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The MSU College of Law Alvin L. Storrs Low-Income Taxpayer Clinic is a free legal-aid clinic that provides legal services to low-income taxpayers who are in controversy with the Internal Revenue Service and educational services relating to tax matters to those for whom English is a second language. We will arrange to meet with clients at other times on an as-needed basis.  The Tax Clinic also provides important tax-related legal services to indigent Michigan taxpayers.

At the same time, the Tax Clinic offers an excellent clinical education program for MSU College of Law students, extending learning beyond the classroom for the benefit of the community. Students receive 10 weeks of intensive training on IRS practice and procedures.  They must also complete 296 service hours each semester.  Under Michigan Court Rule 8.120, second- and third-year law students are permitted to represent Tax Clinic clients under the supervision of clinical faculty, all of whom are members of the State Bar of Michigan with experience in tax law.

The Tax Clinic handles all aspects of controversy with the IRS, including representing taxpayers in cases before the United States Tax Court, the United States District Court, and federal appeals courts.

2020 Tax Return Tutorials - For International Students and Scholars

Due to COVID pandemic we will not be holding tax return workshops again this year.  However, below are informational materials to assist international students and scholars who are nonresident aliens for the 2020 tax year.  If you have a question about whether you are a nonresident alien for tax purposes, check our Nonresident Worksheet.

Federal Form (1040NR) & Glacier

If you are affiliated with Michigan State University, you may be eligible to receive a free code to use the Glacier tax return preparation software.  Contact the Office of International Students and Scholars for more information.

State of Michigan (Form MI-1040)

City of East Lansing (Form EL-1040) 

Emergency aid granted to students due to COVID are not taxable

Posted: 3/31/2021

IRS explains student and higher education institution reporting requirements, credits and deductions

WASHINGTON – The Internal Revenue Service issued frequently asked questions today on how students and higher education institutions should report pandemic-related emergency financial aid grants.

Students
Emergency financial aid grants made by a federal agency, state, Indian tribe, higher education institution or scholarship-granting organization (including a tribal organization) to a student because of an event related to the COVID-19 pandemic are not included in the student’s gross income. 

Also, students should not reduce an amount of qualified tuition and related expenses by the amount of an emergency financial aid grant. If students used any portion of the grants to pay for qualified tuition and related expenses on or before December 31, 2020, they may be eligible to claim a tuition and fees deduction or the American Opportunity Credit or Lifetime Learning Credit on their 2020 tax return. See Education FAQs.

The tuition and fees deduction is not available for tax years beginning after December 31, 2020. For additional information on these credits and the tuition and fees deduction, see Publication 970, Tax Benefits for Education.

Higher Education Institutions
Because students don’t include emergency financial aid grants in their gross income, higher education institutions are not required to file or furnish Forms 1099-MISC reporting the grants made available by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) or the COVID-related Tax Relief Act (COVID Relief Act) and do not need to report the grants in Box 5 of Form 1098-T. 

But any amounts that qualify for the tuition and fees deduction or the American Opportunity Credit or Lifetime Learning Credit are considered “qualified tuition and related expenses” and trigger the reporting requirements of Internal Revenue Code section 6050S.  Higher education institutions must include qualified tuition and related expenses paid by emergency financial aid grants awarded to students in Box 1 of Form 1098-T. 

IRS warns university students and staff of impersonation email scam

Posted: 3/30/2021

WASHINGTON – The Internal Revenue Service today warned of an ongoing IRS-impersonation scam that appears to primarily target educational institutions, including students and staff who have “.edu” email addresses.

The IRS’ phishing@irs.gov has received complaints about the impersonation scam in recent weeks from people with email addresses ending in “.edu.” The phishing emails appear to target university and college students from both public and private, profit and non-profit institutions.

Taxpayers who believe they have a pending refund can easily check on its status at “Where’s My Refund?” on IRS.gov. 

