Saturday, November 18, 2006

Tax Advice for the Poor?

The following comment makes me feel like a clarification is in order with respect to my immediately prior post:

As for why there aren't more classes about helping low-income taxpayers comply or pay less tax--it's because we have a progressive tax system. If you don't make a lot of money, you don't pay a lot of tax, and the tax laws that cover you aren't that complicated (perhaps with the exception of complying with law regarding the EITC).

If I suggested there should be more tax courses for the poor, I did not mean to. Whatever would help the poor and most middle classers is covered in a basic course. The reason such a program would make little sense, as the commentator suggests, is that there would be little demand for tax advice. In fact, the demand for tax advice is directly related to the money at stake.

If poor and middle class people do not demand tax advice and if there are no positive externalities that accrue to them by virtue of the advice given to the relatively wealthy and corporate clients, why should they be asked to cough up anything at all to support an LLM program? In effect, the subsidization of LLM tax programs by all classes results in a redistribution from lower income to upper income classes. So much for a progressive tax system!


Anonymous Anonymous said...

Generally, I agree that participants in tax LL.M. programs are there to eventually serve the relatively wealthy and corporate clients. I recently graduated from a premier program and would estimate that about 85% to 95% of my colleauges were there to be able to more fully understate the intricacies of the Code as it relates to corporations and partnerships.

I will say, though, that the demand for tax advice amongst those in the lower tax brackets is quite high. In fact, most attorneys working in low-income taxpayer clinics (LITCs) would insist that they are in a time of crisis: funding cuts leading to job losses; less transparency at all levels of the IRS; and generally a more adversarial system, what with the increase in audit funding to make sure nobody's taking advantage of the earned income credit but a decrease in funding to go after potential big-money tax evaders (e.g. inaccuracies in 501(c)(3) applications.)

The only reason I chose to respond is because it seems that the onus is upon the attorney to pay for the LL.M. Believe me, I support this wholeheartedly: if you want the degree, go out and earn it. Don't ask somebody else to pay for it. However, I do believe it would make sense to make loan repayment assistance or tuition reimbursements available to attorneys who earn taxation LL.M.s with the specific goal of better representing the needs of low-income taxpayers. Right now, this is simply not the case at many schools.

Are there fewer dollars at stake in LITCs? Yes. Most LITCs do not accept cases were the amount in controversy is more than $50,000. Does that mean that the problems are any less complex? Absolutely not. Having seen both sides of the coin, I know just how difficult it can be to assist poor and rich taxpayers alike.

11/20/2006 3:49 PM  

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