D. NATIONAL POLICY REQUIREMENTS AND ADMINISTRATIVE REQUIREMENTS

i. General Compliance

By accepting funds under this grant, the grant recipient agrees to comply with all terms and conditions for the grant, which are governed by:

n 26 U.S.C. § 7526;

n The terms and conditions contained in this publication;

n Standard representations (assurances) and certifications;

n Any requirements, prohibitions, or restrictions imposed by the legislation appropriating federal funds for

this award;

n Other guidance issued by OMB after the New Grant Application or Continuation Request has been received

by the LITC Program Office; and

n Any additional specific conditions in the NOA.

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Award Administration

Grant recipients are responsible for monitoring clinic operations to ensure that all activities conducted under the award comply with applicable federal requirements and that performance expectations are being achieved. Grant recipients are also responsible for performing in accordance with the standards of operation, meeting all compliance requirements, making proper expenditures, accounting for and properly documenting the use of federal and matching funds and the source of contributions, and completing timely and accurate reporting of grant activities and finances.

Uniform Guidance Sets Forth Key Responsibilities for Federal Grant Recipients and Federal Grantors

Administrative requirements governing federal awards are set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, commonly referred to as the Uniform Guidance. The Uniform Guidance helps ensure the highest integrity in the financial management and operation of federal grant programs and strengthens accountability for federal funds by improving policies that protect against waste, fraud, and abuse. In addition, the guidance aims to minimize the time applicants and grant recipients must spend complying with administrative requirements.

The CFR contains all the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government. The Uniform Guidance is found at 2 CFR Part 200, and the Treasury Department’s implementation of the Uniform Guidance is found at 2 CFR Part 1000. The electronic CFR is updated daily and is located at www.ecfr.gov. All applicable provisions from 2 CFR Parts 200 and 1000 are incorporated into the program requirements outlined in this publication and into all LITC grant awards.

Standard Representations (Assurances) and Certifications

Applicants that create a new registration and existing clinics completing their annual registration renewals are required to review financial assistance representations and certifications before their registration on SAM.gov can be activated. This section lists some of the standard representations and certifications and some of the specific provisions as implemented by the Department of the Treasury or the IRS.

Digital Accountability and Transparency Act of 2014

The Digital Accountability and Transparency Act of 2014 (the Data Act, Pub. L. No. 113-101, 128 Stat. 1146 (May 9, 2014)) requires the U.S. Department of the Treasury to establish common standards for financial data provided by all government agencies on the USASpending website (or successor system) to increase transparency in federal expenditures and to make the information more accessible to the public. Among other objectives, the Data Act aims to simplify reporting for entities receiving federal funds and improve the quality of submitted data. LITC goals are also reported to the USASpending database that allows the public to research the use of public funding.

Non-Procurement, Debarment, and Suspension

See Section III.C.iv, Debarment and Suspension, for further information.

Drug-Free Workplace

LITCs must satisfy requirements for a drug-free workplace pursuant to 41 U.S.C. §§ 8101-06, 2 CFR Part 182, and 31 CFR Part 20, Subpart B and C.

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Trafficking Victims Protection Act of 2000

The Trafficking Victims Protection Act (TVPA) of 2000, as amended (22 U.S.C. § 7104), requires any agency that awards grants to include a condition authorizing the agency to terminate the grant if the grant recipient engages in certain activities related to trafficking in persons. As part of implementing the Act, the Office of Federal Financial Management has established terms that must be included in every grant agreement. See 2 CFR § 175.105.

The IRS may terminate the award, without penalty, if the grant recipient engages in, or uses labor recruiters, brokers, or other agents in violation of the TVPA of 2000. The applicable terms are:

You, as the grant recipient, and your employees may not:

a. Engage in severe forms of trafficking in persons during the period that the award is in effect;

b. Procure a commercial sex act during the period that the award is in effect;

c. Use forced labor in the performance of the award; or

d. Engage in acts that directly support or advance trafficking in persons, including the following acts:

i. Destroying, concealing, removing, confiscating, or otherwise denying an employee access to that

employee’s identity or immigration documents.

ii. Failing to provide return transportation or pay for return transportation costs to an employee

from a country outside the United States to the country from which the employee was recruited upon the end of employment if requested by the employee, unless:

z The employee is a victim of human trafficking seeking victim services or legal redress in the

country of employment or a witness in a human trafficking enforcement action.

iii. Soliciting a person for employment, or offering employment, by means of materially false or

fraudulent pretenses, representations, or promises regarding that employment.

iv. Charging recruited employees’ placement or recruitment fees.

