Low Income Tax Clinic Southwest

STATEMENT OF WORK 

OBJECTIVES 

General.  

This statement of work covers activities to develop a Low-Income Tax Clinic ("LITC”) at a Qualified LITC to assist low-income Pennsylvania taxpayers with Pennsylvania state tax issues.  

The Pennsylvania Department of Revenue (“DOR”) is seeking to partner with a Qualified LITC that can provide expertise in Pennsylvania state tax issues while maximizing a high-quality level of service.  

The Qualified LITC shall assume responsibility for all services provided in this statement of work. The Qualified LITC shall provide materials, services, skills, supervision, and necessary tools and equipment to effectively resolve Pennsylvania state tax issues for low-income Pennsylvania taxpayers. A Qualified LITC must have the capability to educate, perform and complete the services in all respects in accordance with this statement of work.  

Specific.  

The Qualified LITC will be expected to have a proper understanding of Pennsylvania’s tax laws and provide the following services to low-income Pennsylvania taxpayers: 

1. Providing a full range of vital pro bono tax services and other dispute resolution support services for low-income Pennsylvania taxpayers with a Pennsylvania state tax dispute;  

2. Educating low-income Pennsylvania taxpayers of their rights and responsibilities; and 

3. Identifying and analyzing issues that impact low-income Pennsylvania taxpayers. 

The Qualified LITC will be required to provide both mid-point and final status reports as described herein to provide the Department guidance as to the success of the program. 

DEFINITIONS 

A.  Additions to Base Income: An increase in the FEC based on the factual circumstance of the taxpayer. If a taxpayer has dependents the FEC will be increased by $17,000 for each dependent claimed by the taxpayer. If a taxpayer has children under the age of six (6) enrolled in daycare, the FEC will increase by $13,500 for each child under the age of six (6) that is currently enrolled in daycare.

B. Base Income: The starting income for calculating a taxpayer’s FEC that is based on the number of adults in the taxpayer’s household. If one adult is in the household, the base income is $48,000. If there are two adults in the household, the base income is $65,000.

C. Controversy: A proceeding or dispute between an individual and the Department concerning the assessment, collection, or refund of any state tax administered by the Department, and any associated penalties or interest. 

C. Department: The Pennsylvania Department of Revenue. 

D. Financial Eligibility Cap (“FEC”) : The maximum amount of income a low-income taxpayer can earn and still qualify for representation. For each taxpayer that does not qualify as low-income taxpayer under the Federal LITC income guidelines, the Qualified Clinic must calculate the FEC based on the circumstances of that taxpayer. The FEC is calculated by adding a base income amount with any applicable additions to base income as defined herein and as explained in the worksheet entitled “Calculating the Financial Eligibility Cap for PA LITCs.”

D. Income: Income shall be determined in the same manner as described in IRS Publication 3319. Except, income shall include proceeds received from the sale of property (e.g., stocks, bonds, a house, a car).

E. Low-Income Tax Clinic (“LITC”): A program to assist low-income individuals who have a tax dispute. 

F. Low-Income Pennsylvania Taxpayer: An individual whose income does not exceed the FEC as calculated for that taxpayer’s specific circumstances. Please note any taxpayer that qualifies under the Federal LITC income guidelines as a low-income taxpayer will also satisfy the FEC and be a low-income Pennsylvania taxpayer.

1. In very limited circumstances, a Qualified LITC may request to represent a Pennsylvania Taxpayer that earns income that exceeds the FEC. All such requests shall be made to Vincent Pease, at vpease@pa.gov, who shall have the ability to approve and deny the request for the Department. Any such request must include the reason why the Qualified LITC would like to represent the prospective client. A Qualified LITC may not represent a taxpayer that earns over their calculated FEC without prior approval.

G. Qualified Low-Income Taxpayer Clinic (“Qualified LITC”): A pre-existing low-income taxpayer clinic that has been awarded a federal LITC grant for the same period that covers this statement of work and has not received funding from the Department covering the same period.   

NATURE AND SCOPE OF THE PROJECT  

Background.  

DOR was created under Article II, Section 201 of the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929. 

The Department is responsible for the administration of Pennsylvania tax and Lottery programs. The Department was established in 1927 and is charged with collecting and distributing most of the tax monies due to the Commonwealth of Pennsylvania, as well as municipalities. On an annual basis, the Department receives and collects all of the Commonwealth’s General Fund tax revenue. In addition, the Department annually processes more than 10 million business and individual tax reports and payments. The scope of services and programs provided by the Department affects every business and citizen in Pennsylvania. 

Scope.  

A Qualified LITC that agrees to this statement of work is required to provide representation of low-income Pennsylvania taxpayers in controversies with the Department as well as operate a program to educate and inform low-income Pennsylvania taxpayers about their rights and responsibilities under the law. 

 

REQUIREMENTS 

A. CLINIC DIRECTOR: The Qualified LITC must have a staff member, referred to herein as the Clinic Director, with overall management responsibility for the clinic as well as the education of low-income Pennsylvania taxpayers as discussed herein.  

1. The Clinic Director must manage day-to-day clinic operations, prepare, or review the required clinic reports, and may sign reports as the clinic’s authorized representative.  

