Kaplan Has Been Exploiting Veterans

For-profit colleges have exploited the promise of higher education by deceiving tens of thousands of students seeking a better life. One of the groups the for-profit industry has particularly targeted are veterans and servicemembers.

That is why the Project on Predatory Lending represented the Veterans Education Success organization to prepare a new report outlining the predatory actions of one for-profit institution, Kaplan Colleges and University, against veterans and servicemembers.

VES collected complaints from nearly 100 veterans who attended Kaplan-owned programs. Their complaints include things like:

  • Raising the costs on veterans once they enroll and failing to inform them of additional fees;
  • Misleading veterans about their military benefits covering the tuition costs, resulting in unexpected and burdensome debt; and
  • Borrowing money on behalf of veterans without their consent.

Unlike the for-profits colleges that are forced to shut down when their fraudulent behavior is exposed, Kaplan is still an active and functioning college. In fact, Kaplan University was just purchased by Purdue, a public university in Indiana, to conduct its online programs. And the Department of Education just approved this transaction, which will remove some of the protections for borrowers and taxpayers that apply only to for-profit schools not conducting business under the auspices of public entities.

We hope you will read the full report to understand the extent of the predatory behavior by Kaplan.

Click here to read the report.

Military servicemembers and veterans deserve our respect and gratitude. And, like all students, they deserve to seek higher education without facing fraudulent and unscrupulous companies trying to extract federal funds. Kaplan’s actions run directly counter to that. It’s time for the government to step in to help, or they too will have failed in their duty to support veterans who have sacrificed so much for us all.

Negotiated Rulemaking Reconvenes in Washington D.C. for Act Two of Regulatory Theater

This week, in a conference room in Washington D.C., various stakeholders of the federal student aid programs will meet to discuss whether there should be any check on the cost and value of vocational training programs that receive public money.  The negotiated rulemaking committee formed by these various stakeholders, and representatives of the Department of Education, will meet several more times before the for-profit college industry will get to write the “gainful employment” rule that will pose the least difficulty to its business model early next year.

Act one of a similar regulatory theater took place last month, when the Department convened a negotiated rulemaking on the topic of borrower defense, the process by which student borrowers who have been cheated by their schools can seek loan cancellation.  This rulemaking will likely displace the borrower defense rule enacted just last year, which the Trump administration delayed after taking office.

As someone who represented the legal aid constituency in the most recent negotiated rulemakings on gainful employment and borrower defense, I understand why these two regulations are the focus of the Department’s regulatory agenda.  If allowed to operate, both borrower defense and gainful employment would bring a measure of accountability to an industry that continues to do seemingly everything imaginable to discredit itself.

As a negotiator on the 2013 gainful employment rulemaking, I tried unsuccessfully to convince the Department that loan cancellation is a necessary component of any gainful employment regulation.  It seems obvious that students who borrow to attend a program that purports to provide skills necessary for a vocation, but which on the whole fails, have been cheated.  And the Department plays a role. It is supposed to act as a gatekeeper. No matter how many fine print disclaimers the Department may make, disavowing any role in assessing the quality of program a borrower decides to attend, the ability of a student to borrower loans from the government to pay for education sends a strong signal that the program must be a good one.  Why else would the government be willing to lend money?

In 2013, on behalf of the legal aid community, I proposed that the Department recognize gainful employment metrics as the basis for an affirmative borrower defense by students who attended failing programs.  In response, the Department proposed to amend the borrower defense regulation—not the subject of the rulemaking—to specify that gainful employment metrics could NOT form the basis of borrower defense.  Then it went a step further, and proposed eliminating the borrower defense regulation altogether.  We were able to defeat this proposal, but the final rules on gainful employment did not contain any provision for loan cancellation for students who attended programs that by the Department’s own definition provided more debt burden than value.  Although the Department recognized “the desire to ease the debt burden of students,” the “issue requires further consideration” and therefore the Department “will continue to explore ways to provide debt relief to students in future regulations.”

This was in October 2014, almost two years after the Department had requested information from Corinthian Colleges, Inc. regarding its placement rate data, and several months after the Department placed the company on heightened cash monitoring, restricting its ability to draw down federal student aid.  Within six months, before the gainful employment rules would even go into effect, the Department had fined Corinthian for misleading students, precipitating the school’s closure and bankruptcy.

