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International Handbook on Clinical Tax Education: Chapter 5 Rationale Tax and the poverty interface

International Handbook on Clinical Tax Education
Chapter 5 Rationale Tax and the poverty interface
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table of contents
  1. Title Page
  2. Copyright
  3. Contents
  4. List of figures
  5. List of tables
  6. List of appendices
  7. List of abbreviations
  8. Foreword
  9. 1. Introduction
  10. Part I. The tax clinic
    1. 2. A brief history of tax clinics around the globe
      1. 2.1 Key findings
      2. 2.2 Introduction
      3. 2.3 From humble beginnings
      4. 2.4 From east to west
      5. 2.5 From south to north
      6. 2.6 Conclusion
    2. 3. Project administration: how to set up a tax clinic
      1. 3.1 Key findings
      2. 3.2 Introduction
      3. 3.3 The foundations of a clinic
        1. Institutional and/or organisational support
        2. Costs and wider resources
        3. Supervision
        4. Insurance
        5. Data protection
      4. 3.4 Clinic design
        1. Student and supervisor recruitment
        2. Educational design
        3. Integration into community (client recruitment)
      5. 3.5 Concluding remarks
      6. 3.6 Key reading
    3. 4. Rationale: tax support for low-income individuals
      1. 4.1 Key findings
      2. 4.2 Introduction
      3. 4.3 Historical context
      4. 4.4 The tax charities – what they really do
        1. TaxAid
        2. Tax Help for Older People
        3. Tax clinics
      5. 4.5 The tax charities moving forward
      6. 4.6 Access to the tax charities
      7. 4.7 A rationale for low-income taxpayer support: common tax issues faced by those on a low income
        1. Non-tax issues
        2. Tax complexity
        3. Expansion of self-employment
        4. COVID-19
        5. Late registration and tax returns
        6. Other changes in how people are paid
        7. Incorrect PAYE codes
        8. Pension drawdown
        9. Proliferation of umbrella companies and disguised remuneration schemes
        10. Penalties
        11. Bankruptcy
        12. Digital exemption and assisted digital
        13. Working with HMRC to resolve generic tax issues
      8. 4.8 An international call to action
      9. 4.9 Concluding remarks
    4. 5. Rationale: tax and the poverty interface
      1. 5.1 Key findings
      2. 5.2 Introduction
      3. 5.3 Canvassing the tax and wider social issues addressed by the National Tax Clinic Program
        1. Tax and financial literacy
        2. The unmet need for tax advice in Australia
      4. 5.4 Introducing the UNSW Tax and Business Advisory Clinic
      5. 5.5 Benefit of tax clinics: Australia and internationally
        1. Opportunities for further research
      6. 5.6 Concluding remarks
  11. Part II. Tax clinics and our communities
    1. 6. Engagement in the community
      1. 6.1 Key findings
      2. 6.2 Introduction
      3. 6.3 The external stakeholders in CTE
        1. Supporting your local community
        2. Becoming part of the local community
      4. 6.4 Concluding remarks
    2. 7. Listening to our communities: the Community Tax Law Project as an example of a low-income taxpayer community-focused service provider
      1. 7.1 Key findings
      2. 7.2 Introduction
      3. 7.3 What does a community-focused tax clinic look like?
        1. Mission driven
        2. Community understanding and support
      4. 7.4 What populations are you going to serve?
        1. Demographic scope: how do your clients live, work, pray or play?
        2. Resources and limitations
        3. Learn from failures
      5. 7.4 What do these populations need or want?
      6. 7.5 What specifically does your clinic require to meet these needs and wants?
        1. Community partners: you cannot reach everyone by yourself
        2. Social capital: the who, what and when of building your clinic family
        3. Finances: the lights do not stay on with positive thoughts and well wishes
      7. 7.6 How do I fix the problem at the source? Yelling up the chain: advocacy as part of the clinic’s mission?
        1. Community advocacy
        2. Administrative advocacy
        3. Litigation as a venue for change
        4. Governmental advocacy
      8. 7.7 Conclusion
    3. 8. Public education: the Tax Club UNILAG
      1. 8.1 Key findings
      2. 8.2 The context of the Tax Club UNILAG
      3. 8.3 The creation of Tax Club UNILAG
      4. 8.4 An overview of the club’s activities
      5. 8.5 The importance of tax clubs
      6. 8.6 Some challenges faced by the tax club
      7. 8.7 Support for the use of tax clubs in education
      8. 8.8 Looking to the future
      9. 8.9 Concluding remarks
    4. 9. Public education: engaging with secondary education in schools
      1. 9.1 Key findings
      2. 9.2 Introduction
      3. 9.3 Tax clinics as defenders of taxpayer rights
      4. 9.4 Partnering with secondary education
        1. How the partnership was established
        2. Benefits of the community partnership
      5. 9.5 Conclusion
    5. 10. Taxpayer resolution: improving taxpayer compliance in Indonesia
      1. 10.1 Key findings
      2. 10.2 Introduction
      3. 10.3 Taxation in Indonesia in a nutshell
        1. Registration
        2. Bookkeeping
        3. Payment
        4. Reporting
        5. Audits and penalties
      4. 10.4 Revenue and taxpayer compliance
      5. 10.5 Improving individual taxpayer compliance
        1. The formation of the FoT community
        2. The development of FoT
      6. 10.6 Conclusion
    6. 11. Policy changes: impact on and through the Tax Court
