New Maryland law lets low-income taxpayers get help with state taxes

Clinics designed to assist low-income Marylanders with tax disputes can offer legal guidance on state as well as federal issues under a new law the General Assembly passed earlier this year.

For Donald B. Tobin, dean of the University of Maryland Francis King Carey School of Law and a key champion of the new legislation, expanding the tax clinics’ reach is critical to ensuring that low-income people have equitable access to help with tax disputes.

“It’s foundational to me, for a just society, that low-income people feel like they’re getting a fair shake when they’re dealing with tax authorities,” Tobin said in an interview.

The low-income taxpayer clinics rely on IRS grants that support their work on federal tax issues or related state tax problems, but do not cover disputes that are solely related to state taxes.

The new legislation adds another source of funding for the next two years: $250,000 from the state’s Unclaimed Property Fund that will allow the clinics to offer help with state taxes.

Beginning in 2024, the governor can choose to continue the funding in the annual state budget.

The law provides for grants to the three entities that offer low-income taxpayer clinics in Maryland: the University of Maryland Carey School of Law, the University of Baltimore School of Law, and the Maryland Volunteer Lawyers Service.

The clinics do not help prepare tax returns, but they can offer free help managing tax-related disputes or legal problems.

At the state level, that can include holds on a Maryland driver’s license or vehicle registration, Earned Income Tax Credit denials, audits and other issues.

“Many people who encounter legal problems with their taxes are those who can least afford it,” Comptroller Peter Franchot said at a news conference earlier this month at the University of Baltimore School of Law.

“Just as renters facing eviction need access to counsel, so do taxpayers with complicated state-specific legal tax issues. This law, and the funding it provides, helps level the playing field, so existing tax clinics can assist low-income Marylanders at no cost.”

Tobin said it’s common to see clients who, for any number of reasons, haven’t paid taxes in years or misunderstand their tax status and need help handling a complicated web of legal problems. The clinics can ensure that low-income taxpayers know about available resources and have representation from a lawyer if needed.

“For me, when people think about social justice and when people think about equality, they often don’t think about money and taxes,” Tobin said. “But economic justice is just as central to the success of a just society as anything else.”

Del. Sandy Rosenberg, D-Baltimore City, sponsored the House version of the bill. In an interview, he likened the tax clinic legislation to a bill passed this year that grants certain tenants access to legal counsel in evictions — though the measure fell short of establishing a “right to counsel” in eviction proceedings.

“We spend all this time in Annapolis deciding what the law should be, but if you don’t have a lawyer and the other side does, you are at a severe disadvantage,” Rosenberg said.