IRS Form 13424-B Guide: Complete LITC Case Issues Report

1. Introduction: What is Form 13424-B?

IRS Form 13424-B, officially titled the Low Income Taxpayer Clinic (LITC) Case Issues Report, is an administrative grant reporting form issued by the Internal Revenue Service (IRS). The IRS is a bureau of the United States Department of the Treasury responsible for administering the federal tax code and enforcing tax laws.

Rather than being used by ordinary taxpayers to report income or deductions, Form 13424-B is used exclusively by organizations that operate a federally funded Low Income Taxpayer Clinic. The program is administered independently by the Taxpayer Advocate Service (TAS) through the national LITC Program Office.

Under Section 7526 of the Internal Revenue Code, the federal government awards matching grants to qualifying legal aid societies, law schools, and non-profit organizations. Form 13424-B serves as a semi-annual tracking report that catalogs every substantive tax controversy issue handled by clinic advocates on behalf of low-income taxpayers.

2. Purpose of the Form

Low-income taxpayers frequently face complex disputes with the IRS, including disputed tax credits, worker misclassification, audit assessments, and aggressive collection notices. Because these individuals cannot afford private representation, LITC clinics step in to provide free or low-cost legal advocacy.

Congress and the IRS require detailed, granular accountability for how federal grant funds are utilized. While other reporting forms track financial expenditures and non-case community outreach, Form 13424-B captures the specific legal and factual tax issues worked across all open controversy cases.

By compiling data across 62 standardized issue lines, Form 13424-B shows the IRS exactly where low-income taxpayers encounter friction in the tax system. This data helps the National Taxpayer Advocate identify systemic administrative problems, recommend legislative changes to Congress, and verify that clinics are fulfilling their statutory representation mandates.

3. Who Needs to File This Form

Form 13424-B is an institutional reporting document. It must be completed and submitted by any organization currently operating an active, grant-funded Low Income Taxpayer Clinic, including:

• Legal Aid Societies: 501(c)(3) civil legal service programs providing free representation to low-income filers facing IRS controversies.
• Academic Clinics: Law school, business school, and accounting clinical programs where students represent taxpayers under the supervision of licensed faculty.
• Independent Community Non-Profits: Charitable organizations authorized to deliver tax controversy advocacy under an approved LITC grant agreement.

The form is submitted by the Clinic Director, Qualified Tax Expert (QTE), or designated grant reporting administrator on behalf of the grantee organization. Individual taxpayers receiving assistance from a clinic never complete or file this form.

4. Who Is Exempt / Not Required to File

Because Form 13424-B is strictly an administrative compliance document for active LITC grant recipients, most entities and taxpayers do not need to file it:

• Individual Taxpayers: Taxpayers represented by a clinic do not complete this form; their case information is aggregated anonymously by clinic staff.
• Commercial Tax Professionals: Private attorneys, Certified Public Accountants (CPAs), and commercial enrolled agents operating for-profit practices do not use this form.
• New Grant Applicants: Organizations that are applying for an LITC grant for the first time use Form 13424 and Form 13424-M; Form 13424-B is filed only after a grant is awarded.
• Volunteer Tax Preparation Sites: Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs focus on return preparation and file separate volunteer reports.
• Unfunded Pro Bono Programs: Bar associations or charitable groups that provide volunteer tax assistance without receiving federal LITC grant funds do not submit Form 13424-B.

5. When to File

Form 13424-B operates on a semi-annual schedule aligned with the standard calendar grant year, which runs from January 1 through December 31. Grant recipients must file this form twice each year:

• Interim Report: Covers all controversy case issues worked between January 1 and June 30. This report is typically due to the LITC Program Office in late July (usually July 30 or 31).
• Year-End Report: Covers all controversy case issues worked during the full grant year from January 1 through December 31. This cumulative report is generally due in late January or early February following the close of the grant year.

Exact filing dates are published annually in IRS Publication 3319. If unexpected circumstances prevent timely filing, clinics must request an administrative extension in advance through their assigned LITC Advocacy Analyst.

6. Where and How to File

Form 13424-B cannot be filed through commercial tax preparation software. It must be submitted through official federal grant management channels.

Grant recipients typically upload completed Form 13424-B reports electronically through designated online grant portals (such as GrantSolutions or the IRS LITC Grants Portal) alongside accompanying programmatic narrative reports. In certain administrative situations, the LITC Program Office may direct clinics to email secured, password-protected PDF or spreadsheet versions directly to their assigned grant analyst.