2. The Clinic Director must serve as the primary contact person for both the LITC and the Department’s Office of Taxpayers’ Rights Advocate. 

3. The Clinic Director must be able to promptly respond to LITC inquiries and should have a thorough knowledge and understanding of the LITC’s operations. 

B. DELIVERABLES: A Qualified LITC shall provide the following: 

1. A mid-point status report shall be delivered to the Department on or before the first business day in February (February 1, 2027). 

2. A final status report shall be delivered to the Department on or before the first business day in June (June 1, 2027) and shall cover all work performed through the date of the mid-point status report through May 15, 2027. 

3. In very limited circumstances, a Qualified LITC may request an extension for additional time to submit the mid-point status report or the final status report. All such requests shall be made to Vincent Pease, at vpease@pa.gov, who shall have the ability to approve and deny extension requests for the Department. If an extension is approved, the due date for the status report will no longer be the date set forth herein.

C. COMPENSATION: For each deliverable provided to the Department on or before the due date set forth herein, or the due date as adjusted by an extension, and which is accepted by the Department, the Department will compensate the Qualified LITC half of the amount awarded under the bid.  No payment will be made if the Qualified LITC fails to provide a deliverable on or before the due date.

D. REPRESENTATION: The LITC must have a staff member or a pro bono panel member who is admitted to practice before Pennsylvania Courts to represent low-income Pennsylvania taxpayers in litigation matters. 

1. The Department’s Board of Appeals and Board of Finance and Revenue do not require any type of affirmative approval from the Department to allow representation, to include an LITC student intern, of a taxpayer. If that should change during the term of this agreement, the Department and the Qualified LITC agree to discuss the best way forward to address any requirements. 

2. The LITC staff may be granted third-party access to myPATH by following the instructions located on the Department’s website.

3. The Qualified LITC’s should copy the Office of Taxpayer Advocate, via Vincent Pease, at vpease@pa.gov. 

E. EDUCATION: The Department may offer at least one training session for Qualified LITCs on Pennsylvania tax law and procedure during the time frame covering this statement of work, if requested.  

F. PHYSICAL LOCATION: Qualified LITCs must maintain a physical place of business and a permanent address.  

1. A physical place of business means a permanent office space or location where low-income Pennsylvania taxpayers can be received and files are kept. 

2. LITCs may meet with low-income Pennsylvania taxpayers through other methods of communication used by their federal LITCs. 

G. CONFIDENTIALITY: The LITC, any participating student intern, and the Qualified LITC staff member(s), including but not limited to the Clinic Director, as described herein, is prohibited from disclosing details of any low-income Pennsylvania taxpayer’s confidential tax information to anyone who is not authorized to receive the low-income Pennsylvania taxpayer’s tax information. The Clinic Director is required to educate any student interns or staff on the laws and regulations regarding the confidentiality of low-income Pennsylvania taxpayer information.  

H. REPORTING:  

1. The mid-point status report shall include the following: 

i. A description of operations, which shall include but is not limited to: 

1. Tracking and management of cases, including hours spent per case; 

2. Supervision of staff;  

3. Maintaining confidentiality of low-income Pennsylvania taxpayer information;  

4. Administrative structure of clinic; and  

5. Method of attracting low-income Pennsylvania taxpayers. 

ii. Controversy data – to include but not limited to:

1. Dates of operation;

2. Number of low-income Pennsylvania taxpayer controversies provided representation, including hours spent per case;

3. Number of state tax controversies resolved;

4. Number of state tax controversies ongoing;

5. Number of state tax controversies consulting;

6. Type of state tax issues involved in each controversy;

7. Narrative of 3-5 controversies either in progress or completed;

8. Number of cases where the LITC made referral to Department;

9. Provide Phone Numbers / Department Bureau’s names that were contacted by the Qualified LITC for resolution of low-income taxpayer controversies;

10. Number of clients utilizing the FEC calculation;

11. Number of referrals for representing clients that exceed FEC;

12. Number of approvals for representing clients that exceed FEC;

13. Number of new cases opened in Federal tax controversies.

14.

iii. Any inappropriate disclosure of confidential information. 

iv. Any additional information as requested by the Department. 

2. The final report shall include the following:  

i. Controversy data – to include but not limited to: 

1. Dates of operation; 

2. Number of low-income Pennsylvania taxpayer controversies provided representation, including hours spent per case; 

3. Number of state tax controversies resolved;  

4. Number of state tax controversies ongoing;  

5. Number of state tax controversies consulting; 

6. Type of state tax issue that was involved in each controversy;  

7. Narrative of 3-5 controversies either in progress or completed; 

8. Number of referrals sent to the Department; 

9. Number of clients utilizing the FEC calculation;

10. Number of referrals for representing clients that exceed FEC;

11. Number of approvals for representing clients that exceed FEC;

12. Number of new cases opened in Federal tax controversies.

ii. Any other information useful to the Department in order to further its mission and determine where more state tax outreach is needed.  

iii. The department may update its data points listed herein before the final report is due to reflect any new information needed. 

iv. The final report shall include all work completed through the date of the mid-point status report through May 15, 2027. 

I. Notice of Change 

1. This statement of work and the requirements therein are subject to change at the discretion of the PA Department of Revenue with 60 days’ notice.