Frank Agostino’s clients are way behind on their taxes. The husband and wife worry that they’ll have to sell their house. The wife wants to plead with the IRS for more time. But she won’t leave her home.
Agostino, CEO of Agostino & Associates PC, plans to ask the Tax Court to accommodate these taxpayers on grounds of mental health. “The [COVID-19] virus has got her petrified,” Agostino said, “and the thought that she has to sell her home and live in an apartment where other people could be getting sick is terrifying.”
Tax Court Judge Diana Leyden made an unusual plea to tax lawyers and other practitioners attending a June 10 American Bar Association webinar on working with mentally impaired petitioners: Learn to recognize, identify, and request assistance for those with mental disabilities, cognitive impairment, diminished capacity to assist or understand their defense, or learning disabilities.
Leyden said that with proper identification, mentally challenged Tax Court petitioners could be granted special appointment times to work around medication schedules, more frequent breaks, or limits on technology that has proved problematic for some, such as the Zoom videoconference platform.
Petitioners aren’t the only people who appear before the Tax Court who may need help, Leyden added. “Disabilities are an equal-opportunity issue,” she said. “There are judges, there are lawyers, there are professionals who also deal with disabilities and mental health.”
Online Court Challenges
Leyden noted that the Tax Court plans to resume conducting trials online this fall.
“The big issue going forward will be the fact the hearings are remote, via Zoom,” said Christina Wease, supervising attorney of the low-income taxpayer clinic at the Michigan State University College of Law. “We are still speaking with our current clients and other practitioners to try and anticipate the roadblocks a low-income taxpayer, an [English-as-a-second-language] taxpayer, and a taxpayer with a disability might experience with the new format.”
Zoom can be difficult for viewers who are on the autism spectrum because they may have difficulty distinguishing multiple faces or making eye contact, noted Leyden.
It’s also harder for Tax Court and IRS personnel to spot the telltale outward signs of petitioners who may need mental help, Leyden said.
Practitioners and petitioners’ attorneys often have better insight into their clients’ mental capacities, and they should notify the Tax Court as soon as they have reason to suspect their client will need an accommodation, Leyden said.
Tax attorneys can also request that the court approve a “next friend” — usually a close friend or relative — who can assist and advise in the mentally impaired taxpayer’s defense, Leyden said. Guardians and conservators can also be named for the client, she added.
But recognizing mental illness is something for which Tax Court personnel are not usually trained, Leyden said. The Tax Court sometimes becomes aware of petitioners’ mental impairments when the IRS attorneys start filing motions for summary judgment or to dismiss the case. They’ve talked with the petitioner and found them unresponsive or incoherent, she said.
Forms and Documents
Some tax professionals said tax administration itself could be at the heart of many of these cases.
“The IRS does redesign its notices with the public in mind, but most of the time it misses the mark,” Wease said. “When the clients call the IRS to clarify the notice, it can be even more confusing. So many of our cases would not even be cases if the taxpayer understood what was on his tax return and understood what was being requested by the IRS.”
Nina Olson, CEO of the Center for Taxpayer Rights, said, “Anytime you have a form- and documentation-intensive environment, which is what tax administration and litigation thrives on, you automatically create barriers for the disabled.” For example, blind petitioners need adaptive technologies, and deaf taxpayers need sign language interpreters or voice recognition technologies, she noted.
“All of these challenges are multiplied for persons with cognitive disability,” added Olson, formerly the national taxpayer advocate. “They need time and patience, but they can understand what is needed. Unfortunately, today, our tax system is not designed to give its taxpayers time or patience in the normal circumstances.”
Rewriting forms and documentation to make them clearer is a worthy goal, Olson said, but “I don’t think it is just making them understandable; it is also making them accessible.”
“Accessibility means format, language, adaptability to technology, and also provision of assistance — real, person-to-person assistance,” Olson said.
But Olson added that she is also concerned about the tax agency’s commitment to clarity and accessibility in the long term. “The issue with the IRS is, it does a good job at the beginning of a crisis [or] disaster, such as flooding, etc., but as time goes on, the agency forgets, and people fall back into their enforcement mentality,” she said.
COVID-19 Impacts
There are no data on how many mentally challenged taxpayers appear before the Tax Court. Agostino said he handles at least one a month. But a big part of the problem, he said, is that “no one has come to Tax Court and said, ‘I’m mentally challenged, and I need help.’”
More than 70 percent of Tax Court petitions are filed pro se, noted T. Keith Fogg, founder of the Harvard University Federal Tax Clinic. “The difficulty is for people unrepresented who, because of their difficulties, do not know how and when to raise their hand and request assistance,” he said.
The COVID-19 pandemic is already making things worse on this front, Olson and Agostino agreed. People with disabilities have been among the first to lose their jobs during the state lockdowns, Olson said. Their difficulties accessing state unemployment insurance authorities — much less Tax Court appointments and deadlines — can put an added strain on their mental health, she said.
The IRS is also struggling to bring back employees fearful of catching COVID-19 from their coworkers in offices and processing centers, Agostino noted. “Why would you think those same mental health challenges aren’t being faced by [IRS employees], who have a guaranteed paycheck?” he said.
“Some mental health challenges create disabilities; those disabilities should be recognized by the court,” Agostino said. Olson observed that people struck by the virus may take weeks or months to recover, potentially creating more mental disabilities.
‘Big-Boy Pants’
Agostino said he’ll ask the Tax Court for an accommodation for his husband-and-wife clients. She’s 70, at higher risk for infection, and has lost a relative to the pandemic, he said. “This one is good” for a court order rendering the taxpayers’ debt as currently not collectible, or making some partial payment arrangement, he said.
Yet some IRS attorneys too frequently “don’t acknowledge mental health,” Agostino said. “They think that mental health is just another excuse, so proving it becomes the issue.” Some Tax Court judges grant extensions based on reasonable fears, “and others will say, ‘Put on your big-boy pants and get down here,’” he said.
While some Tax Court attorneys are more accommodating than others, Fogg said, “I think Tax Court judges and IRS attorneys would try very hard to assist someone with cognitive impairment if they identified it. Because the judges will not come face-to-face with the individual petitioner until calendar call, it may be difficult to identify difficulties until a late hour in the case.”
“In collection due process, the mental health professional is becoming more important,” Agostino added. Recently the Tax Court has proved more willing to call for, and more likely to give credence to, testimony from mental health professionals about a taxpayer’s state of mind, he said.
The financial effects of tax collections on mentally challenged taxpayers, who are often financially strapped but also need money for medications and therapy, can weigh in favor of more lenient repayment arrangements, Agostino said.
“I don't think the Tax Court will feel hamstrung by the legal definitions of a disability,” said Patrick W. Thomas, founding director of the Notre Dame Law School Tax Clinic. “So long as there's a reasonable explanation for why the accommodation is needed, I suspect the court will either grant it or work with the petitioner to find a solution.”