Later in 2015, the Department convened the first borrower defense rulemaking because of a “building debt activism movement.” Every student loan contract since the mid-1990s has, in line with guidance from the Federal Trade Commission and Congress, provided for loan cancellation upon a showing that the loan was the product of school misconduct. The Department has said on multiple occasions that it was caught off guard by borrower defense, as it had only received a handful of such claims in the decades prior to 2015.  But that year alone, it would receive tens of thousands of applications.  The first tide of applications came from students organized by the Debt Collective, an organization that stepped into the void between rights and remedies for borrowers.  The Department didn’t have any process or even a form for borrowers to assert this contractual right until the Debt Collective created one.

Thirty thousand people have gotten justice in the form of loan cancellation because of borrower defense.  There are close to 100,000 applications pending.  The majority of these claims have been from students of Corinthian Colleges. Second behind Corinthian is ITT, a school that declared bankruptcy in 2016.  Not coincidentally, close to 80% of ITT’s programs would not have passed the gainful employment regulations.

The writing was on the wall when the Department tried to stealthily remove the borrower defense regulations in 2013.  And it is no less clear today than it was then that there is a massive problem with the federal student aid program.  This program was intended to alleviate rather than reify, or worsen, the wealth gap in our country.  Those looking to obtain the basic skills and credentials that the labor market now requires for entry-level positions in trades should not have to take on massive amounts of debt that they will never be able to repay, even under the best-case employment scenario.  And the Department should not enable this zero-sum game between students and an industry that takes taxpayer dollars as revenue and creates a near dollar-for-dollar wake of individual debt.

Thankfully, despite the current climate, I see no indication that this genie will ever go back into the bottle.  Even the Higher Education Act reauthorization bill introduced in Congress last week, in all of its meanness, did not go so far as to take away the right of students cheated by for-profit schools to seek loan cancellation.  The longer this industry survives, the more debt it creates without returning any value to society, the closer we come to a reckoning.  No matter what happens this week in a conference room in Washington D.C.

Project on Predatory Student Lending’s Director of Litigation, Eileen Connor, selected for the 2017 “Rising Star” award from the National Consumer Law Center

The Project on Predatory Student Lending’s Director of Litigation, Eileen Connor, has been selected for the 2017 “Rising Star” award from the National Consumer Law Center for her significant contributions to consumer law. Eileen’s award comes as a result of her Second Circuit victory in the case Salazar v. King. Her clients were defrauded by the predatory practices of the now-defunct Wilfred Beauty Academy.

Wilfred, a for-profit chain of cosmetology and business trade schools, came under government investigation in the 1980s for the misuse of student aid funds and the falsification of loan applications. The result of the investigation was an overwhelming amount of evidence proving Wilfred’s fraud in certifying students’ eligibility for loans. In 1996, the Department of Education found that Wilfred’s fraudulent practices were widespread and recommended that all Wilfred students who were improperly enrolled receive a loan discharge, reimbursement for money they had paid, and a restoration of their credit. Despite its own recommendation, the Department continued to collect on these loans, including through involuntary collection methods such as seizing tax refunds and garnishing wages.

After the Department refused Eileen’s request that it suspend collections and notify all Wilfred borrowers that they may be eligible to discharge their loans, as it was required to do by law, Eileen filed this class action lawsuit in 2014. She challenged the Department’s refusal to meaningfully notify borrowers of discharge rights – rights that stem from the Department’s own failure to diligently oversee the predatory for-profit schools participating in the federal student loan program. The Second Circuit found that the Department’s refusal to notify borrowers was final and reviewable, and that judicial review was especially appropriate given the collection powers the Department exercised against the putative class members.

The Second Circuit’s ruling cracks open the door to relief for defrauded borrowers by showing that, in carrying out each and every function related to the federal student loan program, the Department must at least follow the law and its own regulations.

Eileen’s tenacious advocacy was carried out over more than three years, including before an administrative agency, a district court, and the Second Circuit. Salazar is an important and unfortunately rare case that begins to rein in the lawless and harmful approach that the Department of Education takes with respect to the rights of defrauded student loan borrowers. In short, the recognition is well-deserved. The Project on Predatory Student Lending congratulates Eileen on the award and thanks her for her tireless and inspirational leadership. We look forward to celebrating her advocacy at the National Consumer Law Center’s Consumer Rights Litigation Conference this week.

