How To Write-Off Pro Bono Services At Tax Season & (More Importantly) Why You Should Offer Them

Faced with a demand for budget cuts amid excessive government spending and deficit, the Republican Study Committee proposed the elimination of the Legal Services Corporation for its most recent 2013 budget plan.

On March 28, 2012, the ABA announced its opposition to the proposal.

The ABA believes the budget plan eliminating the Legal Services Corporation (LSC) ignores the overwhelming needs of struggling families for free legal advice.

In light of these needs, the Republican Study Committee proposal seems remarkably shortsighted. LSC-funded aid providers close nearly 1 million cases each year, including child custody matters, foreclosures, and veterans claims, among other worthy American causes and cases.

The ABA wrote in its statement, “Eliminating LSC will not erase the needs of working-class families, veterans or the elderly who have no choice but to go to court.“

“Slashing support for local legal aid groups will not help victims of natural disasters who need LSC funding to rebuild their lives.”

With the impending Presidential elections, federal funding has be facing even more public scrutiny. However—as the ABA points out—instead of relieving the government of costly legal burdens, the Republic Study Committee proposal will just shift them to State courts.

“Defunding LSC will place unprecedented burdens on our state courts to guide a flood of pro se litigants through complex legal channels,” writes the ABA.

“That will mean higher demand for already beleaguered court services, greater cost for local taxpayers and massive delay in courtrooms.”

Now, more than ever, the public is relying on easy and affordable access legal services. And, for law firms, tax season provides additional reasons for law firms to provide pro bono work (you know, outside the simple pursuit of justice).

The Internal Revenue Service (IRS) writes about tax deductions for pro bono legal services:

“Although you cannot deduct the value of your time or services, you can deduct the expenses you incur while donating your services to a qualified organization.”

 Lahle Wolfe, About.com Guide, answers all your questions about similar tax deductions She writes:

“Before listing the types of expenses you may be able to deduct, they need to meet two IRS qualifications:

  •  The expense be incurred as a requirement in order to perform the service for the organization; and
  • The services must primarily benefit the charity and not the taxpayer (but both can benefit.)

Examples of expenses you may be able to deduct, or partially deduct, include: cost of supplies needed to provide or perform the service that directly benefited the charity; travel expenses; and other direct expenses.”

Therefore, this April 15, by serving those in need, your firm can get the deductions it needs. With ample online guidance about tax write-offs for pro bono work, there’s no excuse for not offering these services to your community.

And, next fiscal year, aim to mirror the ABA’s mission “to serve equally our members, our profession, and the public by defending liberty and delivering justice as the … representative of the legal profession.”

The ABA counter-proposes to the Republicans, “Rather than eliminating LSC, Congress should increase its investment in access to justice by appropriating $402 million for FY 2013.”

 But, whatever your belief about the budget, it’s time—at least—to get involved with charitable billing at your firm.

The ABA is correct to assert, “We cannot afford to make our courts even less accessible to the public.”

 -WB

For a reminder about the benefits of offering pro bono services at your firm read C4CM’s article, “Occupy Wall Street Reminds Lawyers To Find A Cause, Make A Difference With Pro Bono Work.”

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