Preserving Income

Joe’s tax liability arose from unpaid federal income tax for the years 2017, 2018, and 2019. During those years, he was romantically involved with a woman, eventually moving in with her. She offered to take care of his finances and paperwork, and he gratefully accepted, conceding his cognitive challenges and lifelong difficulties with such matters. Over time, his trust in her proved to be misplaced, and his guileless generosity mixed badly with his limitations. He agreed to open a joint checking account with her, and then he agreed to deposit all of his retirement funds into it.

Eventually, the money ran out. She evicted him, and he was left homeless and nearly broke. He didn’t even have a car to sleep in. And because no taxes had been withheld from the retirement fund distributions – and none were paid at tax time –- he incurred a federal income tax liability of almost $40,000. Given his advanced years and poor health, he can’t work any longer, and his sole source of income is under $1,300/month in Social Security retirement benefits.

Fortunately, Joe turned to a trusted relative for help, who contacted 603 Legal Aid’s Low-Income Taxpayer Project. The tax clinic completed the required forms for an IRS offer in compromise and helped Joe and the family member assemble all the needed documentation. The tax clinic then submitted the package to the IRS, explaining Joe’s circumstances, stating the legal basis for the compromise, and advocating for a settlement of the federal tax liability in an amount Joe could afford — $50.

A year later, an IRS offer analyst contacted the tax clinic, asked a few questions, and then agreed to accept the $50 offer, wiping out the rest of Joe’s tax debt.

Joe and his family member expressed relief and gratitude to 603 Legal Aid: “You have been amazing! I can’t thank you enough!”

Heather is 46 years old and currently lives in the Salem area with her husband and two teenage daughters.

She worked as a licensed certified occupational therapy assistant for more than 15 years. But throughout her life, Heather dealt with increasingly painful menstrual periods. Her pain became so severe her physician recommended a total hysterectomy – but that was not the end of Heather’s struggles.

After the operation, Heather developed post-operative bleeding and other life-threatening complications. She underwent multiple nerve block injections, months of physical therapy and additional surgical procedures without relief. As a result, she now suffers from severe pain, increased with any form of physical activity.

After she exhausted her medical leave, Heather’s employer fired her. It wasn’t long before she and her husband, who works as a security guard, fell behind on the mortgage.

“I couldn’t do anything. I was watching the girls learn to cook, to clean, to be in charge of the house because my husband was picking up extra shifts, and I couldn’t do anything to help. It was a horrible feeling, that helplessness,” Heather says.

Heather applied for Social Security Disability benefits in 2015, but her application was denied.

“It’s a shameful feeling, to go from working and supporting your family to asking for help. I didn’t want to do it, but there’s no way I could do this on my own. We were drowning,” she said.

NHLA represented Heather at her appeal hearing in 2017, and presented new and compelling physician opinions to support Heather’s own testimony about her pain and symptoms. Later that month, almost three years after losing her job, Heather was approved for disability benefits.

“It was a hard, hard day. I was so nervous, it made my pain so much worse. And I’m someone who, when I’m hurting, I don’t want anyone to know. But it was good, really, for the judge to see how bad it is. I was red, I was sweating. It’s horrible, this pain, all the time, but I was so scared, so worried about what might happen if I was denied again, it was worse,” she said.

With NHLA’s help, Heather was granted on-going disability support and awarded a retroactive lump sum of more than $48,000, which she used to pay off the overdue mortgage payments just a few months before the foreclosure auction.

“It’s the only real home my girls have known, and I can’t imagine them losing this, and us losing every bit of equity we had built up and having to start over somewhere,” Heather said.  “I just can’t imagine where we’d be without legal aid.”

Horace* graduated from basic training with the military on his 18th birthday.

“I’m just patriotic, I guess. I wanted to serve,” he said, reflecting on his two years in the Air Force and his decision to re-enlist in the National Guard when he returned home to Littleton.

During his time with the Guard, he suffered a back injury that left him with herniated disks, unable to lift much weight, or stand or sit for extended periods of time. It effectively ended his career in construction and trucking.

“They told me I’d be in a wheelchair by the time I hit 60, . . . but when I applied for Social Security, they denied I had a disability,” Horace said.

“I was really at a loss, I didn’t know what to do,” he said.

An NHLA advocate worked with Horace to secure his benefits.

“If it wasn’t for (my advocate) I would still be fighting to get my disability benefits. I wouldn’t have gotten it if she hadn’t directed me through that maze. I never wanted to be rich, but it’s made my life so I can tolerate it. It’s just made such a difference. I’m no longer on food stamps. It gave me back some of my pride.”

*Client name has been changed