Is VA Wrongfully Excluding Hundreds of Thousands of Veterans from Needed Care

In a publication of the Penn State Law Review, Dana Montalto of the Legal Services Center of Harvard Law School, along with colleague Bradford Adams of Swords to Plowshares, provides a legal history and analysis of how the Department of Veterans Affairs (VA) determines who is eligible for basic health care and support services – and who should be excluded.  Although the 1944 GI Bill of Rights makes clear that only those veterans who “engaged in severe or repeated misconduct without explanation” should be barred from receiving benefits, Montalto and Adams argue that the VA incorrectly interprets the law, thereby unfairly preventing hundreds of thousands of former service members from receiving needed benefits.

Since World War II, the VA has been required to provide veterans’ benefits to all service members who left under conditions classified as “other than dishonorable,” so that only those who received or should have received a “dishonorable discharge” should be barred.  Service members who engaged in less severe misconduct, who were experiencing mental illness, or who suffered from other hardships should still be eligible for benefits.  Montalto explains that the VA has improperly implemented Congress’s statutory standard, excluding former service members for minor disciplinary problems during service and failing to consider extenuating or mitigating circumstances.

Montalto and Adams propose that the VA adopt a more holistic approach when determining whether a veteran is eligible for benefits.  Some changes to the VA’s eligibility review procedure could include starting with a presumption of eligibility instead of ineligibility for former service members, including a consideration of positive or mitigating factors in each eligibility case, and providing access to basic healthcare while eligibility reviews are pending.

Read the entire article at http://pennstatelawreview.org/wp-content/uploads/2017/11/Adams-Montalto-article.pdf

For more information regarding the Veterans Legal Clinic’s advocacy on behalf of veterans with bad paper discharges, read the following publications:

https://www.swords-to-plowshares.org/wp-content/uploads/Underserved.pdf

https://www.swords-to-plowshares.org/wp-content/uploads/VA-Rulemaking-Petition-to-amend-regulations-interpreting-38-USC-10122.pdf

 

Former For-Profit College Students Ask Federal Court to Void Student Loan Debt

Yesterday, Tina Carr and Yvette Colon, two former defrauded students of the for-profit Sanford-Brown Institute in New York, sued the Department of Education (Department) and Navient to block the enforcement of their student loan debt. They sued because of the Department’s failure to act on thousands of borrower defense applications by former students whose debts it has the legal obligation to cancel. The Project on Predatory Student Lending and the New York Legal Assistance Group (NYLAG) represent Ms. Carr and Ms. Colon.

The lawsuit comes just as the Department convenes a second negotiated rulemaking committee in as many years on the subject of borrower defense. But what is happening in Washington D.C. is nothing more than regulatory theater: while claiming to process borrower defense applications, the Department has repeatedly delayed—and in this week’s rulemaking, will attempt to rewrite—a rule that would have clarified the process for borrowers like Ms. Carr and Ms. Colon to seek cancellation of fraudulent student loan debt. The Department has shown that it has no intention to give cheated students a fair hearing, and this rulemaking is further display of its bad faith.

Sanford-Brown, owned by Career Education Corporation (CEC), engaged in outright deception to induce Ms. Carr and Ms. Colon to enroll in its vocational programs. Both students entered programs in medical fields, only to find out after the fact that the school lacked the necessary accreditation and did not provide adequate training. Sanford-Brown also lied about its dismal track record of preparing students for medical vocations.

Ms. Colon and Ms. Carr are not alone in having been cheated by Sanford-Brown. The Office of the Attorney General of the State of New York (OAG) pursued CEC for these deceptions, and found that CEC systematically cheated students like Ms. Carr and Ms. Colon. Although Sanford-Brown representatives cited an 80 percent job placement rate to Ms. Carr, the OAG found that the actual placement rate was only 26.1 percent. The OAG found that Sanford-Brown committed widespread deception concerning programmatic accreditation, and failed to disclose that graduates generally could not transfer credits to legitimate schools. The OAG concluded that these practices violated New York’s consumer protection laws.

