Empowering Farmworkers: Low-Income Taxpayer Clinic Ensures Access to Tax Justice

After getting married and having a child, Yovani Perez, an undocumented immigrant from Guatemala, wanted to stay in the U.S., start his own construction and painting business and pay taxes.

It was a scary step, Perez says, because applying for a tax I.D. number means coming out of the shadows as an undocumented person. “To start this process means that they’re going to know you’re here, even though you’re not supposed to be,” he says.

Then Perez and his wife, Kayla Kelechian, who live in Syracuse, New York, heard about a Cornell program that helps people with low incomes file their taxes. “When I heard about it, the first thing I did was say, ‘Can we get it?’” says Kelechian, a U.S. citizen. “With Yovani being undocumented, it was a real pickle. He wanted to do things the right way. It was a huge relief.”

Perez and Kelechian are two of the more than 200 clients who have benefited from the Low-Income Taxpayer Law and Accounting Practicum (LITLAP) since it was launched in 2016. Cornell is the first university in the country to offer a program of this kind.

The practicum helps its clients not only file taxes but also sort out complicated tax situations, from improper worker classification to dependents living in other countries, starting a new business and navigating the shifting tax code – all at no cost. The practicum was cofounded by John McKinley, professor of practice in the Charles H. Dyson School of Applied Economics and Management, and Beth Lyon, clinical professor and associate dean for experiential education and clinical program director at Cornell Law School, with support from the David M. Einhorn Center for Community Engagement.

About 75% of the clients are farmworkers, and most are undocumented. The practicum also collaborates with After Innocence to serve U.S. clients who have recently been exonerated from the criminal justice system or released from wrongful convictions.

Many farmworkers are introduced to the practicum by the Cornell Farmworker Program, which works closely with the practicum and is directed by Mary Jo Dudley, M.R.P. ’96. The practicum’s Cornell affiliation reassured Kelechian and Perez that they wouldn’t be scammed and their privacy and documentation would remain secure. “It’s hard to find these services that are culturally competent and can handle such fragile information,” Kelechian says.

“This is the first time many of these folks have tried to file taxes,” says Isaac Chasen ’23, who worked with about 20 clients over two years as an undergraduate. “They’re working on a lot of different fronts to try to build a life for themselves in America, and this is just about making that part of it easier for them.”

Many undocumented farmworkers don’t realize they are obligated to file taxes. “But for those who know or find out that they do, they do want to meet that tax filing obligation,” says Marquise Riley ’16, M.P.S. ’17, adjunct professor of law in Cornell Law School and accounting lecturer at Dyson, who co-directs the practicum. “We can teach them about what withholdings are, what forms to file and how to ensure that in the future, they avoid a huge tax liability.”

The clinic frequently sees clients who have paid a preparer $200 or more to file their taxes – only for the preparer to keep the money without ever actually filing. The client not only loses the preparation fee – a substantial amount for some – but also remains on the hook for the tax bill, says practicum co-director Ellen Kreitmeier, adjunct professor of law in the Law School.

“The tax industry is filled with fraud and incompetence. Clients are constantly being ripped off,” Kreitmeier says. “So at least we have given them security that their taxes are done correctly.”

Students work with clients initially, in consultation with the practicum instructors, to prepare draft tax returns, then pass the returns and other documentation to the instructors for a final sign-off. The practicum, housed in the Law School, is a partnership between the Law School and the Dyson School, part of the Cornell SC Johnson College of Business.

It was worth it to take the leap to file his taxes, Perez says. “You can’t always live hidden. You have to have a life – not just [go from] work to home, home to work. You have to take children to the park. Undocumented workers have to do things just like every other human, and live life.”

Creating a stable foundation

Undocumented workers don’t have social security numbers, which would allow them to file taxes. So the first step is to apply for an Individual Taxpayer Identification Number, or ITIN, which is issued by the IRS, for tax purposes only, to those who are unable to obtain a social security number. The practicum has secured more than 35 ITINS for clients since it launched. To facilitate the case processing, the practicum directors are IRS Certified Acceptance Agents.

Applicants usually have to send the IRS original documents, such as passports, birth certificates and drivers licenses, to apply for an ITIN, but the practicum allows clients to skip that step; the instructors are certified by the IRS to vouch that the documents are authentic.

Several benefits come with securing an ITIN, including that it can help prevent a client from getting deported in the court system.