      1. 11.1 Key findings
      2. 11.2 Introduction
      3. 11.3 Government approach
        1. Regulations and other rules
      4. 11.4 Role of tax clinics in shaping the law
        1. Litigation: impact of clinics on the community of low-income taxpayers
        2. Commenting on proposed legislation, regulations, forms and rules
        3. Commenting on systemic problems at the IRS
      5. 11.5 Conclusion
    7. 12. Marginalised voices: tax and the criminal justice system
      1. 12.1 Key findings
      2. 12.2 Introduction
      3. 12.3 Making Tax Digital
      4. 12.4 Digital exclusion
      5. 12.5 Tax issues – people in prison
        1. Digital exclusion – people in prison
        2. People in prison/with previous lived experience of prison as clinic clients
        3. Prison and self-employment
        4. Tax and self-employment
      6. 12.6 Student and university benefits
      7. 12.7 Conclusion
  12. Part III. Tax clinics and our students
    1. 13. Pedagogical theory and clinical tax education
      1. 13.1 Key findings
      2. 13.2 Introduction
      3. 13.3 Fostering the next generation of tax advisers: the importance of pro bono
      4. 13.4 Relevant pedagogical theories
        1. Employability from tax clinics: work-integrated learning (WIL)
        2. Growing student motivation and confidence: self-determination theory (SDT)
      5. 13.5 Concluding remarks
      6. 13.6 Key reading
    2. 14. Enhancing student experience: shadowing, role-plays and reflection
      1. 14.1 Key findings
      2. 14.2 Introduction: pedagogical rationale
      3. 14.3 Initial collaboration
      4. 14.4 Implementation
        1. Student recruitment
        2. EOI, CV and job interview
        3. Participation and presentation
      5. 14.5 From theory to practice
        1. Shadowing
        2. Team-based approach
        3. Role-plays
        4. Reflection and report writing
        5. Career readiness
        6. COVID-19 and the impact on the student experience
      6. 14.6 Conclusion
    3. 15. Introducing tax advocacy to students
      1. 15.1 Key findings
      2. 15.2 Introduction
      3. 15.3 The structure of a clinic course
        1. The seminar component
        2. The client representation component
      4. 15.4 Major design choices within the clinic model
        1. The directive–nondirective continuum
        2. Level of student responsibility for cases
        3. Use of examples and templates
        4. Case supervision
        5. Tension between client service and student educational development
      5. 15.5 Developing a reflective practice
        1. Exercising agency over one’s professional development
        2. Building the habit of reflection
      6. 15.6 Skills and direct advocacy experience
        1. Law firm management
        2. Ethics
        3. Multicultural lawyering
        4. Legal skills
          1. 1. Interviewing
          2. 2. Fact and legal investigation
          3. 3. Client advice and communication
          4. 4. Document drafting
        5. The advocacy mind-set
      7. 15.7 Working with community members
      8. 15.8 Conclusion
    4. 16. Developing employability skills through practice-based learning
      1. 16.1 Key findings
      2. 16.2 Introduction
      3. 16.3 Rationale for the TAC at UEL
        1. To raise awareness and provide free guidance in response to the COVID-19 lockdown
        2. To support employability of our accounting and finance students
      4. 16.4 Relevant literature
        1. Voluntary services: student, faculty and practitioner participation
        2. Pro bono: the participation of experienced practitioners
      5. 16.5 Clinic design
        1. Student volunteers
        2. Practice-led teaching
        3. External impact, collaborations and partnerships
        4. Student experience
        5. The challenges of tax and accounting clinics
      6. 16.6 Data and methodology
      7. 16.7 Results and discussion
        1. Tax and accountancy clinic and employability skills development
        2. The impact of COVID-19 on student TAC experience
        3. The measurement of students’ satisfaction: quality of the TAC training
      8. 16.8 Concluding remarks
    5. 17. Students’ professional identity and a fully online tax clinic
      1. 17.1 Key findings
      2. 17.2 Introduction
      3. 17.3 The Griffith Tax Clinic
        1. Face-to-face
        2. Online
      4. 17.4 Research methodology
        1. Participants
      5. 17.5 Data results
        1. Overall
        2. Nationality
        3. PWE (Professional Work Experience)
        4. Limitations of research and future research
      6. 17.6 Concluding remarks
  13. Part IV. Moving forwards
    1. 18. A research roadmap for tax clinics
      1. 18.1 Key findings
      2. 18.2 Introduction
      3. 18.3 Developing the tax clinic as a research project
      4. 18.4 Mapping the research field
      5. 18.5 Research methods
      6. 18.6 Theoretical perspectives
      7. 18.7 Concluding remarks
    2. 19. Moving forwards: tax clinics and business schools
      1. 19.1 Key findings
      2. 19.2 Introduction: the civic university
      3. 19.3 Widening participation
      4. 19.4 The challenge of professional accreditation
      5. 19.5 Practical experience
      6. 19.6 Some ideas for clinics going forwards
        1. Replacing High Volume Agents (HVAs)
        2. Child Trust Funds
        3. Cryptocurrencies
      7. 19.7 Policy clinics
        1. Desk research for the Office of Tax Simplification
        2. Educating policy makers
        3. Drawing on students’ experiences of the tax system
      8. 22.8 Concluding remarks
    3. 20. Concluding remarks
  14. Index

