Dear Senator Coverdell:

This report responds to your request for information on the implementation of the Low-Income Taxpayer Clinic Program authorized by section 3601 of the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (Restructuring Act).Under this program, IRS is authorized to award matching grants to organizations that (1) provide legal assistance to low-income taxpayers in controversies with IRS or (2) inform individuals for whom English is a second language of their tax rights and responsibilities.

As agreed with your office, this report provides information on (1) the steps IRS has taken to implement the Low-Income Taxpayer Clinic Program; (2) the key tax problems facing low-income taxpayers served by the clinics and the reasons for these problems; (3) the role that the program plays in addressing these taxpayers’ problems; and (4) other actions IRS or Congress could consider to address the types of tax problems the clinics are currently facing. This report is based on information provided by IRS officials and the directors of the low-income taxpayer clinics that served taxpayers during fiscal year 1999.

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