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LITC Secures Win for Jamaican Farmworkers

October 08, 2020

The Low Income Taxpayer Clinic (LITC) is co-counseling with attorney Ellen Kreitmeier to represent several farmworkers from Jamaica who were in the United States on H2A visas to harvest apples in 2018. The IRS rejected the farmworkers’ claims for a personal exemption based on a misapplication of a provision in the Tax Cuts and Jobs Act. This caused the farmworkers to pay taxes on every dollar earned.

H2-A workers are a part of a nonimmigrant visa program that allows United States employers to bring foreign nationals into the country to fill temporary or seasonal agricultural jobs for which U.S. workers are not available. If the workers are not in the United States for long enough, they are required to pay taxes as a “nonresident alien” under IRC § 873. This tax status is not favored for low wage workers as it limits their access to certain tax benefits.

The one remaining benefit for nonresident alien tax filers was the ability to claim a personal exemption for themselves under IRC § 873(b). As a part of the Tax Cuts and Job Act of 2017, IRC §151(d)(5)(A) was amended to provide that “the term ‘exemption amount’ means zero” for tax filing purposes; however, the Act also provides that “for the purposes of any other provision of this title, the reduction of the exemption amount to zero under subparagraph (A) shall not be taken into account in determining whether a deduction is allowed or allowable, or whether a taxpayer is entitled to a deduction.” The clinic argued that the exemption amount was not zero because IRC § 873(b) was “any other provision of this title.” In one of the several cases we filed, the IRS conceded the issue and sent our client a refund. We are still waiting on the decision for other cases.

Former law student Kevin Fann ’19 and current student Lauren Faris ’21 assisted clinic director Sarah Lora during the course of proceedings. They researched the issue and drafted the protest letter on behalf of the H2-A worker. “We were extremely excited when we learned the IRS decided the case in our favor,” Lora said. “Since this decision is now on record, hopefully it can be used to help similarly situated H2-A workers dealing with the same issue.”

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