s, have planned carefully for their retirement. Their home is paid for and their children and grandchildren live nearby. Each receives Social Security retirement benefits which they supplement with their small pensions. Their planning has made it possible for them to live relatively comfortably. However, their incomes are fixed and their expenses use up all of their income. They filed separate tax returns in 2007 under the mistaken impression that it was necessary to file separately in order to obtain the $300 stimulus rebate provided for that year. They have been married for more than 50 years and, prior to 2007, had always filed jointly.

In the course of filing their returns, they forgot to include their all of their pension income, an oversight that was caught by the IRS which also concluded that they owed more than $1,600 in federal income tax.

CTLP staff helped them amend their filing status to married filing jointly and account for all of their income. The change in filing status meant that they owed no federal income tax on their pension income – they didn’t receive enough to owe any tax. Meanwhile a pro bono volunteer responded to Martha’s notice by petitioning the Tax Court.

Armed with the joint return, CTLP’s volunteer attorney was able to settle the case without trial. After their joint return was processed by the IRS, George and Martha owed nothing to the IRS. They also received the $600 stimulus rebate for married couples filing jointly.

Mike

is a 63-year old bus driver from Central Virginia.  Beginning in 2008, Mike started caring for his elderly sister, Mary, who is permanently and totally disabled. Although Mike was eligible to receive the earned income tax credit for Mary, the IRS denied his claim for two years.

Mike heard about CTLP through a social worker.  CTLP helped Mike gather appropriate documentation to substantiate both the relationship with his sister and the support he provided her. Through CTLP’s continued advocacy, the IRS eventually granted Mike a refund of $5,650 for both years. Beginning in 2010, Mike can now confidently claim his sister on his tax returns, allowing him to qualify for the assistance necessary to ensure Mary receives adequate care and support.

Terry

worked as a roofer in Southwest Virginia his entire life until he became disabled on the job. After he filed his 2006 tax return, the IRS sent him a notice claiming that he owed an additional $3,200 in taxes.  He later found out that his employer had reported his 2006 wages incorrectly to the IRS so that it appeared that he had made twice as much money in 2006 as he had actually made. Terry called CTLP when the IRS began trying to garnish his disability benefit. He explained that he had already paid the tax he owed and that the IRS had “frozen” the refund he had claimed on his 2006 tax return.

“I don’t mind paying the income tax I owe,” he told us, “but it isn’t right to pay taxes on money I never earned.”

CTLP referred Terry’s case to a pro bono attorney who helped him prove to the IRS that he had only made half as much money as his employer reported and that he had filed his 2006 tax return correctly. As a result of this assistance, Terry did not owe $3,200 as the IRS claimed and instead he received a much needed refund of $2,800.

Jorge

is a lawful permanent resident authorized to work in the US. He has complied fully with all U.S. immigration and tax laws. In 2008, however, his identity was stolen, and another person obtained employment using Jorge’s name and Social Security number. The IRS claimed that Jorge owed employment taxes on the identity thief’s wages. It turned out that the thief had obtained Jorge’s name and SSN from one of Jorge’s former employers who “gave” Jorge’s identity to an undocumented worker it wanted to hire.

CTLP staff and interns helped Jorge report the identity theft to the IRS and to compile the records needed to establish his actual income for 2008. As a result, Jorge was able to clear up this mess with the IRS and received the $1,000 refund due to him.

Walter

is a 75-year old navy veteran, who lives with his wife in the Tidewater area of Virginia. For many years, Walter owned and operated a transmission repair shop. When the recession hit in 2008, his business, like so many others, took a turn for the worse. To keep his company afloat, he used the payroll taxes withheld from employee paychecks to continue paying his employees and the shop’s bills. As the recession worsened, Walter was eventually forced to dissolve his business.

After a lifetime of hard work, Walter and his wife suddenly found themselves living on $1,500 each month, the amount Walter draws from Social Security. Complicating matters further, the IRS assessed Walter with a penalty for the payroll taxes he withheld, but failed to pay the government.

Facing a potential garnishment of his Social Security income, Walter contacted CTLP. The staff at CTLP worked with Walter to compile and provide the IRS with current financial information. Through CTLP’s advocacy efforts, Walter’s accounts were eventually placed in currently not collectible status, meaning the IRS will no longer pursue any collection activity on the outstanding liability. Although times are still tough, Walter and his wife can now breathe easier knowing the worst is behind them.