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"School-to-work" preparedness: integrating tax clinics into the business curriculum.

Editor's note: Mr. Porter chairs the AICPA Tax Division Tax Education Committee. Professor Bradwick is a committee member.

Undeniably, business students must be adequately prepared for the rigors and demands of the workplace. While internships may help to fill this need, because they are limited in their availability, they are not always the answer. Alternatively, "school-to-work" preparedness can be accomplished through the use of client clinics, in which students assist taxpayers. Volunteer tax clinics provide a springboard for integrating clinical education into the business curriculum of universities.

Volunteer tax clinics have been in existence for nearly 25 years. Many fall under the auspices of the IRS, through Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. Others are sponsored by professional organizations, such as state and local accounting or law societies.

Still others have taken on lives of their own, such as nonprofit tax help organizations incorporated in certain cities. Community Tax Aid, Inc. (CTA) in Washington, D.C., is such an example. It brings together accountants, attorneys, language interpreters, other community volunteers, and students in accounting, tax and law programs from a half dozen universities.

Yet another way to provide valuable work experience for students and free tax service to the community is to offer students class credit for their formal participation in semester-long tax clinic courses. Indiana University of Pennsylvania (IUP) offers such a program.

Volunteer tax programs--either for class credit or not--provide invaluable clinical experience in the business school curriculum for both undergraduate and graduate students. These clinical programs help to meet the needs of students, employers (especially public accounting firms) and the community.

Clinical Tax Programs Meet the Needs of Students

Clinical tax programs address the needs of students in several very important ways, including enhancing leadership skills and self-esteem; employability; exposure to real clients and a professional environment; and help in affirming choice of major and/or career.

* Enhancing leadership skills and self-esteem. Clinical tax programs allow students to develop and enhance leadership skills, self-esteem and self-confidence. While some students may anonymously "slide through" a lecture-only course, students cannot remain passive in a clinic environment. In order to survive and do well in the clinic, they must take leadership roles in the management of the program itself and in the preparation and management of client tax returns. The clinic provides a safe and nurturing environment for the learning and practicing of leadership skills. As students acquire those skills, enhanced self-esteem and self-confidence necessarily follow. This combination could help to "jump start" these students in their first jobs after graduation.

* Employability. In order to reduce employee start-up costs and employee turnover costs, employers look for employees with good technical skills, good written and oral communication skills, and realistic expectations about the profession. Clinical tax programs address each of these areas. Thus (all other things being equal), students participating in clinical tax programs should find themselves with an advantage over those students not involved in clinic programs, internships or similar work experiences.

* Exposing students to a real-client environment. Medical school is four years and medical students are exposed to patients from the second year on. Law school is three years and most law students are exposed to clients from the second year on. While business school is four years undergraduate and one to two years graduate (MBA), unfortunately, too many business students graduate with no hands-on experience dealing with real clients. This puts them at a severe disadvantage.

Clinical tax programs allow students to develop necessary communication and client skills. For instance, students must learn good listening and interviewing techniques in order to gather necessary information from clients. Additionally, the study of accounting takes on new significance as students come to grips with the impact of their errors; mistakes are no longer just points off on a test, but adversely affect real clients.

* Helping students to affirm choice of major and/or career. It is unfortunate to watch students graduate from college, medical school, law school and other programs only to find that within a few years they do not enjoy that career. Academia has a duty to provide students with opportunities to verify and affirm--and, if necessary, change--majors or careers. Students should not have to spend the time and money just to find out they might be happier--and thus more productive--in other fields. Clinical tax programs aid students in affirming their choice of business school and a career in business.

Clinical Tax Programs Meet the Needs of Employers

Clinical tax programs address the needs of employers in several very important ways, including technical knowledge; communication skills; team-building skills; computer skills; and advanced and specialized training without the necessity of an advanced degree.

* Technical knowledge. Clinical tax programs provide students with the opportunity to acquire and apply basic-level tax knowledge. This assures that students have a certain level of exposure to tax compliance. It further assures that students will have addressed and confronted their fear of tax forms. Students can be intimidated by tax forms and their overwhelming intricacies and complexities. The tax clinic experience allows students to work with the tax law and with the tax forms before the firm's billing time clock starts to run in the real world. This is a tremendous boost to an employer's profitability.

