Just two weeks into her first clinical experience, Madison Wulf Elbich ‘24 could say that she had filed her first amicus brief—for the Sixth Circuit Court of Appeals, no less.
As a student in the Tax Litigation Clinic, Wulf Elbich worked in partnership with clinical instructor Audrey Patten to file an amicus brief in Jarrett et al. v. U.S., a case that has drawn national attention for its potential implications on the taxation of cryptocurrency earnings. The clinic, which represents low-income taxpayers in controversies with the IRS, filed the brief on behalf of the Center for Taxpayer Rights.
Wulf Elbich joined the Tax Clinic hoping to gain practical lawyering skills—a hope that was quickly fulfilled. “I was looking for a more hands-on experience where I could get a lot of feedback and learn from experienced attorneys,” she says. “I was also interested in trying litigation, and I had just previously taken Tax, so I was excited to apply some of those skills.”
When Patten offered the amicus brief as a time- and research-intensive project, Wulf Elbich immediately volunteered to get involved.
“It was a very collaborative process,” she reflects. “We worked with an attorney from the Center for Taxpayer Rights who had a lot of unique expertise. It created exciting dynamics, because we were able to incorporate so much of her information that you just can’t get from case law into the brief.”
The case itself poses a question the courts have considered before: can the United States unilaterally moot a tax refund suit by requesting the Internal Revenue Service (IRS) to issue a check in the amount of the refund sought, despite the taxpayer’s objection?
In other words, can the IRS prevent taxpayers from having their day in court?
In the underlying case, the Jarrett family obtained cryptocurrency tokens through a process known as staking and paid taxes on them. When the IRS did not respond to their refund request, they sued in federal court. The court ruled that the lawsuit was moot because the IRS had issued a check for the refund amount. However, the Jarretts argue that the IRS’s decision to issue the check was an attempt to avoid a ruling on the merits of their case.
The clinic’s amicus brief supports the Jarretts’ appeal, arguing that the IRS’s tactic of issuing checks to plaintiffs in the middle of litigation is a dangerous precedent. This tactic could be used to block lawsuits from a wide range of taxpayers, and it could make it more difficult for taxpayers to get justice in tax controversy cases.
“That’s where we came in, with the low-income taxpayer angle,” says Wulf Elbich. Specifically, the brief uses the example of the Earned Income Tax Credit, a critical credit for low-income working individuals and families, as an example of a taxpayer’s rights being linked to a correct ruling. Should the Court decide in favor of unilateral mooting, taxpayers could be in danger of losing their ongoing rights to claim the credit.
“There’s a lot that can abrogate taxpayer rights, if you allow the IRS to unilaterally moot,” she says. “The section of the brief about the Earned Income Tax Credit is really poignant to me right now. It’s so important to have that credit available. It’s an anti-poverty measure, and it keeps a lot of families afloat and in housing.”
The clinic’s brief also discusses attorneys’ fees as a potential barrier for low-income taxpayers. Right now, plaintiffs have a right to argue for attorneys’ fees in tax controversies in which they are the prevailing party.
“I think a lot about those fees in the Tax Clinic, because we are completely pro bono,” reflects Wulf Elbich. “A lot of the clients we serve have real tax issues that need to be addressed. But if we weren’t stepping in to address them, they might not be able to be addressed because of the attorneys’ fees. Not having access to a settlement that covers attorneys’ fees if your case is mooted can really prevent taxpayers from utilizing the system.”
After the clinic filed the brief, Wulf Elbich’s clinical work continued on, full steam ahead—she has worked on innocent spouse cases and Offer in Compromise cases. After having a taste of the variety within tax law work, she discovered that her work on the brief awakened a new interest in policy.
“Direct representation really informs my stance on some policy issues. That’s the been the most surprising thing that I’ve seen in myself, is the direct representation really leading to change in the policy views rather than imposing policy views on the direct representation.”
While the work with clients continues, Wulf Elbich is excited to see where the brief goes from here. And in the meantime, she unequivocally recommends the Tax Litigation Clinic:
“If you’re looking for a clinic where you know you’re going to get quite a bit of hands-on work, I absolutely recommend the Tax Litigation Clinic, even if you haven’t taken any tax courses. Audrey [Patten] is an incredible supervisor, she’s very knowledgeable about these issues. I always feel like there’s a safety net to catch me in the clinic.”
Read more about the amicus brief at Law360.