Chapter 5 Rationale Tax and the poverty interface

Ann Kayis-Kumar, Lily Pan, Michael Walpole, Bradley Hastings and Jack Noone*

5.1 Key findings

Taxpayers do not always understand their tax obligations and the appeal routes that are open to them. Indeed, low tax understanding (also referred to as tax literacy) is a global issue. This is particularly the case for low-income taxpayers. Clinical tax education projects can help bridge this gap for financially vulnerable clients. Research in these clinics can also help us to better understand the systemic barriers experienced by financially vulnerable taxpayers.

5.2 Introduction

Assisting financially vulnerable clients, through referrals from the social impact ecosystem and including financial counsellors, affords a unique degree of visibility on issues faced by these otherwise marginalised taxpayers. This visibility enables the identification of systemic tax issues that have both tax justice and social justice implications.

Not least of these issues is that long-term overdue tax returns can prevent taxpayers’ access to the full range of welfare benefits in Australia, leaving many marginalised taxpayers unable to afford the necessities, including food, accommodation and transport. This presents an access to tax justice issue because those with long-term overdue tax returns are more likely to come from socioeconomically disadvantaged communities. Further, many clients also need assistance with serious hardship applications, debt relief and waivers. It becomes incredibly difficult for these financially vulnerable clients (who are often struggling with many other issues) to make such applications without the knowledge and expertise of a tax professional. Indeed, many would not even know that such options are available to them.

This chapter explores the role of pro bono tax clinics in tackling critical social issues through grassroots research with a focus on poverty, inequality, wellbeing and justice. In doing so, this chapter explores through a case study approach whether tax-focussed social programmes such as free tax clinics can improve financial, social and psychological outcomes for disadvantaged groups in society, and it explores the rationale for introducing such projects in society and via the higher education experience.

5.3 Canvassing the tax and wider social issues addressed by the National Tax Clinic Program

It has been noted that ‘tax justice … is in fact a social justice issue’ and that ‘failing to understand the connection between tax work and social justice has negative consequences’.1 It has become evident from numerous studies that the existing unmet need for tax advice, alongside existing barriers to accessibility, which include financial illiteracy, reveals underlying social justice issues that extend beyond the domain of tax itself. Furthermore, unaddressed systemic tax issues contribute to existing social injustice experienced by individuals, particularly those who are financially vulnerable, as they are often consequently limited from accessing important resources such as welfare services. Accordingly, the existing need for tax advice not only elucidates but contributes to existing tax justice and thereby social justice issues in Australia. These lessons from Australia can be applied all around the world.

