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The Doctor Is In

University law clinics offer first aid to entrepreneurs who've been hit by an audit.

Sparring with the IRS is never a cakewalk, especially if you're a small-business owner without legal representation. But if you're fortunate enough to win help from a free law clinic, dealing with the IRS can be a lot less taxing.

Such was the case for entrepreneurs Carol and Fred Toerge, who operate an industrial design firm in Sun Valley, California. Trouble began for the Toerges when the IRS audited their 1994 tax return. The agent in charge zeroed in on business deductions the couple had claimed for lumber, nails, packing crates and other materials used in their business.

The IRS agent disallowed the deductions, claiming the materials were also used for personal reasons. At the end of the audit, the Toerges received a tax bill totaling more than $4,000, not including interest and penalties.

Feeling blindsided, the couple took their case to the U.S. Tax Court. "The IRS hadn't been fair in our audit," says Carol, "and we wanted to fight it--not just roll over." They requested a court date for the case.

That's when help arrived. Along with a notice about their court date, the Toerges received information about free legal assistance offered by a law school tax clinic at Chapman University in Orange, California.

Chapman is one of several law schools nationwide that operates clinics to help business owners and individual taxpayers solve their federal and state tax problems. (For a list of law schools offering these tax clinics, see "Back To School".)


Joan Szabo is a writer in Great Falls, Virginia, who has reported on tax issues for more than 13 years.

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This article was originally published in the January 1999 print edition of Entrepreneur with the headline: The Doctor Is In.

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