In March 2015, Ms. Carr and Ms. Colon submitted defense to repayment applications to the Department of Education and Navient, invoking their right to cancellation of their loans based on Sanford-Brown’s deceit. Despite Ms. Carr and Ms. Colon’s clear legal entitlement to loan cancellation, the Department and Navient have refused to consider their defenses, leaving Ms. Carr and Ms. Colon to struggle—along with tens of thousands of other borrowers whose defenses the Department has ignored—with burdensome and insurmountable student loan debt.

Ms. Carr and Ms. Colon did everything right, including submitting evidence from the OAG that Sanford-Brown deceived them into taking out loans to get an ‘education’ that would never lead to gainful employment. But almost three years later, Ms. Carr, Ms. Colon, and too many other students are still suffering every day from damaged credit and the threat of collection on these unlawful loans. They had no choice but to go to court.

Faced with the Department’s bad faith, and after almost three years of waiting, Ms. Carr and Ms. Colon are asking a federal judge to vindicate their right to be free of unlawful debt. You can read the complaint online here, and visit this page for more information about the case.

 

VA Secretary Shulkin Discusses Needs of Disabled Veterans During Visit to Harvard Law School & Veterans Legal Clinic

For the fourth year in a row, the Veterans Legal Clinic of the Legal Services Center of Harvard Law School gathered together veterans, veterans service organizations, government officials. community providers, veterans advocates and lawyers, and law students for an event focused on the needs of disabled veterans. On Thursday, November 2, 2017, Dr. David Shulkin, the Secretary of the Department of Veterans Affairs, delivered the 2017 DAV Distinguished Speaker Lecture at Harvard Law School. The event was co-hosted by the Veterans Legal Clinic and Harvard Law School’s Armed Forced Association.

Alan Bowers, former National Commander of DAV, introducing VA Secretary Shulkin at HLS

Introductory remarks were given by former National Commander of DAV, Alan Bowers, a disabled combat veteran of the Vietnam War. Mr. Bowers described the community’s shared goal to care for veterans who are injured or ill as a result of their military service. “May the work of Harvard Law, the DAV, and the VA keep the promises that we make to the men and women who enlist in our armed forces of the United States of America, past and present. Keep the promise.”

Secretary Shulkin spoke about the challenges facing the VA, the VA’s efforts to serve the current needs of veterans, and his approach to leading the second largest federal agency.  Among other topics, he discussed veteran suicide, the needs of veterans with less-than-honorable discharges, innovations in the delivery of healthcare for veterans, and benefits appeal system reform. Speaking about the 2014 VA healthcare waitlist crisis, Shulkin said, “Our success is the trust of the veterans we serve and we clearly lost that trust.” Describing his approach when he took over as Secretary, he explained, “The only way I know how to go about regaining that trust is by being open and transparent about problems and as you’re fixing problems letting people know.”

VA Secretary Shulkin Speaking at HLS

Shulkin also described the VA’s comprehensive definition of health—the Whole Health System—which informs how VA seeks to provide holistic services, including peer support, transportation, homelessness services, and even connections to legal services. “What other health system thinks that it is important to have an involvement with the courts and to provide legal assistance? … Making sure that we can address the full well-being of a veteran is critical.”

(l-r) Anne Stark, HLS ’18, former Clinic student; Joshua Mathew, HLS ’19, current Clinic student and Armed Forces Association Co-President; and VA Secretary Shulkin meeting at the Legal Services Center.

After his lecture, Secretary Shulkin visited the Veterans Legal Clinic at the Legal Services Center of Harvard Law School, located in Jamaica Plain.  Secretary Shulkin toured the Center and met with current and former Clinic students and staff to hear about the legal assistance they provide to low-income and disabled veterans and the most pressing legal issues faced by the veterans community.

Supported by a generous grant from the DAV Charitable Service Trust, the DAV Distinguished Lecture Series provides an annual forum at the world’s most renowned university and law school, public servants, and thought leaders to speak on issues of importance to the nation’s veterans. The series recognizes leading figures in the veterans’ community, raises awareness about the needs of veterans, sparks discussion about the public policies that most impact veterans, particularly those with service-connected disabilities, and serves as a call to action for veterans and non-veterans alike to help ensure the nation honors its commitments to those who have served.