Tax and financial literacy

A systemic issue recurrent within the cohort of financially vulnerable individuals is insufficient tax literacy to complete tax returns accurately.2 Lower levels of financial literacy have been found in the following groups: those with lower levels of education, those not working or in unskilled work, those with lower incomes, those with lower savings levels, females, single people and at both the younger and older extremes of the age profile.3

The Australian experience is not unique; research by Deloitte has found relatively low levels of tax education in the United Kingdom and that this had an adverse impact on perceptions of fairness of the tax system.4 This effect of lower tax literacy leading to lower tax morale has some (although not definite in terms of statistical significance) support in other UK research.5 Certainly there are signs that the Australian tax system is so complex it is better negotiated with the use of a tax agent or other tax professional. In Australia, around 74 per cent of taxpayers use a tax professional to help them meet their tax obligations. The proportion of individuals not in business (and thus presumably with relatively simple tax affairs) is 68 per cent. In the case of small businesses, 95 per cent of them use a tax agent to lodge their return.6 These levels of use of professionals by small business and ordinary income taxpayers suggest that clients such as those of the Tax Clinics, who cannot afford the services of a tax agent, are operating at a considerable disadvantage to others in terms of their understanding of their tax obligations and rights, especially as regards meeting their lodgement obligations.

This problem has wide-reaching social justice implications because access to welfare benefits is contingent upon completion of tax returns. These benefits include childcare, social payments and government support services that are crucial to assisting individuals already experiencing a host of social issues.7 This situation is made even more acute in the circumstances of COVID-19, where people with outstanding tax returns were prevented from access to financial relief packages.8 It is also difficult for clients, particularly those who are financially vulnerable, to understand tax issues such as serious hardship applications, debt relief and waivers as they often require the knowledge and expertise of a tax professional.9

The unmet need for tax advice in Australia

There is a great unmet need for independent tax advice in Australia. Prior research has found that over a third of financially vulnerable people per year have a tax problem for which they are unable to access independent professional tax advice.10 This means that around 36,000–48,000 financially vulnerable people seen by financial counsellors each year are unable to access independent professional tax advice (being 30.1–40.6 per cent of the 120,000 clients with in-person appointments per year).11 Importantly, this is an underestimate of the total unmet need across Australia as the calculation is limited by the segment of the population that is aware of financial counsellors and can obtain their assistance. Not everyone who needs a financial counsellor will know that financial counsellors can help them. This means that between 745,000 and 1,004,000 financially vulnerable people are unable to access professional independent tax advice (with 9.9 per cent of adults across Australia experiencing severe or high financial stress).12 Of significant concern is that this figure is likely to grow, with ever-increasing shocks to the Australian economy (including drought, bushfires, floods and COVID-19) putting further financial pressure on those already vulnerable.

It has also been estimated that there is a significant and growing need for pro bono tax advice.13 Financial counsellors have observed that the unmet need for tax advice has been increasing over time, with relevant themes associated with declining levels of literacy in society, implications of the ‘gig economy’ and proliferation of Australian Business Numbers (ABNs), low levels of awareness of tax obligations, sheer complexity of the tax system, compliance burden associated with the Goods and Service Tax (GST) and the somewhat punitive nature of the tax and transfer system.14 However, studies have demonstrated that tax debts and tax stress, and thereby the need for tax advice, transcend socioeconomic boundaries.15

In a study completed by Kayis-Kumar et al., it was found that socioeconomic groups were not a determinant of whether individuals or small businesses needed tax advice.16 Financial stress is experienced across different levels of income, age and other factors.17 However, people from lower socioeconomic communities are less likely to be able to afford independent tax advice and support.18

Often, registered tax agents are deterred from assisting the cohort of financially vulnerable clients out of fear that the client is too far in debt to pay the agent’s fees. This may also be due to fears that the Australian Tax Office (ATO) will tighten lodgement deadlines for a practice’s clients if some clients are often tardy with their returns.19 This enhances existing difficulties faced by financially vulnerable people and small businesses to access tax services.20 Additionally, financial counsellors are not able to complete or lodge tax returns as they are not registered tax agents.21 This is problematic given that those with the fewest socioeconomic resources are the ones who would benefit most from the provision of free tax advice but face the most barriers to accessing such services.22

5.4 Introducing the UNSW Tax and Business Advisory Clinic

In 2018, Curtin University ran a pilot programme for free tax clinics. The federal government selected an additional nine universities to participate in the pilot programme, including UNSW (University of New South Wales) Sydney.23 While each clinic adopts different delivery models, they are required to provide four key services to the ‘unrepresented taxpayer’: advice, representation, education and advocacy.24 Tax clinics provide free, confidential and independent advice regarding tax matters, representing taxpayers and advocating on their behalf to the ATO.25

The UNSW Tax and Business Advisory Clinic is, therefore, one such service offering free tax advice to financially vulnerable individuals and microbusinesses. This clinic will be the subject of this chapter’s case study, as a real-life example of how university tax clinics can facilitate positive social impact, with implications that reach beyond tax justice issues.

