Our client never expected to owe the IRS tens of thousands of dollars.
After Rita’s identity was stolen, someone attempted to file a tax return in the client’s name claiming a $33,000 refund. The IRS rejected the fraudulent return but subsequently held the client responsible for the amount, along with additional taxes and penalties, resulting in a tax bill of approximately $46,000. The client knew the debt was not theirs but faced the daunting task of proving it to the IRS.
Unable to resolve the matter alone, Rita turned to Lone Star Legal Aid. Alecia Best, an attorney with Lone Star Legal Aid, represented the client in Tax Court and worked to demonstrate that the tax liability resulted from identity theft. LSLA provided evidence showing that Rita was the victim of identity theft and that the fraudulent tax return had not been filed by the client.
The evidence convinced the IRS to settle the case and forgive the $46,000 debt. As a result, Rita avoided a tax bill they never actually owed and was no longer responsible for the fraudulent return, taxes, and penalties associated with the identity theft.
Identity theft can have serious financial consequences, particularly when someone uses another person’s information to file a fraudulent tax return. For people facing an unexpected tax liability resulting from identity theft, legal assistance can help them understand their rights and present evidence to the appropriate agency.
If you are facing a tax-related legal problem and need assistance, Lone Star Legal Aid may be able to help. Eligible individuals can apply for free legal services by completing an online application or calling 1-800-733-8394.
*Name(s) have been changed to protect the client’s identity.
Lone Star Legal Aid (LSLA) is a 501(c)(3) nonprofit law firm focused on advocacy for low-income populations by providing free legal education, advice, and representation. LSLA serves millions of people at 125% of federal poverty guidelines, who live in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties in Southwest Arkansas. To learn more about Lone Star Legal Aid, visit our website at www.LoneStarLegal.org.
Media contact: media@lonestarlegal.org