For more coverage of Secretary Shulkin and his visit to HLS, please visit:

https://news.harvard.edu/gazette/story/2017/11/va-secretary-says-vets-health-top-priority/

https://today.law.harvard.edu/shulkin-seeks-increase-service-accountability-veterans-affairs/

In a Second Rebuke to Department of Education, Federal Court Refuses to Relinquish Case of Corinthian Borrower

In its latest ruling on October 31, 2017, the United States District Court for the Central District of California demanded that the Department of Education respond to the allegations of Sarah Dieffenbacher, a mother of four who was defrauded by Everest, a Corinthian Campus in California.

Sarah’s case began when the Department threatened to garnish her wages to pay off her student loan debt, despite her numerous requests that the Department cancel the fraudulent debts. In response to the lawsuit, the government asked the court to send the case back to the Department so that it could continue to consider Sarah’s case without court oversight, but the court denied the request and ordered the Department to consider Sarah’s discharge applications by September. The Department failed to do so.

Instead, the Department issued an “interim order” purporting to withdraw its wage garnishment order and, in September, informed the court that it would take another six months to consider Sarah’s loan discharge application. In response, the court asked the parties to explain whether the Department’s actions should prevent the court from hearing the case. Sarah filed a detailed brief explaining that they did not; the Department filed three pages.

In its latest ruling, issued on October 31st, the court agreed with Sarah, denying the Department’s attempts to take this case out of federal court and ordering it to answer Sarah’s complaint within 20 days.

The court’s refusal to relinquish the case represents another rebuke of the Department’s efforts to deny Sarah her legal right to loan forgiveness, and another step toward vindicating Sarah’s rights. Sarah is legally entitled to have her loans from this fraudulent school cancelled, and the Department of Education’s refusal to acknowledge that she is entitled to loan cancellation is shameful. We will fight the Department of Education as it continues to side with the predatory industry instead of the students and taxpayers it is charged with protecting.

Robyn Smith, of the Legal Aid Foundation of LA, is co-counsel with the Project on Predatory Student Lending in Sarah’s case.

VA Secretary to speak at Harvard Law School on Nov. 2nd

Dr. David Shulkin, Secretary of the U.S. Department of Veterans Affairs, will deliver the 2017 Disabled American Veterans (DAV) Distinguished Lecture at Harvard Law School next month. This is the fourth annual event in the DAV Distinguished Speaker Series. The Speaker Series provides a forum for national leaders to address the critical issues facing our nation’s disabled veterans and to engage in conversation with the local community. The series is co-hosted by the Veterans Legal Clinic at the Legal Services Center of Harvard Law School and the Harvard Law School Armed Forces Association.

The event will be held on Thursday, November 2nd, 2017, at 12pm, in Milstein East B on the second floor of Wasserstein Hall on the Harvard Law School campus. The street address for Wasserstein Hall is 1585 Massachusetts Avenue in Cambridge. The event is open to the public.

 

Helping Low-Income Clients Navigate the IRS

Professor Keith Fogg, right, who heads the Tax Clinic, with Fellow Audrey Patten

Tax Clinic students and faculty fight for clients’ rights, file potentially precedent-setting appeals.

The client worked at a minimum wage retail job earning $13,000 a year and was the family’s sole breadwinner. Because she and her aging mother had agreed to foster a relative’s child whose parents had been incarcerated, she filed a federal tax return claiming the earned income tax credit and advanced child tax credit, both of which are designed to benefit low-income households.

Then an IRS audit ruled her ineligible for those benefits – which would have brought an additional $5,000 into the household – saying the child’s foster care status did not qualify her as a dependent for purposes of these credits. But thanks to tenacious legal research and petition-filing by a Harvard Law School student working in the Tax Clinic of the Legal Services Center at HLS, the IRS ruling was overturned and the client received much needed additional income.

Leveling the playing field

Low-income clients come to Harvard’s Tax Clinic because they need an advocate to fight for their legal rights – rights that are meaningless if clients lack access to a lawyer to stand up for them.

Tax debt and the liens which the IRS files can prevent clients from getting jobs, while fixing tax problems allows them to reenter the job market and has a positive impact on their credit ratings.