The IRS may unilaterally terminate the award, without penalty, if it determines that the grant recipient has violated one of the provisions in a, b, c, or d above, or if the IRS official authorized to terminate the award determines that an employee of the grant recipient violated a prohibition in items a, b, c, or d above through conduct that is either:

n Associated with performance under the award; or

n Imputed to the grant recipient using the standards and due process for imputing the conduct of an individual

to an organization provided in 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Non-Procurement), as implemented by the Department of the Treasury at 31 CFR Part 19.

Federal Funding Accountability and Transparency Act

The Federal Funding Accountability and Transparency Act (FFATA) of 2006, as amended, is intended to empower Americans with the ability to hold the government accountable for spending decisions. Each applicant must ensure it has the processes and systems in place to comply with the FFATA reporting requirements. Unless exempted from this requirement under paragraph (d) of Appendix A to 2 CFR Part 170, any grant recipient with total funding anticipated to equal or exceed $300,000 in federal funding must report to http://www.fsrs.gov the total compensation for each of the grant recipient’s five most highly compensated executives for the preceding completed fiscal year. See Appendix A to 2 CFR Part 170.

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Award Administration

Prevention and Response to a Breach of Personally Identifiable Information

OMB requires that when a grant recipient creates, collects, uses, processes, stores, maintains, disseminates, discloses, or disposes of personally identifiable information within the scope of a federal award, the IRS shall ensure that the grant recipient has procedures in place to respond to a breach. In addition, a grant recipient must timely notify the IRS if a breach occurs; see Section VI.C.xi, Recordkeeping and File Management, Keeping Client Records in a Secure Location. Because LITCs have access to the personally identifiable information of their clients and their prospective clients, LITCs must have procedures in place to respond to a breach and must notify the LITC Program Office if a breach occurs. See OMB Memorandum M-17-12, Preparing for and Responding to a Breach of Personally Identifiable Information (Jan. 3, 2017).

Certain Criminal Law Violations

Federal law prohibits the award of grant funds to any corporation convicted of a felony criminal violation under any federal law within the preceding 24 months, where the IRS is aware of the conviction, unless a federal agency has considered suspension or debarment of the corporation and determined that denial of the grant is unnecessary to protect the interests of the government. See Pub. L. No. 117-328, Div. E, Title VII, § 745 (Dec. 29, 2022). In addition, all applicants must disclose all violations of federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the grant award. Failure to make required disclosures can result in any of the remedies described in 2 CFR § 200.339, including suspension or debarment. See 2 CFR § 200.113.

Buy American Act

Grant recipients must comply with the Buy American Act, 41 U.S.C. §§ 8301-8305, which requires that all unmanufactured articles, materials, and supplies purchased using grant funds be mined or produced in the United States and that all manufactured articles, materials, and supplies purchased using grant funds be manufactured in the United States substantially all from articles, materials, or supplies mined, produced, or manufactured in the United States. A conviction for violating the Buy American Act causes debarment from federal grants and contracts. The requirement to Buy American does not apply to information technology that is a commercial item, products for which the expected value of the procurement is $10,000 or less, products for use outside the United States, foreign products when domestic products are unavailable or are of unacceptable quality, or foreign products excepted by certain trade agreements. The IRS may waive the requirement to Buy American if its application would be inconsistent with the public interest or the cost would be unreasonable.

Other Applicable Laws and Regulations

Programs involving use of federal funds are governed by a wide variety of federal laws and regulations. These include:

n Restrictions on political activities (18 U.S.C. §§ 595, 598, 600-603);

n The national preservation program requirements (54 U.S.C. § 300101);

n Whistleblower protections (41 U.S.C. § 4712);

n Rules governing allowable costs (41 U.S.C. §§ 4304 and 4310);

n Environmental requirements of the Clean Air Act (42 U.S.C. § 7401);

n The non-pollution requirement of the Federal Water Pollution Control Provisions (33 U.S.C. § 1251); and

n Executive orders and implementing guidance including but not limited to:

n Executive Order (EO) 14332, Ending Illegal Discrimination and Restoring Merit Based Opportunity;

n EO 14159, Protecting the American People Against Invasion;

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n EO 14247, Modernizing Payments to and From America’s Bank Account; and

n EO 14249, Protecting America’s Bank Account Against Fraud, Waste, and Abuse.