* Communication skills. Employers desire employees with strong written and oral communication skills. Many students will encounter problems in the business world, not because they lack the proper technical skills, but because their communication skills are deficient. Clinical tax programs definitely allow students to develop and enhance their verbal skills as they work with clients, colleagues and supervisors. The extent of opportunities for the development of written skills will be dependent to a certain extent on the type of client experiences in the clinic and how the clinic is run, but often some opportunities will be present.

* Team-building skills. Much of the work accomplished in business involves networking and team-building. By design, clinical tax programs involve both these skills--in putting together the clinic each year and in working with the clients each tax season. If students successfully learn and adapt to these skills in the clinic setting, employers should find that these same students adapt and fit in better--and faster--in the business setting.

* Computer skills. If the clinical tax program provides computer capabilities, students can develop and enhance their computer skills. Many clinical programs, especially in their infancy, do not have the resources necessary for computer hardware and software. However, this is a goal that clinical programs should strive for, as employers find computer know-how desirable and necessary in their new hires.

* Advanced/specialized training without an advanced degree. In the field of public accounting (and particularly in the tax area), there is a need and demand for employees to have some advanced or specialized training. However, firms are reluctant to pay for this extra education in their new hires. It is much easier to be hired into an accounting firm with an undergraduate degree than with a graduate degree, since firms frequently offer little if any pay differential for the graduate degree. Once in a firm, an employee's continued employment will be partly based on acquiring advanced and specialized training, probably through an advanced degree.

Especially for undergraduates, clinical tax programs can serve to provide some amount of advanced training. This relatively inexpensive form of specialized training produces better qualified undergraduates, who become more affordable to and more desired by accounting firms.

Clinical Tax Programs Meet the Needs of the Community

Clinical tax programs address the needs of the community in several important ways, including providing tax assistance to low-income and/or elderly taxpayers; providing cross-cultural contact and learning; and fostering a cooperative effort between volunteers from the community and students.

* Providing tax assistance to low-income and/or elderly taxpayers. Low-income and elderly taxpayers rely very heavily on free tax preparation services provided by programs such as VITA, TCE and CTA. Except for these free services, many of these taxpayers would not file their returns at all; would not properly file their returns; or would not know to (or how to) claim such credits as the earned-income credit and the elderly credit. In short, those community members with the fewest financial resources would be cheated out of valuable monies which otherwise belong to them. This puts a further burden on the community to try to compensate for the unmet needs of its lower-income members. Thus, communities find the free tax help from clinical tax programs invaluable.

Additionally, clinical tax programs can bring together clients and volunteers from different ages and generations and also from different economic stations in life. This provides a level of exposure, enrichment, learning and understanding that students might otherwise miss.

* Providing cross-cultural contact. Many clinical tax programs serve populations not born and raised in the U.S. For instance, the CTA program in Washington, D.C., serves many clients who are political refugees or emigrants from South America, Central America and Asia. While one might expect tremendous client cultural diversity in large cites such as Washington, D.C., it came as an unexpected surprise to learn that at the IUP Tax Clinic--in a small rural Western Pennsylvania town--fully one-quarter of nearly 270 clients were nonresident alien students on visas from nearly two dozen countries such as China, Pakistan, India and Brazil.

Most IUP students were born and raised in Western and Central Pennsylvania, and have had little (if any) exposure to people of other cultures. Thus, the clinical tax program at IUP fosters cross-cultural contact that otherwise would not ordinarily occur. Working with persons from differing cultures and backgrounds tends to enhance community relations and provide students with a greater understanding of the global marketplace.

* Fostering a cooperative effort between volunteers and students. Clinical tax programs can be designed to bring together people from the business community, the local community and the university community. For example, in the program at IUP, participants have included local accountants and attorneys, retired teachers and IUP students. This otherwise diverse group of people cooperated and pooled their time and talents for the good of the community. Some people formed social and business contacts in the process; at the very least, these volunteers acquired a better understanding of one another. That interaction has a positive effect on the whole community.

Types of Clinical Tax Programs in Business Schools

Clinical tax programs in business schools could be offered for class credit or for no class credit. The programs could be run as one of three types: (1) lower-cost and lower-tech, (2) mid-cost and mid-tech or (3) higher-cost and higher-tech. Basically, the decision about class credit is a decision separate from the clinic's level of funding.

Each business school needs to identify the goals and objectives of its clinical tax program. The decisions made and implemented today may be changed and replaced in the future, as the needs of the business school evolve. The schools must decide what type of program to implement.