The suspect emails display the IRS logo and use various subject lines such as “Tax Refund Payment” or “Recalculation of your tax refund payment.” It asks people to click a link and submit a form to claim their refund.

The phishing website requests taxpayers provide their:

  • Social Security Number
  • First Name
  • Last Name
  • Date of Birth
  • Prior Year Annual Gross Income (AGI)
  • Driver's License Number
  • Current Address
  • City
  • State/U.S. Territory
  • ZIP Code/Postal Code
  • Electronic Filing PIN

People who receive this scam email should not click on the link in the email, but they can report it to the IRS. For security reasons, save the email using “save as” and then send that attachment to phishing@irs.gov or forward the email as an attachment to phishing@irs.gov. The Treasury Inspector General for Tax Administration (TIGTA) and IRS Criminal Investigation have been notified.

Taxpayers who believe they may have provided identity thieves with this information should consider immediately obtaining an Identity Protection PIN. This is a voluntary opt-in program. An IP PIN is a six-digit number that helps prevent identity thieves from filing fraudulent tax returns in the victim’s name. 

Taxpayers who attempt to e-file their tax return and find it rejected because a return with their SSN already has been filed should file a Form 14039, Identity Theft Affidavit, to report themselves as a possible identity theft victim. See Identity Theft Central to learn about the signs of identity theft and actions to take. 

UPDATE on Economic Impact Payments or “Stimulus Checks”

By Julia Habhab

Posted: April 27, 2021

Economic Impact Payments are commonly known as “stimulus checks” or “recovery rebates.” Its intent is to help reduce the financial burden on individuals and families that was caused by COVID-19. There have been three EIP disbursements. I then summarize with common questions and source links.

The First EIP

The first round of stimulus checks were distributed in April 2020. Most recipients received the EIP via Direct Deposit. Others have received the EIP via check or debit card. In December of 2020, the IRS began delivering a second round of stimulus checks to millions of Americans who received the first round of payments earlier in the year. The IRS emphasized that there is no further action required by eligible recipients in order to receive the second payment.  

Who is eligible for the First Economic Impact Payment?

Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible. Social Security recipients and railroad retirees who are otherwise not required to file a tax return are also eligible and will not be required to file a return. Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child. 

The Second EIP

In January of 2021, the second round of stimulus checks were distributed. If you are a U.S. citizen or U.S. resident alien, you may be eligible for $600 ($1,200 for a joint return), plus $600 for each qualifying child, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2019 return, have a social security number, and your adjusted gross income does not exceed: $150,000 if married and filing a joint return or if filing as a qualifying widow or widower; $112,500 if filing as head of household; or $75,000 for eligible individuals using any other filing status

The Third EIP

In March of 2021, the third round of stimulus checks were distributed. Most eligible people won’t need to take additional action to get the third payment. However, due to new income limitations, some individuals won’t be eligible for the third payment, even if they received the first or second.

Generally, someone is eligible for the full amount of the third Economic Impact Payment if they: are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and are not a dependent of another taxpayer and their adjusted gross income (AGI) is not more than: $150,000 if married and filing a joint return or if filing as a qualifying widow or widower $112,500 if filing as head of household or $75,000 for eligible individuals using any other filing status

Payments will be phased out – or reduced -- above those AGI amounts. This means people will not receive a payment if their AGI is at least: $160,000 if married and filing a joint return or if filing as a qualifying widow or widower $120,000 if filing as head of household $80,000 for eligible individuals using any other filing status.

Common Questions

“Where is my Stimulus Check?”  
This is a common question when taxpayers are entitled to a stimulus check, but never receive one. Individuals will receive Notices 1444 and 1444-B in the mail stating that the payment was issued. The first step is to wait five days, and then check with your bank. The second step is to request a payment trace to track your payment. However, an individual may only trace the payment if a Notice 1444 or 1444-B was received via mail.  