The UNSW Tax and Business Advisory Clinic, which is operated by UNSW Business School’s School of Accounting Auditing and Taxation, provides tax and accounting advisory services (primarily completing long-term overdue individual tax returns and Business Activity Statements) and business coaching to microbusinesses in financial distress. Frontline staff are registered tax agents. It is the first tax clinic nationwide to be integrated into the financial counselling sector, establishing strong links to obtain warm referrals from the financial counselling profession.26 The clinic offers a range of appointment types depending on client circumstances and location including:

•   Telephone appointments (across New South Wales (NSW) including rural and remote communities as far as 800 kilometres north, 390 kilometres south and 685 kilometres west)

•   Outreach locations (including the Central Coast and the Illawarra)

•   On-campus (at UNSW’s ‘Nucleus: Student Hub’).27

In terms of personnel, the school employs three registered tax agents as clinic supervisors, each for only one day per week, to guide and mentor students involved in the clinic. Clinic supervisors are the only people who give tax advice to clients (as part of a tax agent service). Accordingly, the clinic relies heavily on the assistance of student volunteers from the UNSW Business School and/or UNSW Faculty of Law at both undergraduate and postgraduate level. Their role is to take instructions, attend client interviews, draft correspondence, assist with education seminars and conduct relevant research.28 The school employs an administrative assistant as clinic officer, who makes client appointments and assists with general clinic operations. They also engage pro bono tax professionals to assist clinic supervisors with client matters.29

It has become evident from this experience that there is a strong connection between mental health problems and tax problems, which stems from broader debt problems.30 The client cohort of UNSW Tax and Business Advisory Clinic present with rates of mental health issues, domestic violence and financial abuse that are up to three times higher than the general population.31 Two-thirds of clients report mental health issues and all who reported they experienced economic abuse also reported experiencing domestic and family violence.32 When clients were asked the question ‘Have you ever been affected by family or domestic violence?’ 56 per cent of respondents reported affirmingly.33 While this poses a small sample size, this figure is well above statistics reported for the general population, being one in 6 or 17 per cent of women.34 The clinic’s clients are often experiencing the financial implications of ‘mental health issues, financial abuse, natural disasters, gambling addictions, substance abuse, an inability to afford food and medical care, and the risks of financial despair leading to self-harm’.35

A common issue for this cohort is unresolved tax lodgements (the submission of tax returns to the tax authority), which 88 per cent of clients experienced.36 On average, individuals are seven years behind on their tax returns and, of those operating micro or family businesses, 72 per cent are behind on twenty business activity statements.37 Around 80 per cent of the clinic’s clients run small businesses (often as small traders) and typically have substantial tax debts (averaging approximately $80,000) that arise due to multiple years of overdue tax returns and business activity statements.38

5.5 Benefit of tax clinics: Australia and internationally

UNSW Tax and Business Advisory Clinic research

Tax clinics are well-placed to fill the gap between free tax assistance and independent professional tax advice.39 While free tax assistance, in the form of ATO’s Tax Help programme caters to a genuine community need, its assistance is limited to the preparation of simple tax returns for low-income people. Unfortunately, many small businesses and low-income individuals with ABNs engaged in the ‘gig’ economy are not eligible for this programme.40 This includes Uber drivers and food delivery couriers who are ‘falling through the cracks’ as they face higher compliance burdens.41

However, there is evidence that the benefit of tax clinic services such as UNSW Tax and Business Advisory Clinic extends far beyond the provision of tax advice itself. Clients have reported that they feel less anxious and have experienced a reduction in financial distress.42 Importantly, they also note that removing the obstacle of incomplete tax returns has allowed them to access critical welfare services: ‘Before I contacted the Tax Clinic, I felt like the world was spinning in the wrong direction and my anxiety was through the roof. After they helped me, I’m so thankful and grateful.’43

In surveys completed following the provision of services, 82 per cent of clients reported that they either agreed or strongly agreed to feeling less anxious. In the short term, pro bono tax advice can help to reduce stress and worry associated with tax arrears (for example, debt collection activities).44 Where tax arrears exist, tax advisers can assist by negotiating serviceable debt repayment schedules to ensure that the client’s overall financial wellbeing is less affected.45 This improves the client’s financial wellbeing, which is composed of three dimensions: (1) being able to meet one’s expenses; (2) being in control of one’s financial situation; and (3) being free from financial worry/stress.46