Conflict of Interest Policy

Pursuant to 2 CFR § 200.112, applicants and grant recipients must have a written conflict of interest policy that contains the terms as listed in this section. LITCs must promptly disclose in writing to the LITC Program Office any potential conflict of interest situation and how the conflict was resolved.

At a minimum, an LITC grant recipient’s conflict of interest policy (“Policy”) must:

n Apply to at least the grant recipient’s employees, officers, members of its board of directors (including non director members of committees), and pro bono panel members (“Covered Individuals”);

n Apply to at least all grant recipient matters involving the use of LITC grant funds and matching funds, in

whole or in part, including, but not limited to, grants, contracts, procurements, leases, investments, other commitments of grant recipient resources, and personnel matters;

n Cover at least situations when an outside interest, activity, or relationship influences or appears to influence

the ability of a Covered Individual to exercise objectivity, or impairs or appears to impair his or her ability to perform his or her responsibilities impartially and in the best interests of the grant recipient (“Conflict”); and

n Cover at least situations when an outside interest, activity, or relationship influences or appears to influence the

Covered Individual’s impartiality or duty of loyalty to a client.

The Policy must require Covered Individuals to avoid legal, financial, personal, or other Conflicts and potential Conflicts involving the grant recipient and to promptly disclose any such Conflicts and potential Conflicts that arise. Covered Individuals must recuse themselves from a position of decision-making authority or influence on decisions or actions regarding any such Conflicts and potential Conflicts until resolved.

Covered Individuals must report on any situations they know or reasonably should know will present a Conflict or a potential Conflict. The Policy must specify to whom Conflicts must be reported and how Conflicts will be addressed and resolved. Covered Individuals may not participate in any situation involving a Conflict or potential Conflict, unless the grant recipient determines, through these procedures, that the:

n Conflict or potential Conflict is not substantial; and

n Covered Individual’s participation is in the best interest of the LITC and the LITC’s clients.

Civil Rights Protection and Other Federally Mandated Compliance

This section describes the data collection and reporting obligations required of LITC grant applicants by the IRS to meet their responsibilities under these laws. This information is required pursuant to the civil rights statutes and the regulations of the Department of Justice and the Department of the Treasury. See Executive Order 12250, Leadership and Coordination of Nondiscrimination Laws, which has been implemented at 28 CFR Part 41. (Applicants will provide this information when completing Form 13424-M, Low Income Taxpayer Clinic (LITC) Application Narrative.)

All applicants for federal funding must provide information to demonstrate compliance with the following:

n Title VI of the Civil Rights Act of 1964 (Public Law 88-352), as amended, which prohibits discrimination on

the basis of race, color, or national origin;

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n Section 504 of the Rehabilitation Act of 1973 (Public Law 93-112), as amended, which prohibits

discrimination on the basis of disability;

n Title IX of the Education Amendments of 1972 (Public Law 92-318), as amended, which prohibits

discrimination on the basis of sex in education programs or activities;

n Age Discrimination Act of 1975 (Public Law 94-135), as amended, which prohibits discrimination on the

basis of age:

n 31 CFR Parts 22, 23, and 28, are the Department of the Treasury’s regulations implementing applicable

provisions of Title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975, and Title IX of the Education Amendments of 1972, respectively; and

n Note that each Part sets forth a requirement that recipients keep records in a form and containing

information that Treasury determines may be necessary to ascertain whether the recipient is complying with the relevant provisions of each Act. The requirements are found at 31 CFR §§ 22.6(b), 23.34(a), and 28.605(b).

Protection Against Reprisal

No recipient or associate of the recipient may intimidate, threaten, coerce, or discriminate against any individual to interfere with any right or privilege protected by the laws identified in this section. No recipient or associate of the recipient may intimidate, threaten, coerce, or discriminate against any individual because the individual has made a complaint, testified, assisted, or participated in an investigation, proceeding, or hearing involving enforcement of the laws identified in this section.