Tax Clinic clients are military veterans, immigrants, or survivors of domestic violence. They find themselves under audit or in Tax Court because they have been victimized by scoundrel fly-by-night tax preparers who submit faulty returns on their behalf. Or they have survived abusive domestic relationships only to discover that spouses kept them in the dark about nefarious, unreported financial dealings that have potentially devastating tax consequences. Still others are vets who fail to file tax returns after losing jobs or businesses because they suffer from service-related post-traumatic stress disorder.

Others who wind up at the Tax Clinic have been wrongly incarcerated and are now receiving monetary settlements for their pain and suffering. Or they were exploited by for-profit schools and colleges and are now having their government student loans forgiven. Helping these individuals avoid unintended tax consequences of these settlements is another goal of the Tax Clinic.

In the earned income tax credit case, dogged research by law student Jimin He, HLS ’17, determined that the client had, in fact, done everything right — but the IRS auditors reviewing her case were apparently unaware of the temporary regulations recognizing foster siblings.  Gathering the necessary documentation to prove guardianship and to show eligibility to claim the foster sister as a dependent, Jimin He prepared and filed the petition. The IRS conceded almost immediately, releasing to the client a much-needed check for $5,000 that had been previously frozen.

A new effort to set precedent

The Tax Clinic is led by Keith Fogg, who came to Harvard in 2015 as a visiting professor from Villanova to serve as founding director. He has recently been appointed Clinical Professor of Law at HLS to lead the growing tax clinic enterprise on a permanent basis.

Professor Fogg is a national authority on tax procedure, especially in the area of collection and bankruptcy law as it relates to tax. He worked for 30 years in the Office of the Chief Counsel of the Internal Revenue Service. The recipient of numerous honors, he was chosen as the IRS Chief Counsel Robert H. Jackson National Attorney of the Year in 2007 and the ABA Tax Section Janet R. Spragens Pro Bono Award winner in 2015. He co-authors a blog with Villanova Professor Leslie Book, procedurallytaxing.com, which focuses on current tax procedure issues and is an exceptionally popular ABA Top 100 Law Blog.  He is also the editor of Effectively Representing Your Client before the IRS, which is published by the ABA and is the tax practitioner’s bible for IRS advocacy.

Professor Fogg’s goal is not only to offer the help of Harvard Law students to dozens of low-income clients with tax matters each year under supervision by LSC lawyers. Equally important, he wants to establish precedents that make tax laws and processes more favorable to low-income clients. In fact, Harvard’s is perhaps the only tax clinic among the 40 US law schools with such clinics that systematically sets out to use the courts and administrative processes to create new precedents that will benefit low income taxpayers nationwide.  In the past year alone, the Clinic has been to Circuit Courts of Appeal twice arguing cases that it hopes will set new precedent about the rights of taxpayers.

“Keith is at the vanguard of the low-income tax movement,” says Caleb Smith, who was a Clinical Fellow in the Tax Clinic during the 2016-2017 academic year and now leads the Tax Clinic at the University of Minnesota Law School.  “He thinks not only about how to solve individual tax problems, but he focuses on bigger systemic issues.  He thinks broadly and creatively about how to advocate for low-income clients by advocating for bigger rule changes, whether it be by filing amicus briefs, commenting on administrative rules changes, or taking unfair decisions in Tax Court to the appellate courts.”

“While tax law represents a substantial and critical part of the Law School curriculum, before the Tax Clinic was established there was no clinic through which students could receive hands-on legal training in the actual practice of tax law,” says Daniel Nagin, Clinical Professor of Law, Vice Dean for Experiential and clinical Education, and Faculty Director of the WilmerHale Legal Services Center (LSC) at Harvard Law School. “It’s exciting that we can pursue these important teaching goals, respond to the unmet legal needs of vulnerable communities — and potentially set legal precedents that will benefit large numbers of low-income clients,” he says.

Students experience IRS negotiations, appellate court work

 Many of the students who enroll in the Clinic have a deep interest in tax law.  Others are not committed to a tax law career but are curious about a topic so central to the social safety net and have an interest in exploring public service law careers.  Still others are motivated by a desire to deepen their understanding of administrative law practice and/or hone their appellate advocacy skills.

“I have one student who is a young associate at a well-respected law firm, and it turns out she is the only one on the team she is working with who has ever negotiated with the IRS, an experience she gained in the Clinic,” says Professor Fogg.  “And so, at a very early stage in her career, she has become the lead person in at least one case because she has more expertise than her more senior colleagues in dealing directly with the IRS.”