An example of one such service involves a client referred to the UNSW Tax and Business Advisory Clinic by a financial counsellor:

The client had been diagnosed with schizophrenia and had a long-term drug addiction. He had multiple casual jobs over several years but would often get fired as a result of his drug addiction. Recently his partner abruptly left him with their young son, which prompted him to change his lifestyle, getting Council-funded housing and trying to get work to support himself and his young son. He came into the clinic with over 10 years of outstanding tax returns and [sic] as he had only worked casually over that period. He left the tax clinic with around $6,500 in refunds of tax overpaid. He put it all directly to buying whitegoods, bedding, and other necessities – and treated his son with a trip to the aquarium for the first time.

It has become evident that while tax issues are what brings clients through the door, the clinic model feeds back into the social services sector to support other unmet needs, such as struggles to afford basic resources, including food and transport.47 Clients are also often experiencing other circumstances beyond their control, such as health problems, mental or physical, relationship breakdowns or external shocks such as the pandemic.48 In particular, the clinic’s clients are composed of a high proportion of women experiencing domestic violence and has an overrepresentation of Indigenous clients and culturally and linguistically diverse clients.49

Clinics also seek to empower clients with the knowledge and confidence to address their future tax needs.50 This also includes providing free community education to increase the tax literacy of Australians and grassroots research to advocate for tax reforms grounded in tax justice.51

Opportunities for further research

As discussed in depth in Chapter 18, tax clinics are well positioned to undertake further research to understand barriers that continue to inhibit individuals from accessing these services, as well as reasons that have enabled those seeking services to bypass existing barriers.52 Clinics can also contribute to studies that solidify the relationship between those who are financially vulnerable and can benefit from the provision of pro bono tax advice, and the experience of deeper social issues such as mental health issues or domestic and family violence. This also applies to understanding the wider implications and benefits for society that tax clinics such as UNSW Tax and Business Advisory Clinic can provide.53

Research from the clinic can also highlight ‘malfunctions’ or ‘hotspots’ within the existing tax administration that may alert the ATO to areas to be addressed or possibly improved. This is because such information will be coming directly from the ‘coalface’ of tax practice, providing the most current insight into issues experienced by financially vulnerable individuals. In other jurisdictions, such as the United States and the United Kingdom, tax clinics have worked in collaboration with government tax bodies to improve the tax administration system for financially vulnerable people. For example, the Low-Income Taxpayer Clinics (LITCs) in the US have demonstrated their firsthand insight into the effect of Inland Revenue Services (IRS) policies and procedures by utilising their ‘Systemic Advocacy Management System’ to report potential systemic issues.54 Following this, analysts conduct research to determine the extent of the issue and work with various IRS business units to propose and implement solutions. This also occurs through litigating cases in the tax court and other federal courts. The success of the tax clinic system in the US is evident, with the first tax clinic being created in 1974.55 Since then tax clinics have experienced ‘explosive growth and maturity’,56 with around ten times the number of initial clinics operating now.57

Likewise, the Low Incomes Tax Reform Group in the UK engages in campaigning work such as ‘putting forward the perspective of those who cannot afford to pay for advice’ to tax and benefit consultative groups.58

In other tax clinics within the Australian jurisdiction itself, research has revealed certain systemic issues. For example, academics at the Australian National University (ANU) Tax Clinic observed that systemic issues included a lack of computer literacy and internet access, problems with MyGov (an Australian government internet site that provides a central and ostensibly simple and secure access to government services online), limited tax knowledge and a desire for reassurance as to the accuracy of tax returns.59 Knowledge gaps included limited understanding of what constituted a financial year and whether they were entitled to superannuation. Similar research can be conducted by the UNSW Tax and Business Advisory Clinic which contributes to improving or curing existing malfunctions within the tax administration.

5.6 Concluding remarks

The provision of pro bono tax advice services by tax clinics presents a unique opportunity to observe and thereby identify the wide range of social issues experienced by financially vulnerable clients. While often emerging as tax-related issues in nature, their manifestation often has greater tax justice and social justice implications. This explicates the deeper intersections between the need for financial counselling or access to tax services and those experiencing certain circumstances such as mental health issues or domestic and family violence.

Clinics, both domestically and internationally, such as UNSW Tax and Business Advisory Clinic are well-positioned to conduct further research in this area. Ultimately, this may assist in the improvement of tax administration within each jurisdiction, with the primary body being the ATO in Australia.