If instructed to send hard-copy verification records or correspondence, clinics must mail materials to the specific IRS address as per instructions outlined in IRS Publication 3319. Always archive an electronic copy of the submitted report and the underlying case management data export in your clinic records.

7. Step-by-Step Instructions to Fill the Form

Form 13424-B contains 62 numbered issue lines organized into 7 distinct substantive categories. Clinic staff extract data from their case management software (such as LegalServer or Clio) to populate the counts.

Category	Line Range	Typical Controversy Issues Covered
Income Issues	Lines 1–14	Wages, Schedule C business gross receipts, pensions, Social Security, rental income, gambling winnings, and cancellation of debt.
Deduction Issues	Lines 15–27	Schedule C business expenses, charitable contributions, medical expenses, home mortgage interest, and education expenses.
Credit Issues	Lines 28–34	Earned Income Tax Credit (EITC), Child Tax Credit (CTC), Child and Dependent Care Credit, and American Opportunity education credits.
Status Issues	Lines 35–44	Filing status (e.g., Head of Household disputes), ITIN matters, injured spouse, innocent spouse, worker misclassification, and non-filer status.
Tax / Return / Statute	Lines 45–50	Audit reconsiderations, Substitute for Return (SFR) corrections, mathematical errors, and statute of limitations on assessment or collections.
Penalties & Interest	Lines 51–56	Failure to file, failure to pay, accuracy-related penalties, Trust Fund Recovery Penalties (TFRP), and interest abatement requests.
Collection Issues	Lines 57–62	Installment Agreements, Offers in Compromise (OIC), Currently Not Collectible (CNC) status, tax lien releases, and levies (including the Federal Payment Levy Program).

The Fundamental Reconciliation Rule

When completing Form 13424-B, clinic directors must follow a critical mathematical rule: The total number of issues reported on Form 13424-B must be greater than or equal to the total case count reported on Form 13424-K (Line 1C).

This rule exists because every legitimate controversy case involves at least one substantive tax issue. Many low-income controversy cases involve multiple issues simultaneously (such as a case involving unreported Schedule C income, an EITC disallowance, failure-to-pay penalties, and an Offer in Compromise). If your total issue count on Form 13424-B is lower than your open case count on Form 13424-K, reviewers will flag your submission for revision.

Counting Guidelines for Case Issues

Follow these standard principles when tallying issues across open case files:

• Count Each Issue Once Per Case: If a taxpayer’s case involves disputed W-2 wages across three different tax years, you record “Wages” (Line 1) only once for that case during that reporting period.
• Substantive Work Required: Only report an issue if clinic staff, students, or pro bono volunteers took active, substantive resolution steps on that specific issue during the reporting window.
• Active Controversy Only: Do not count issues discussed during brief informational phone calls or non-case consultations; those non-case activities are reported on Form 13424-A.

8. Required Documents/Information Needed Before Filling

Before filling out Form 13424-B, assemble the necessary case management records to ensure your numbers reconcile properly:

• Case Management Database Export: A detailed report from your legal database listing every controversy case open at any point during the reporting window.
• Form 13424-K Workpapers: The accompanying Case Information Report, specifically verifying the total active case count on Line 1C.
• Time and Casework Notes: Case activity logs confirming that substantive legal work (such as filing protests, submitting documents, or negotiating with revenue officers) took place during the period.
• Grant Identifying Details: Your organization’s official legal name, assigned LITC grant number, and the applicable grant reporting year.

9. Common Mistakes to Avoid

Errors on Form 13424-B can delay grant disbursements and trigger administrative reviews. Avoid these frequent reporting mistakes:

• Failing the Form 13424-K Tie-Out: Submitting a total issue count that is lower than the active case count on Form 13424-K is the most common reason reports are rejected.
• Including Advice-Only Consultations: Brief diagnostic phone calls and walk-in inquiries where no formal representation file was opened belong on Form 13424-A, not Form 13424-B.
• Overcounting Within a Single Case: Counting the same issue multiple times within one client file (e.g., tallying three Schedule C business expense issues for a single client) artificially inflates your metrics.
• Confusing Worker Classification and Wages: Disputing whether a worker is an employee or an independent contractor is a “Status Issue” (Line 43), whereas disputing the actual dollar amount earned is an “Income Issue” (Line 1).
• Missing Year-End Reconciliations: When preparing the Year-End report, failing to account for issues reported on the Interim report can lead to mismatched cumulative totals.

