Via LSC Blog
The tax issues faced by Native Alaskan tribal members are unusually complex. Those complexities stem not only from the area’s chief economic driver – fishing – but also from how tribes are governed, and the multigenerational family structure of Native Alaskans in rural Alaska.
This spring, LSC Tax Clinic 3L students Lydia Austin and Lauren Deutsch took a deep dive into those complexities. They traveled to Alaska to help more than 200 Alaskans, the majority of whom were Native Alaskan tribal members. Some of these Alaskans had not filed tax returns for two years due to social distancing that precluded in-person visits from the Alaska Business Development Center (ABDC), an Anchorage based nonprofit that provides free-tax preparation services to under-resourced rural Alaskan communities.
LSC’s efforts mean many of those aided this year will receive thousands of dollars in government aid that they might not have been able to access otherwise. Significant COVID-related government assistance was available in 2020 and 2021 through Economic Impact Payments (stimulus funds) provided through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the increased Child Tax Credit. But those funds can only be received by people filing returns for those years.
Austin and Deutsch were joined in their efforts by Jon-Yin Mills Chong, an accountant in LSC’s Tax Clinic, and Marianna J. Yang, Clinical Instructor in LSC’s Family/ Domestic Violence Law Clinic, who also traveled as part of the LSC contingent. Chong participated in the Alaska program when he was a masters student studying accountancy at Cornell. This year the ABDC, which runs the tax assistance program, had few qualified volunteers to help file returns, and reached out to him looking for help.
“During COVID, ABDC only did returns for existing clients,” Jon-Yin explains. “This meant that other people needing help had not submitted returns in two years. When the call came, there was no way I could say no, realizing how our efforts could put much-needed additional money into people’s pockets. I was thrilled that Lydia, Lauren and Marianna agreed to join me during the Spring break to help in this important work.”
Both Austin and Deutsch were students in the LSC Tax Clinic in the fall and continued as advanced students during the spring semester. Austin, who is a Berkeley Law student on an exchange program with Harvard Law, has a job as a tax attorney in the San Francisco Bay area lined up after graduation. Deutsch will also work as a tax attorney after graduation, and is headed to Houston, Texas.
Taxing Ins and Outs
“Fishing, as primary way people make a living, requires complicated record keeping. Income is by the weight of the fish caught, and there is a large number of expenses to track,” says Austin, when explaining some of the issues involved in filing tax returns for Native Alaskans.
Tribal corporations set up to manage the affairs of the tribe distribute money to tribal members, and some individuals also receive income for serving on tribal boards. That income in some cases is taxable and in other cases is not, depending on IRS regulations, Austin adds.
“Because Native Alaskans predominantly live in multigenerational households, it can even be unclear who to list as the “head of the household” and on whose return children should be listed as dependents on returns,” notes Deutsch.
The training ABDC requires for its tax return volunteers is even more rigorous than that required by the Volunteer Income Tax Assistance (VITA) programs, which offer free tax help to people who generally make $57,000 or less, including persons with disabilities, the elderly and taxpayers who speak limited English and need assistance in preparing their own tax returns. Before heading to Alaska, the four LSC volunteers had to pass certification course on the IRS website and then do 14 model tax returns which were reviewed by the ABDC team.
The foursome then traveled to ABDC offices in Anchorage where they worked on returns, including quality review and double-checking information prepared by others, in a few cases correcting returns that resulted in thousands of dollars more in refunds than originally prepared.
“It was great to be in person, having access to ABDC staff when we had issues and questions, and getting plugged into their systems as well,” said Austin. “Learning about the residents, their villages, and how they live their lives was an incredible experience I will never forget.”