  1. *   School of Accounting, Auditing and Taxation, University of New South Wales.

  2. 1   Ann Kayis-Kumar, Gordon Mackenzie and Michael Walpole, ‘Interprofessional Collaborative Practice in Pro Bono Tax Clinics: A Case Study Approach’, Journal of Australian Taxation 22, no. 2 (2020): 50; Ann Kayis-Kumar and Jack Noone, ‘Measuring the Social Impact of University-Based Pro Bono Tax Clinics: Co-Creating a Framework for Evidence-Based Evaluation’, (Tax and Transfer Policy Institute, 3 October 2019), <www.austaxpolicy.com/measuring-the-social-impact-of-university-based-pro-bono-tax-clinics-co-creating-a-framework-for-evidence-based-evaluation/> (‘Measuring the Social Impact of University-Based Pro Bono Tax Clinics’) accessed 29 July 2022.

  3. 2   See generally Toni Chardon, Brett Freudenberg and Mark Brimble, ‘Tax Literacy in Australia: Not Knowing Your Deduction from Your Offset’, Australian Tax Forum 31 (2016): 321; Brett Freudenberg et al., ‘Tax Literacy of Australian Small Business’, Journal of Australian Taxation 18, no. 2 (2017): 21; Toni Chardon, Mark Brimble and Brett Freudenberg, ‘Tax and Superannuation Literacy: Australian and New Zealand Perspectives’, New Zealand Journal of Tax Law and Policy 22, no. 4 (2016): 327.

  4. 3   Chardon, Freudenberg and Brimble, ‘Tax and Superannuation Literacy’, 327.

  5. 4   David Whittaker, ‘The Tax Education Gap Tax Knowledge and Attitudes to Tax in the UK’ (Deloitte LLP, 2019), <www2.deloitte.com/content/dam/Deloitte/uk/Documents/tax/deloitte-uk-tax-education-gap-explanatory-note.pdf> accessed 12 July 2022.

  6. 5   See Phyllis Alexander and Merima Balavac, ‘Improving Tax Literacy and Tax Morale of Young Adults’ (Report, 2018), <https://eprints.bournemouth.ac.uk/35081/1/Improving%20Tax%20Literacy%20and%20Tax%20Morale%20of%20Young%20People%20%28Final%20Report%20for%20the%20CIOT%29.pdf> accessed 26 September 2023.

  7. 6   Submission 15 ‘Australian Taxation Office Submission Inquiry into Taxpayer Engagement with the Tax System’, February 2017, at page 3, <www.aph.gov.au/DocumentStore.ashx?id=68170f97-c786-4a65-ab79-d32cf1d5d3ed&subId=463931> accessed 12 July 2022.

  8. 7   Kevin O’Rourke, Ann Kayis-Kumar and Michael Walpole, ‘Serious Hardship Relief: In Need of a Serious Rethink?’ Sydney Law Review 43, no. 1 (2021): 1.

  9. 8   Ibid.

  10. 9   Kayis-Kumar, Mackenzie and Walpole, ‘Interprofessional Collaborative Practice in Pro Bono Tax Clinics’.

  11. 10   Ann Kayis-Kumar et al., ‘Accounting for Financial Wellbeing: Quantifying the Unmet Need for Pro Bono Tax Advice’, Australian Tax Review 51, no. 3 (2022): 228–57.

  12. 11   Financial Counselling Australia, ‘A Survey: The Unmet Need for Financial Counselling’ (Financial Counselling Australia, December 2018), <www.financialcounsellingaustralia.org.au/docs/a-survey-the-unmet-need-for-financial-counselling> accessed 29 July 2022.

  13. 12   UNSW Centre for Social Impact, Financial Resilience in Australia 2018 (Report, 2018), 41, <https://assets.csi.edu.au/assets/research/Financial-Resilience-in-Australia-2018-Report.pdf> accessed 26 September 2023.

  14. 13   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing: Quantifying the Unmet Need for Pro Bono Tax Advice’, 5.

  15. 14   Ibid.

  16. 15   Ibid. 4.

  17. 16   Ibid. 4–5.

  18. 17   Ibid. 11.

  19. 18   Ibid. 4–5.

  20. 19   ‘How a Free Tax Clinic Is Rescuing the Overwhelmed’, (The Power to Persuade, 8 October 2019) <www.powertopersuade.org.au/blog/how-a-free-tax-clinic-is-rescuing-the-overwhelmed/8/10/2019> accessed 29 July 2022.