“In some cases, when a judge gets our paperwork saying we’re applying for this person’s ITIN and filing their taxes, they will pause the proceedings,’” Riley says. “The rationale we’ve heard is, it’s a sign of ‘good moral character’ for them to meet their tax obligations while in the United States.”

In one instance, a student pulled together three years of tax paperwork for a client; and even though the client hadn’t yet filed them, “just presenting the papers to the court stayed the deportation. It was really remarkable,” Kreitmeier says. “Tax compliance can be like a life preserver for them.”

The clinic also advocates for clients who have run afoul of the IRS’s complex bureaucracy. One student secured $20,000 for a client who had been filing taxes for three years and never got their refund due to an IRS error.

Students can explain to self-employed clients, such as domestic workers, daycare providers and house cleaners, that they have to set aside at least 15% to 20% of their income to pay for income tax, social security and Medicare tax. Otherwise, back taxes can add up; some clients have had tax liability as high as $10,000 for one year.

“I feel it’s really important to teach them how the system works and doesn’t work as well,” Kreitmeier says. “It takes a lot of explaining and a lot of time.”

Perhaps most importantly, the clinic sets clients up to pay taxes properly going forward.

“They’re not having to go back several years, and potentially owe a lot of money for those years because they’ve avoided the whole process,” Riley says.

McKinley, Lyon, Riley and Adam Vars, M.P.S. ’22, published an article in June in the Business Education Innovation Journal on this curriculum, which the University of Hawai’i, Manoa, has emulated.

And Thomas Godwin, professor of practice at Dyson, is building off the practicum’s work with a new course running a Volunteer Income Tax Assistance site for Tompkins County. The course, LITLAP – Tompkins Area Compliance and Consulting, brings free tax-preparation services to the Ithaca area with Cornell as the lead agency.

Learning by doing

The program also provides students with the chance to deepen their understanding of tax, law and the art of working with clients. More than 50 students have participated, earning class credit.

Students first take a prerequisite course in federal income taxation of low-income taxpayers, through which they get a Volunteer Income Tax Assistance certification. After enrolling in the practicum class, students are paired up, assigned a handful of clients, conduct interviews with clients to learn about their goals, gather documentation and prepare returns and do other tasks. They discuss the various tax issues their clients are facing in the weekly practicum class sessions, led by Riley and Kreitmeier.

“It has deepened my passion for helping folks who, for whatever reason, have been dealt a bad hand by the legal system,” says Chasen, who earned a B.S. degree in applied economics and management with a minor in law in society. “Helping them understand the law, or claim whatever financial credits they are entitled to that they just don’t know how to claim, can make a big difference.”

It has also helped Chasen understand the challenges clients face, especially farmworkers. “When you’re talking to them, they may say, ‘I’ve just come off a 12-hour shift in the hot sun.’ So you understand that and you may have to wait a day or two to get the information you need, but that’s OK.”

Students also participate in service trips, for example to Bakersfield, California, to assist farmworkers there in partnership with the United Farm Workers. And they’ve led tax compliance and financial literacy workshops with community groups in Queens, New York, and Chicago. In February, 10 to 15 students travel to Anchorage, Alaska, for a week, to assist the Alaska Business Development Center, a community group that helps people in rural villages meet their tax obligations.

“We’re very proud of the practicum and the generations of students who have transformed lives and communities,” McKinley said. “Although accountants and lawyers work together extensively in all areas of American life, very few universities provide experiential opportunities for them to collaborate as students, learning to work across distinct training backgrounds, work modes and ethical obligations.”

The practicum experience has translated into Chasen’s current work, in public financing investment banking in New York City.

“I’d absolutely say that the practicum experience has helped me develop the skills and professionalism necessary to interact with clients,” he says, “and that has been immensely helpful as I have started work following graduation.”

The practicum has been helpful for Perez and Kelechian, too.

Over two years, students helped Perez apply for and secure an ITIN. He and Kelechian filed jointly, and he was able to pay the correct amount of taxes on $15,000 he received from New York state’s excluded workers fund, for undocumented immigrants who lost work during the pandemic. And Kelechian got a $2,700 refund from the previous year that included pandemic-related relief she didn’t know she had been eligible for.

“Even if it’s just a little bit of money that comes back into our pockets, that really makes a difference,” Kelechian says. “We can provide a little bit more for our child, we can make an extra payment on something, especially on health insurance. Whatever amount of money comes back, it’s a huge help.”