As a nation, we owe a great deal to our veterans for the sacrifices they make in service to this country. The active duty challenges faced by soldiers are enormous, but veterans also encounter well-documented obstacles when they transition back to civilian life.1 Many struggle to cope with physical or psychological trauma, navigate the labyrinthine Veterans Affairs bureaucracy, find housing or employment, or simply readjust to everyday life. A less-discussed but common issue that can burden their return to civilian life is tax trouble.
Military personnel and veterans face a unique set of tax issues.2 The rules surrounding combat pay, various allowances and exclusions, pensions, and disability benefits can be confusing, and the plethora of federal statutes providing for special procedural rules for servicemembers and their families—though beneficial when properly utilized—can easily entangle those unfamiliar with the details.
With nearly a quarter-million veterans, San Diego County is the home to the third-largest veteran population in the United States.3 Catherine Strouse, a 2016-2018 Christine A. Brunswick Public Service Fellow, works at the Legal Aid Society of San Diego (LASSD) to help struggling veterans returning from active duty understand the special rules applicable to them. She provides tax representation and financial counseling to veterans throughout San Diego and the surrounding area. The services Catherine provides have helped numerous individuals get a fresh start in civilian life.
ABA Tax Times (ATT) recently contacted Catherine (CS) to discuss the important work she is doing through her Fellowship.
ATT: Can you tell us a little bit about your background and prior work experience, both in and out of tax?
CS: I attended college at the University of California, San Diego. My dad is an attorney, so I knew I wanted to follow in his footsteps. However, like many prospective law students, I was unsure what area of the law I wanted to practice in. I attended law school at Gonzaga University School of Law, where I graduated cum laude. I began developing an interest in estate planning after my experience in the school’s Elder Law Clinic and had plans to pursue a career in estate planning after graduation.
Shortly after taking the California Bar Exam, I moved back to San Diego to begin my legal career. While waiting for bar results, I began volunteering with the LASSD. I started in the Domestic Violence/ Civil Harassment Restraining Order Clinic. This clinic helps pro se litigants apply for and defend against temporary restraining orders. I started volunteering two days a week, which quickly developed into four days a week due to the high demand for volunteers.
After successfully passing the bar exam, I was fortunate enough to be hired as an adjunct professor for an online law school, Taft Law School. I began teaching an elective course in healthcare law for 2nd and 3rd year students. I have since been the adjunct professor for courses in Contracts, Torts, Constitutional Law, Administrative Law, and Criminal Procedure. Teaching provided me support while I continued volunteering and job searching.
Finding employment in San Diego proved to be more difficult than I had imagined. On the advice of a few practicing attorneys, I decided to pursue an LL.M. in Taxation at the University of San Diego School of Law. I also began volunteering with LASSD’s Low Income Taxpayer Clinic (LITC) to gain more experience in tax law. As a volunteer attorney, I was able to take on my own cases and quickly learned how important the work of an LITC is for low-income individuals. Through this volunteer experience, I felt I had found an area of the law where I belonged and truly could make a difference.
ATT: What made you apply for the Fellowship?
CS: I was volunteering with the LASSD in their tax clinic during a site visit from the LITC funders in 2015. During the visit, LASSD’s Tax Clinic Supervisor, Shahin Rahimi, introduced me to the LITC visitors—including Bill Nelson, the LITC Program Director at the time. After hearing my volunteer background and my recent graduation from the LL.M. program, Mr. Nelson suggested I apply for the Fellowship. I quickly went home and researched the Fellowship. After reading the description, I felt this was the perfect opportunity for me to continue my passion for helping low-income taxpayers resolve their tax debts with the Internal Revenue Service.
ATT: Could you tell me more about your sponsor organization and how you came to choose that organization?
CS: The LASSD is the largest poverty law firm in San Diego County. They help low-income residents of San Diego County in a variety of legal areas including consumer, health and welfare, immigration, housing, family, and tax. The organization has over 130 staff members who are all focused on making a difference for San Diego County residents.
I chose LASSD as my sponsoring organization because of the existing relationship I had with the organization and the LITC program. At the time I applied for the Fellowship, I had been volunteering in the tax clinic two days a week for over a year, so it seemed like a natural fit. I was very familiar with the tax clinic, the type of cases we see, and procedures for contacting the IRS. LASSD screens for veteran status during the intake process: at the time I applied, the LITC client list included several veterans making it an easy decision to focus on this deserving group of individuals. I felt confident that I could jump right in and zealously represent our clients, if I was chosen for this Fellowship.