Consequences for Failing to Comply With National Policy and Program Requirements

A detailed list of the actions the LITC Program Office may take for failure to comply with National Policy and program requirements specific to the LITC is addressed in Section VIII, Award Modification, Suspension, Termination, or Withdrawal.

ii. Managing Grant Funds

Accessing LITC Grant Funds in the Payment Management System

Grant funds are paid through the Payment Management System (PMS) maintained by HHS’s Payment Support Center (PSC). PMS allows a grant recipient to make an online request for payment of federal funds. After a request is processed and approved, funds are directly deposited into the grant recipient’s bank account through a process called Electronic Funds Transfer (EFT).

Accessing the Payment Management System

LITC Program Office staff can assist new grant recipients with establishing accounts in PMS. Grant recipients must obtain a username and password to use the system and complete a form to set up direct deposit of funds into the grant recipient’s bank account. Information regarding the EFT procedure is available on the PMS PSC website at https://pms.psc.gov. For details about seeking historical payment information for audits and other purposes, see Section IV.E.iii, Meeting the Matching Funds Requirement, OMB Audit Requirement.

The PSC has online FAQs and training. Grant recipients are encouraged to visit the website to view these resources. Those experiencing problems accessing funds should contact the help desk at 877-614-5533 or email to PMSSupport@psc.hhs.gov.

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Obtaining Reimbursement for Eligible Expenses

Grant recipients may request reimbursement of funds for allowable expenses they already paid or that will be paid within three business days of receipt of the funds from PMS and must make requests in accordance with their actual immediate cash needs in carrying out LITC operations. The timing and amount of EFT payments must be as close as is administratively feasible to the actual disbursements by the grant recipient for direct program or project costs and the proportionate share of any allowable indirect costs. If an expense has been paid, grant recipients are encouraged to draw down those funds as soon as possible. PMS accounts are placed in restricted status 90 days after the end of the reporting period. If grant recipients attempt to draw down funds after the 90-day period, LITC Program Office management approval is required for release of the funds from PMS. This added approval step may delay release of grant funds. Questions regarding disbursement of funds should be directed to the grant recipient’s assigned Advocacy Analyst.

BEST PRACTICE

Grant recipients should regularly draw down grant funds. If funds are drawn down less than biannually, this is often a sign that the organization is not regularly reviewing its budget vs. actual expenditures, which is a potential financial weakness. An LITC experiencing difficulties within the PMS system that it cannot resolve with PMS should contact its assigned Advocacy Analyst for assistance.

Grant Funds Must Be Held in an Insured Account

Grant recipients must maintain advances of federal grant funds in interest-bearing accounts at a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage. The balance exceeding the FDIC coverage must be collaterally secured unless:

n The grant recipient receives less than $250,000 in federal awards per year;

n The best reasonably available interest-bearing account would not be expected to earn interest in excess of $500

per year on federal cash balances;

n The depository would require an average or minimum balance so high that an interest-bearing account would

not be feasible, given the grant recipient’s expected federal and nonfederal cash resources; or

n A foreign government or banking system prohibits or precludes interest-bearing accounts.

Interest Earned on Grant Funds

Grant recipients must annually remit to the federal government any interest in excess of $500 per year earned on advances of federal grant funds and may keep up to $500 of interest earned per year for administrative expenses. Interest earned on federal advance payments deposited in interest-bearing accounts must be remitted annually via PMS. See 2 CFR § 200.305(b)(12).

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iii. Lobbying Restrictions

No federal grant funds or matching grant funds may be used, either directly or indirectly, to support the enactment, modification, or adoption of any law, regulation, or policy at any level of government. Some exceptions to this general rule may exist pursuant to an express authorization by Congress. There are two types of lobbying activities – direct lobbying and grassroots lobbying.

Direct lobbying includes contacting a member of Congress, a state or local legislator, or any of their staff members to influence the legislator to take a position or action on a specific piece of legislation or potential legislation.

Grassroots lobbying includes activities that encourage third parties, members of special interest groups, or the public to contact federal, state, or local government officials in support of, or in opposition to, a legislative policy or appropriations matter. This applies to activities both before and after introduction of the legislation.

