A pair of 3L Tax Clinic students appeared before the U.S. Tax Court in Manhattan earlier this month representing a mother the IRS accuses of defaulting on a retirement loan while on maternity leave in 2012.
Ralph Izzo ’16 and Scott Weiss ’16 argued that suspension of loan payments during a leave of absence is permitted under Treasury regulations. The IRS alleges that the married mother of four defaulted on her loan payments making the entire $40,000 loan taxable and thus owing over $20,000 in back taxes and penalties.
The Tax Clinic students argued before Judge L. Paige Marvel on February 1 that an unpaid leave of absence effectively froze her loan payment obligations until she returned to work. Izzo and Weiss, who were supervised by Clinical Professor Elizabeth Maresca, are currently preparing post-trial briefs for the case, with a resolution expected later this semester, they said.
“It was, in a sense, an all-or-nothing scenario,” Izzo said of the ongoing case. “To settle something like this for half value would still be a large amount of money.”
The case, both tax clinic students said, offered unique circumstances: the mother’s decision to take out a pre-maternity leave loan while her husband was on a military tour, a lack of existing employer documentation detailing when she started her leave of absence, and her previous similar incident a year earlier in which the IRS sent her a letter saying she didn’t owe taxes.
Researching the statute and the regulations allowed the law students to determine that the woman’s suspension of payments was permitted under the tax law; therefore, she owes no additional taxes or penalties. Advocating for this particular client required looking for legal answers where few existed, Izzo said, noting pieces of the Family Medical Leave Act offered sought-after answers.
In the process of developing the case over four-plus months, both Izzo and Weiss said they learned a great deal about the law and themselves as soon-to-be lawyers.
The case highlighted for Weiss that being a successful lawyer requires listening to a client’s story and preparing adequate representation based on that story, he said. His client’s case underscored why clinical training is imperative for every law student, he explained.
The preparation the duo received in the Tax Clinic and in Professor Maresca’s class put Weiss at ease when he appeared before the court.
“I was really confident in what we were going to say and it really took a lot of the nerves out of it,” said Weiss, who plans to practice corporate law at a firm in New York City after graduation.
Maresca, the students said, provided direction when they needed it and let them follow their instincts when they were on the right trail.
Izzo left the courtroom on February 1 feeling “exhilarated” after being a “ball of nerves” in the build-up to that date. He praised the clinic experience for teaching him how to focus on a client and think practically as a lawyer, while gaining valuable experience.
“I think everyone who plans on being an attorney when they graduate Fordham should be required to take a clinical class,” said Izzo, who hopes to work as in-house counsel for a large corporation when he graduates.