* Class credit or no class credit. Over the past 20 years, law schools have provided hands-on client experience through extensive clinical programs developed for students. Law school clinics regularly award three to six credit hours to students. Over the past decade, there has been rapid growth in entrepreneur, incubator or small business clinics and programs in business schools. Some of these business school programs involve students, and some do not. The programs that involve students working with clients generally award three to six credit hours to the students.

As to clinical tax programs, many schools do not presently award course credit, but should be encouraged to consider doing so. Clinical tax programs in business schools are analogous to student labs in science departments or patient clinical classes in nursing departments. The clinic or the lab is where students can apply what they have been studying. A "for credit" tax clinic or science lab can be structured in such a way that the students receive a combination of regular class lectures plus the hands on clinic/lab portion of the course.

In a "for credit" clinical tax program, supervising professors should expect salary and class size to be similar to those in patient clinical classes in nursing departments. For example, one professor could be assigned 10--12 students in a three- to four-credit tax clinic course. Additionally, pay and/or release time will be necessary for ongoing administration of the clinic program.

In a "no credit" clinical tax program, supervising professors should receive pay and/or release time similar to those teaching lab courses, writing intensive courses and supervising interns. It is inappropriate to expect a professor to be the primary or sole supervisor of students in a tax clinic, unless the number of students is limited to an appropriate class size and the professor is compensated for this as for all other classes taught.

Responsibility for a student tax clinic goes beyond faculty members serving as advisers to student organizations. To properly run a clinical tax program, the professor must not only train the students, but must be supervising at the clinic at all times. To do otherwise is to invite "theoretical" (if not actual) professional malpractice. Students do not have the technical skills to be left unsupervised in a clinical tax program--be it a VITA program or any other.

Those deciding whether to award class credit will undoubtedly get into a department, school and university-wide discussion on the allocation of resources and teaching complements. Needless to say, they should not lose sight of the fact that the school's basic mission is to effectively educate its students.

* Types of programs and level of funding. Essentially, clinical tax programs can be funded as lower-, mid- or higher-cost. The level of technology and computer integration in the program is directly related to the funding level. A school can start at a lower level of funding and technology and move up over time, as the clinic proves to be successful.

1. Lower-cost and lower-tech: Most clinical tax programs start out lower-cost and lower-tech (e.g., IUP), and many run this way for years (e.g., CTA in Washington, D.C.). Basically, the program operates out of a donated site (usually on Saturdays and/or some evenings), such as a church, library or community center, and has access to very minimal resources (e.g., a single file cabinet, a photocopy machine, but no computer equipment).

2. Mid-cost and mid-tech: The mid-cost and mid-tech program is probably still operating out of donated space in the community or on campus. While space is still a problem, there is access to some computer hardware and software (borrowed, donated or--if one is very lucky--purchased). Depending on the capabilities of the computer equipment, Federal refund returns may be electronically filed; the software will double-check calculations, save time and prevent mistakes; the finished product will look more professional to the clients; and student morale will be greatly enhanced (as the program will look and feel like a "real" accounting practice).

3. Higher-cost and higher-tech: The higher-tech type of program is what everyone hopes to have. It comes with a dedicated site where all files and equipment can be stored safely and clients can meet. This might be a permanent room in the business school building (ideally) or the student union building. (For IUP, the "quantum leap" came in January 1996 with the move to the new Eberly College of Business Building.)

Once a permanent and secure site has been obtained, a small but meaningful tax library can be developed, preferably online or through CD-ROM. From there, students can be taught basic tax research skills for use in practice. Also, the clinic can be expanded to offer some services other than just during tax season, e.g., advising entrepreneur, small business and incubator programs on tax matters. Presentations may be made to the community on tax topics such as tax matters for international students; buying and/or selling a home; working as an independent contractor; or retirement. The key is that once a well-funded, safe and secure site has been established, energies can be more focused on tax matters, teaching and training.


Integration of clinical tax programs into a school's business curriculum enhances the "school-to-work" preparedness of undergraduate and graduate students. Live client tax clinics help to meet the needs of students, employers and the community at-large. There is tremendous variation in funding, as clinics may be funded at different levels and at different times, based on the specific needs of their students and the community. In any case, and at any funding level, a clinical tax program is good business for business schools. Employers and alumni alike will reap the benefits from encouraging and supporting the development and continuance of clinical tax programs in the business curriculum.
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Author:Bradwick, Faye
Publication:The Tax Adviser
Date:Aug 1, 1996
Previous Article:Tax practitioners face heightened litigation and traps for the unwary.
Next Article:Avoiding penalties by making timely estimated tax payments.

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