The taxpayer, a full-time college student in 2018, was shocked to receive an IRS Notice of Deficiency claiming she had failed to report $66,371 in income received via a PayPal account. The income stemmed from a Form 1099-K issued to her name, but the student quickly realized that the income wasn’t hers. As it turned out, it was tied to an eBay business belonging to someone else. That other person was using her outdated email address, name, and other detailed information.
The student didn’t know about the business and had not given consent for anyone to use her name, but was left scrambling to prove her innocence since the IRS held her liable for not only the unreported income but also substantial penalties.
She came to Fordham Law’s Federal Tax Clinic in 2023 to help resolve the matter. For over a year, Fordham Law students painstakingly built a case to show a pattern of identity misuse. Supporting documents demonstrated that the taxpayer had no connection to the eBay business’s operations.
“Working on this case was a very rewarding experience. It was immensely fulfilling to assist the young taxpayer in retaining her financial stability at a pivotal moment in her life,” said Zev Schecter ’25. “Having an opportunity to apply the knowledge I gained from my income tax class in a practical setting added an extra layer of satisfaction.”
Students in the clinic took several steps to show that the client was not involved in the eBay business, showing that much of the business activity took place while the student was at school in North Carolina, and the business transactions were taking place in New York.
After months of investigation and negotiation, the IRS agreed to reduce the taxpayer’s liability to just $555, a fraction of the initial demand. The decision reflected the strength of the evidence and the client’s clear lack of involvement in the eBay business. “This case highlights the importance of thorough documentation and strong advocacy by our students,” said Professor Elizabeth Maresca, who supervises the Clinic. “We’re thrilled with the outcome, which brings much-needed relief to someone who, like most of our clients, was unfairly targeted by this IRS audit.”
The students said they enjoyed working on the case. “The clinic offered a great opportunity to learn how tax law is applied in real cases. We had the chance to tackle complicated and nuanced tax issues, which gave an opportunity to help achieve favorable outcomes for our clients,” said Joshua Hochstat ’25.
“It was deeply gratifying to apply classroom knowledge to practical advocacy and secure a favorable outcome for our client,” said Raissa Ebeh ’25. Hailey Hourigan ’25 added, “I was able to learn hands-on about the intricacies of tax law, but I was also able to gain a better understanding of client facing practice which I will carry with me throughout my career.”