ATT: Please tell me about the work you do. What sort of projects are you working on?
CS: My program is designed to provide representation for state and federal income tax issues to the veteran population in San Diego County. The County is home to one of the largest veteran population with more than 230,000 veterans. Outstanding tax debts can provide one obstacle to individuals or families who are trying to obtain housing or employment. I work with individuals and families to help eliminate or manage this obstacle so that clients can maintain their standard of living. Some of the services I provide are assisting clients to challenge a tax liability that was incorrectly assessed, negotiating offers in compromise, setting up installment agreements, and educating clients on the tax law.
Another component of my Fellowship involves providing one-on-one financial counseling to veterans. Many clients have never checked their credit report or are afraid to check their credit report. I work with the clients to access their credit reports and review the information on the credit reports for accuracy. If there is inaccurate information, I assist clients with disputing that information. We also discuss repayment options, how to manage debt, and ways to build credit to improve their credit scores. I also work closely with our consumer team and will refer clients who need more extensive services, such as bankruptcy help, to the consumer team.
Our LITC also actively participates in the Tax Section’s Adopt-A-Base program, where we teach substantive tax law to military personnel who prepare tax returns at the military Volunteer Income Tax Assistance (VITA) sites. This year, we taught on three military bases and also provided an advanced topics training on cancellation of debt, rental income, business income and expenses, and capital gains for one of the military installations.
ATT: What has been your biggest challenge so far?
CS: The biggest challenge of my Fellowship so far has been working with clients to resolve their state income tax issues. During my time volunteering with the LITC, I did not have very much exposure to state tax issues. However, when I started with my Fellowship, I saw state income tax issues come up more often and felt this was a need that I should fill.
Learning about the available programs at the California Franchise Tax Board and how our clients can best utilize these programs has been a struggle. In some cases, my clients have not filed so we can provide assistance preparing returns that clear up the balances that have been assessed. However, in many cases, there is a balance that we cannot dispute. In these cases, I review the collection alternatives available for that client and help the client apply for the best option so that we avoid any garnishments. I am constantly learning new information at the state income tax level and believe representation for low-income taxpayers is critical in these situations.
ATT: What has been the most rewarding part of your Fellowship?
CS: Working in a LITC is a rewarding experience on its own. I feel the most rewarding part of my Fellowship is working with homeless veterans to help them move forward with their lives. Several of my clients come from a rehabilitation program that houses veterans for up to two years, provides job training, and connects veterans with resources such as legal services. These veterans work hard in this program to start a new life and it is a wonderful experience to help manage or eliminate a tax debt that someone believed would never go away.
One client in particular from this program has been working with the IRS to resolve his tax debt for many years. At the time the IRS initially contacted him, this client was employed and was able to hire a tax firm in town to help him set up an installment agreement. Shortly after setting up this installment agreement, the client lost his job and was never able to make a payment. The client eventually ended up in the rehabilitation program after experiencing a period of homelessness and was able to resume dealing with his outstanding tax liability. We successfully placed his active collections accounts into the “currently not collectible” category. Our goal is to resolve his tax debt of $12,000 through an offer-in-compromise before he graduates from his program so he can start with a clean slate.
ATT: Do you have any immediate plans for your work after the Fellowship ends? How has the Fellowship impacted your career goals? Do you expect to stay with your sponsor organization after the Fellowship has ended?
CS: I do not have any immediate plans for after the Fellowship, but I am only about half way through the Fellowship. I would love to stay with LASSD after the Fellowship ends. However, funding can be an issue when trying to work in the public interest sector. My supervisor and I are working on applying for new grants that would allow me to continue my work as a staff attorney. I am hopeful that we will find funding. But no matter what happens, I plan to stay involved with LASSD in any capacity that my future allows. ■
For more information on how to get involved with the Section of Taxation’s Adopt-A-Base Program, please contact Derek Wagner. For additional opportunities to provide legal assistance to servicemembers, veterans, and their families, please visit the ABA Military Pro Bono Center.
The Christine A. Brunswick Public Service Fellowship is supported by the Tax Assistance Public Service (TAPS) endowment fund. To learn more about how you can support the important work of Catherine and other Public Service Fellows, please visit the TAPS webpage.
2 See IRS, Armed Forces’ Tax Guide: For use in preparing 2016 returns (Publ. 3); see also, https://www.irs.gov/individuals/military.