10. Penalties for Non-Filing or Errors

Because Form 13424-B is a grant performance document rather than a tax return, failing to file does not trigger tax penalties or interest charges. However, administrative consequences under federal grant rules can be severe:

• Grant Payment Freezes: The IRS may freeze grant drawdowns and withhold reimbursement payments until delinquent reports are submitted and approved.
• Administrative Probation: Inaccurate, unreconciled, or late reporting may place your clinic on a formal Corrective Action Plan.
• Termination of Multi-Year Awards: Grantees that persistently fail to report accurate casework metrics risk early termination of their multi-year grant agreements.
• Ineligibility for Future Grants: Poor compliance records remain in federal tracking databases, jeopardizing future grant applications across all federal programs.
• False Statement Penalties: Submitting intentionally fabricated casework numbers or falsified client metrics on federal grant reports violates 18 U.S.C. Section 1001, carrying criminal fines and potential imprisonment.

11. Related Forms or Schedules

Form 13424-B operates as part of the broader LITC grant compliance family. Key related forms and publications include:

• Form 13424: Low Income Taxpayer Clinic (LITC) Application Information
• Form 13424-A: Low Income Taxpayer Clinic (LITC) General Information Report
• Form 13424-C: Low Income Taxpayer Clinic (LITC) Advocacy Information Report
• Form 13424-F: Volunteer / Pro Bono Time Reporting
• Form 13424-J: Detailed Budget Worksheet
• Form 13424-K: Low Income Taxpayer Clinic (LITC) Case Information Report
• Form 13424-L: Statement of Grant Expenditures
• Form 13424-M: Low Income Taxpayer Clinic (LITC) Application Narrative
• Form 13424-N: Low Income Taxpayer Clinic (LITC) Program Narrative Report
• Form 13424-R: Low Income Taxpayer Clinic (LITC) Program Report
• Publication 3319: Low Income Taxpayer Clinic Grant Application Package and Guidelines
• Publication 4134: Low Income Taxpayer Clinic List

12. Frequently Asked Questions

Can a single case have multiple issues reported on Form 13424-B?

Yes. In fact, most tax controversy cases involve multiple issues. For example, a case may involve an Earned Income Tax Credit dispute, a failure-to-file penalty, and an installment agreement negotiation, resulting in three distinct issue entries on Form 13424-B.

What happens if our Form 13424-B total is lower than Form 13424-K Line 1C?

If your total issue count is less than your total cases worked on Form 13424-K, your report will fail automated checks. Every active case must have at least one issue, so your analyst will require you to reconcile and resubmit both forms.

Do we report issues for closed cases on this form?

Yes, as long as the case was open and substantive resolution work was performed on that issue at any point during the reporting period. Cases closed earlier in the grant year must be included in your reports.

Does Form 13424-B require individual taxpayer names or Social Security Numbers?

No. Form 13424-B collects aggregate numerical counts only. Individual client names, Social Security Numbers, and personal identifying details are never disclosed on this report, ensuring client confidentiality under federal privacy laws.

How do we report identity theft cases on Form 13424-B?

Form 13424-B provides separate lines for different types of identity theft. Line 40 captures employment-related identity theft (where someone used the taxpayer’s SSN to work), while Line 41 captures refund-related identity theft (where a fraudulent return was filed using the taxpayer’s identity).

What is the difference between Form 13424-B and Form 13424-K?

Form 13424-B categorizes the specific legal and tax issues worked across all cases (such as deductions, credits, or levies). Form 13424-K tracks client demographic data, income levels, case opening and closing stages, and financial outcomes achieved.

13. Conclusion: Key Takeaways Summarized

IRS Form 13424-B is a vital component of federal oversight for Low Income Taxpayer Clinics. Keeping your casework records organized ensures seamless reporting and compliance. Remember these core takeaways:

• Substantive Case Catalog: Form 13424-B reports the specific tax controversy issues worked across 62 numbered lines grouped into 7 categories.
• Semi-Annual Submissions: File twice per calendar grant year—once for the Interim Report (covering January through June) and once for the Year-End Report (covering the full year).
• Reconciliation is Mandatory: Ensure the total number of issues on Form 13424-B is equal to or greater than the total active case count on Form 13424-K (Line 1C).
• Active Casework Only: Count issues only for formal representation cases where substantive advocacy occurred, excluding brief advice consultations.
• Electronic Upload: Submit your report through designated federal grant portals in accordance with the specific IRS address as per instructions in Publication 3319.