The case that hit the Ronald M. Mankoff Tax Clinic was a doozy. The client’s daughter had drained his entire retirement account — more than $80,000. She had power of attorney over his finances, but he had not authorized her to withdraw the money. Then came the Internal Revenue Service, which delivered him a bill for taxes and penalties on the withdrawal.
After filing a petition in Tax Court on his own, the client was referred to the Tax Clinic, where 3L Shea Heier was assigned the case.
“This all occurred while he was incarcerated, so he didn’t know about the withdrawal,” says Heier. “When he discovered what happened, not only did he not have any money in his retirement anymore, but he also had a tax bill of more than $20,000.”
The Training Ground
For over 40 years, the Tax Clinic has helped low-income taxpayers navigate tax challenges while giving students hands-on legal experience. Under the supervision of Assistant Dean for Clinical Education Caleb Smith, director of the Tax Clinic, student attorneys oversee their own cases and work directly with clients. The clinic takes on more than 100 cases annually and, in 2022 alone, reduced tax liabilities by $1 million.
“Most of my students have one or two cases that provide fairly novel, sophisticated issues, and then one or two cases that are straightforward,” Smith says. “With this case, we got the intake information, and pretty much from that point on, it was all Shea’s.”
Heier says that the role of a student attorney comes with real responsibility.
“You are the person talking directly to the clients,” she says. “You’re the one speaking to IRS counsel. If you were to be in court, you would be the one speaking to the judge.”
The Gray Area
What made this a novel case is that it falls into a legal “gray area,” says Smith. The client’s daughter had power of attorney, so she was technically authorized to make withdrawals. It wasn’t clear-cut fraud, nor was it clearly authorized. For Heier, the big question was: At what point does someone with power of attorney exceed their authority to the point of being effectively unauthorized?
That’s when Heier had to dig deep. Since there wasn’t much directly relevant case law, she went beyond tax law into contract law and statutes on power of attorney. She argued that the daughter had exceeded her fiduciary duty, meaning the withdrawals should be considered unauthorized and therefore not taxable to the client.
“The hardest legal research is the kind of research where there just isn’t necessarily a lot out there,” she says. “You can’t just research power of attorney retirement account fraud because it’s not super common.”
Heier first took the argument to the IRS appeals office, where it was kicked up to IRS chief counsel.
Smith says that speaks to the quality of the work: “Shea made a more sophisticated argument than they were used to.”
Ultimately, the IRS chief counsel agreed with Heier’s position. The outcome? Full concession. Zero dollars owed by her client.
“You spend six months on a case, and then you get the decision,” Heier says. “Being able to tell someone that you do not have to have this looming over your head anymore, it feels really good.”
Smith says clients and the IRS are often “ships crossing in the night,” with the client speaking in human terms and the IRS in tax code. It’s up to clinic attorneys to bridge that gap.
“Had the client not reached out to us through tax court, I’m not convinced he would have won on his own because you need to translate and you need to make a sophisticated argument,” he says.
The Bigger Picture
As an undergraduate economics major, Heier never expected to pursue a career in tax law. But after graduation this spring, she’s heading to EY to work in mergers-and-acquisitions tax law, a path she credits to the Tax Clinic experience.
“You can’t learn how to actually be a lawyer without doing it,” she says. “If it weren’t for the clinic experience, I would be a lot more nervous to go into practice because, as much as I love law school and the doctrinal classes, reading a case and briefing your case is not necessarily what it’s actually like to be an attorney.”
Smith says Heier’s growth was evident throughout her time in the clinic.
“She knew the client better, knew the facts better, she did the research,” he says. “It was me just double-checking rather than taking the lead.”
Through her clinical experience, Heier discovered that the work isn’t about status; it’s about service.
“Being a lawyer is not this sort of prestigious, putting you in this special glass box thing,” she says. “It’s about the information I have, distilling it, and then using it to help people.”