  21. 20   O’Rourke, Kayis-Kumar and Walpole, ‘Serious Hardship Relief: In Need of a Serious Rethink?’

  22. 21   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing: Quantifying the Unmet Need for Pro Bono Tax Advice’, 5.

  23. 22   Ibid. 5.

  24. 23   See Chapter 2 for a more detailed history.

  25. 24   Belinda Parkes, ‘Free Tax Clinics Offer Support to Financially Vulnerable’, (In the Black, 1 September 2021) <www.intheblack.com/articles/2021/09/01/free-tax-clinics-offer-support-financially-vulnerable> accessed 29 July 2022.

  26. 25   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing: Quantifying the Unmet Need for Pro Bono Tax Advice’, 7.

  27. 26   Kayis-Kumar, Mackenzie and Walpole, ‘Interprofessional Collaborative Practice in Pro Bono Tax Clinics: A Case Study Approach’, 52.

  28. 27   Ibid. 60.

  29. 28   Ibid.

  30. 29   Ibid. 60–61.

  31. 30   Ann Kayis-Kumar, ‘Tax Justice as Social Justice: Are Financially Vulnerable People and Small Businesses Falling through the Cracks?’ (Accountants Daily, 26 June 2020) <www.accountantsdaily.com.au/columns/14542-tax-justice-as-social-justice-are-financially-vulnerable-people-and-small-businesses-falling-through-the-cracks> accessed 29 July 2022.

  32. 31   UNSW Tax Clinic Annual Report 2020, 2021, 2022 <https://www.unsw.edu.au/business/our-schools/accounting-auditing-taxation/about-us/unsw-clinic/publications-resources>.

  33. 32   Australian Institute of Health and Welfare, ‘Family, Domestic and Sexual Violence in Australia’ (2018) <www.aihw.gov.au/reports/domestic-violence/family-domestic-sexual-violence-in-australia-2018/summary> accessed 29 July 2022, 3.

  34. 33   Ann Kayis-Kumar et al., ‘Let’s Talk about Tax: Identifying and Supporting Women Experiencing Economic Abuse’, Durham University, presented at 112th Annual Conference of the Society of Legal Scholars Conference, Durham University, 31 August 2021.

  35. 34   Ibid.

  36. 35   Kayis-Kumar, ‘Tax Justice as Social Justice’.

  37. 36   UNSW Tax Clinic Annual Report 2020.

  38. 37   Ibid.

  39. 38   Kayis-Kumar, Mackenzie and Walpole. ‘Interprofessional Collaborative Practice in Pro Bono Tax Clinics: A Case Study Approach’, 61; Annual Report 2022 <https://www.unsw.edu.au/business/our-schools/accounting-auditing-taxation/about-us/unsw-clinic/publications-resources>.

  40. 39   Ibid. 52.

  41. 40   Ibid.

  42. 41   ‘How a Free Tax Clinic Is Rescuing the Overwhelmed’.

  43. 42   UNSW Tax Clinic Annual Report 2020, 2021, 2022.

  44. 43   Ibid.

  45. 44   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing’, 8.

  46. 45   Ibid.

  47. 46   Ibid. 26.

  48. 47   Parkes, ‘Free Tax Clinics Offer Support to Financially Vulnerable’.

  49. 48   Ibid.

  50. 49   Ibid.

  51. 50   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing’, 8.

  52. 51   Kayis-Kumar and Noone, ‘Measuring the Social Impact of University-Based Pro Bono Tax Clinics’.

  53. 52   Kayis-Kumar et al., ‘Accounting for Financial Wellbeing’, 26.

  54. 53   Ibid. 28.

  55. 54   Low Income Taxpayer Clinics, 2022 Program Report (Report, 2022), <https://www.irs.gov/pub/irs-pdf/p5066.pdf>, 32, accessed 26 September 2023.

  56. 55   Keith Fogg, ‘Taxation with Representation: The Creation and Development of Low-Income Taxpayer Clinics’, Tax Lawyer 67, no. 1 (2013): 1.

  57. 56   Ibid.

  58. 57   Ibid.

  59. 58   ‘About Us’, Low Incomes Tax Reform Group, <www.litrg.org.uk/about-us> accessed 29 July 2022.

  60. 59   Ben Raines and Sonali Walpola, ‘2019 National Tax Clinic Project: The ANU Tax Clinic’ Journal of Australian Taxation 22, no. 2 (2020): 193, 202–4.

Annotate

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