In the last six months, students have appealed Tax Court decisions on behalf of low-income clients in the Fourth and Tenth Circuit Courts, in addition to arguing cases before the Second and Third Circuits. The appellate cases are focused on developing jurisprudence on equitable tolling in tax law, an historically neglected area that can allow low income taxpayers who have been misled by the IRS to have their day in court. The Clinic has also filed amicus briefs on this topic in the Tax Court and in the Ninth Circuit.

In each of these potentially precedent-setting cases, the Clinic’s student lawyers argued that the IRS misled their clients concerning the date by which they could file an appeal of a Tax Court ruling in an innocent spouse or collection due process case.  The individuals with whom the Tax Clinic is now working clearly filed responses before the dates the IRS had told them verbally or in writing the responses were due – but because the IRS employees miscalculated the correct date or provided misleading communication, the taxpayers responses arrived beyond the timely filing window.

In their appeals, Tax Clinic attorneys and students argue that the statute of limitations should not bar the client’s claim in these cases. Each of the clients the Tax Clinic represents in these cases has a compelling reason for missing the deadline for filing and a good underlying case. In making the tolling argument, the Tax Clinic raises issues of equity and fairness.  The Tax Clinic interprets recent Supreme Court decisions regarding the time frame to petition courts as giving the Tax Court the authority to allow late claims in appropriate cases.

Even if the Tax Clinic ultimately loses on the merits of these cases, the compelling nature of the issue and of the cases presented should provide a strong basis for seeking legislation to allow the Tax Court’s doors to be opened when a petitioner files late for a valid reason, Fogg says.

Fighting tax code trip wires

Bryan Camp, George H. Mahon Professor of Law at Texas Tech Law School and an expert in tax and bankruptcy law, writes extensively in Tax Notes and other major tax publications about the kinds of issues Fogg and the Tax Clinic seek to address.  “The Tax Code is full of trip wires that prevent people from getting the relief they deserve, he says.  “Keith’s work and the work of Harvard’s Tax Clinic is doing God’s work to convince courts to cut people a break.”

For students, the opportunity to prepare cases at an appellate level is almost unheard of in many law schools. Jeff Zink, HLS 2017, had the unusual opportunity to provide oral argument before a federal court of appeals as a third-year law student this past spring in one Tax Clinic case.  “Most lawyers don’t get to do that until after many years of practice,” he says.

Zink answered questions from a three-judge panel, and opposing counsel was an experienced government tax attorney.  “It was nerve-wracking,” he admits.  “But it was an incredible learning opportunity.  Preparing for oral argument is a challenging and unique process.  Having gone through it once already will help me throughout my career.” Zink is now clerking for the First Circuit Court of Appeals in Boston. He plans to pursue a career in tax.

While appellate judges have ruled against the Tax Clinic’s clients in the Second and Third Circuit Courts on equitable tolling issue, the Tax Clinic is marching forward to present the issue in other circuits. Fogg hopes one of the remaining circuits will rule favorably given the strength of the cases and legal arguments. And if a circuit does decide favorably, it would be a precedent-setting ruling that would benefit many low-income taxpayers in the future.

Giving clients a voice

In addition to direct client work and the appellate work, the Tax Clinic has also submitted amicus briefs in cases involving areas such as innocent spouse issues and refund jurisdictions. It has also filed comments to the IRS on proposed rule changes that affect low-income taxpayers, such as those that relate to Tax Court rules and the Earned Income Tax Credit, the latter of which, in many ways, is the federal government’s largest anti-poverty program.

“Low-income taxpayers generally lack a voice in rulemaking that impacts their lives,” says Fogg.  “And so, whether we are working on behalf of individual clients, filing potentially precedent setting appeals, or commenting on IRS rulemaking, our ultimate goal in the Tax Clinic is to make sure that low-income taxpayers have their voices heard.”

Advocacy Alert: Low-Income Military Retirees Left Unprotected in Federal Payment Levy Program

In a recent blog post, Clinical Professor Keith Fogg, Director of the Federal Tax Clinic at LSC, advocates for the IRS to ensure that low-income veterans who receive military retirement payments are protected from financial hardship under the Federal Payment Levy Program.  To learn more, read Prof. Fogg’s post here.