“I erroneously received a check, but was not entitled to one, what do I do now?”  
If the payment was a paper check: (1) write “void” in the endorsement section on the back of the check, (2) mail the voided treasury check immediately to the appropriate IRS location, (3) do not staple, bend, or paperclip the check, and (4) include a brief explanation stating the reason for returning the check.  

If the payment was a paper check and you have cashed it, or if the payment was a direct deposit: (1) submit a personal check, money order, etc. immediately to the appropriate IRS location, (2) make the check/money order payable to “U.S. Treasury” and write 2020 EIP, and the taxpayer identification number (Social Security number, or individual taxpayer identification number) of the recipient of the check, and (3) include a brief explanation of the reason for returning the payment. 

Sources

For general Information on who is eligible, accessing your payment, determining why you have not received a payment, etc., see this link https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions

Be aware of scam relating to stimulus payments! Rely only on information from IRS.gov and do not respond to texts, emails, or voicemails regarding your stimulus payment. The IRS will NOT email, text, or call your regarding your payment. 

Due to COVID-19, there is no live telephone assistance at the IRS.  There is no indication when telephone assistance will be reinstated so the only information available is at IRS.gov.

Whether you will receive a stimulus check depends on several factors, the most important is whether you are a resident or nonresident alien for tax purposes.  Below are four potential scenarios depending on your residency status:

1.  If you are a U.S. citizen or a resident alien for tax purposes (Filed a Form 1040) who received a stimulus payment:

  • Taxpayers who are considered residents aliens for tax purposes are eligible for a stimulus payment, if they meet all the other criteria. If you are a resident alien for tax purposes and you received your stimulus payment, you do not need to do anything else.

2. If you are a U.S. citizen or a resident alien for tax purposes (Filed a Form 1040) who has not receive a stimulus payment:

  • There can be a variety of reasons why you have not received your stimulus payment yet. See this article for a few of the most common – https://www.cnn.com/2020/04/16/politics/why-didnt-i-get-my-stimulus-money/index.html
  • See this link for a list of the criteria and to determine if you are eligible - https://www.irs.gov/coronavirus/get-my-payment
  • If you filed a 2018 and/or 2019 tax return with your direct deposit information, your stimulus payment will be deposited into that bank account.
  • If you filed a 2018 and/or 2019 tax return and did NOT list direct deposit information, your stimulus payment will be mailed to the address listed on your most recently filed return.
    • The IRS is planning to release another online portal for those who want to enter their direct deposit information, but that portal is not yet available.

3. If you are a nonresident for tax purposes (filed a Form 1040NR) who received stimulus payment:

  • Nonresident aliens are NOT entitled to receive a stimulus payment. If a nonresident alien mistakenly filed as a resident in 2018 or 2019, the nonresident may mistakenly receive a stimulus payment.  Nonresident are not entitled to a stimulus payment and must return the payment to the IRS. 
  • What to do if you mistakenly received a stimulus payment:
    • DO NOT SPEND the stimulus payment. If you do not return it to the IRS, you will be charged interest and penalties on the amount.
    • Return the stimulus payment - The IRS has not issued guidance on how to return the stimulus payment. However, you can return the stimulus payment like you would an erroneous refund. See this article on how to return the payment: https://www.irs.gov/taxtopics/tc161
    • File an amended return for any year you mistakenly filed as a resident. Due to COVID-19, VITA (free tax return preparation sites) are not operating. You may need to find a professional to file your return if you are unable to file it yourself.  There is no guidance on how quickly you should file an amended return. The IRS states that a taxpayer should file a return when a taxpayer realizes the error. 

4. If you are a nonresident alien for tax purposes (filed a  Form 1040NR) and did not receive stimulus payment:

  • Nonresident are NOT entitled to a stimulus payment. If you are a nonresident and did not receive a stimulus payment, you do not have to do anything else.
  • If you are a nonresident who did receive a stimulus payment, see above for information on how to return the payment and file an amended return.

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