Any entity receiving grant funds from another federal source, either directly or indirectly, may be subject to additional restrictions on lobbying.

Grant recipients are prohibited from using federal grant funds and matching funds to:

n Visit or send letters to members of Congress, state or local legislators, or any of their staff members urging

them to favor or oppose specific legislation pending under their jurisdiction;

n Develop materials designed to advocate for the enactment or repeal of any legislation or provide such materials

to anyone;

n Draft or assist in the drafting of legislation or provide comments on draft legislation;

n Pay, directly or indirectly, for any efforts intended to or designed to influence a member of Congress or a state

legislator to favor or oppose any legislation or appropriation, whether before or after introduction; or

n Engage in any legislative liaison activities, including attendance at legislative sessions or committee hearings,

gathering information regarding legislation, or analyzing the effect of legislation, when such activities are carried out in support of or in knowing preparation for an effort to engage in unallowable lobbying.

LITC employees are prohibited from engaging in any lobbying activities during the portion of time that their salaries are paid from federal grant funds or matching funds.

Grant recipients may use federal grant funds and matching funds to:

n Educate the public or constituents on legislative issues, so long as the education is not part of a broader

effort to directly or indirectly (grassroots lobbying) influence legislators on a specific piece of legislation or legislative issue;

n Respond to documented requests from members of Congress, state legislators, or other officials ( see 2 CFR

§ 200.450(C)(2)()i);

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n Interact with agency liaisons, such as the National Taxpayer Advocate or Local Taxpayer Advocates, regarding

program-related issues;

n Respond to a personal or public invitation from the IRS for comments on proposed tax regulations or

guidance that impacts low-income and ESL taxpayers;

n Partner with professional organizations to identify and propose solutions for issues impacting low-income

and ESL taxpayers (however, such efforts may not attempt to influence the introduction, enactment, or modification of any federal or state legislation);

n Contact government officials regarding broad social, economic, or other issues, so long as the contact is

not part of an effort to influence Congress or the state legislature on an actual or potential specific piece of legislation; or

n Discuss broad social, economic, or other issues on listservs or blogs, so long as the contact is not part of an

effort to influence Congress.

The LITC Program Office recognizes that the above list of prohibited and permitted activities will not answer every situation that arises. If a grant recipient has any question as to whether an anticipated activity could fall within the scope of these rules, the clinic should contact the assigned Advocacy Analyst prior to engaging in such activity.

Disclosure Requirements

Grant recipients may expend non-LITC funds ( i.e., funds that are neither federal grant funds nor matching funds) on lobbying activities. However, under the Byrd Amendment (31 U.S.C. § 1352), grant recipients may be required to disclose lobbying activities conducted if the activities relate to lobbying regarding the making or awarding of a grant and the organization receives more than $100,000 in federal grant funds.

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Figure 7, Sources of Guidance on Lobbying Activities

Award Administration

Figure 7 describes restrictions on the use of federal grant funds and matching grant funds for lobbying. In addition, IRC § 501(c)(3) organizations are subject to lobby limits (using different lobbying definitions) under the Internal Revenue Code. In general, an IRC § 501(c)(3) organization may conduct an insubstantial amount of lobbying and still maintain its tax-exempt status. See Publication 4221-PC, Compliance Guide for 501(c)(3) Public Charities, available at www.irs.gov/pub/irs-pdf/p4221pc.pdf.

For example, a grant recipient may send an email to the ABA-sponsored LITC listserv to gather support or opposition for legislation. Although such an email attempts to influence legislation, so long as neither federal grant funds nor matching funds are used, the grant recipient has not violated Title 31 or Title 18 of the U.S. Code. If the grant recipient has a requirement under Title 31 to report lobbying activities, the email activity would need to be disclosed, including any research or background work performed in connection with the email to the listserv. For purposes of IRC § 501(c)(3), sending a single email to the listserv would likely constitute an “insubstantial” amount of lobbying.

The grant recipient likely should not have substantial expenditures or have expended substantial time devoted to simple tasks such as sending a single email. Keep in mind that if a grant recipient anticipates devoting, or having volunteers devote, a large amount of time to the endeavor ( e.g., researching the issue, drafting proposed legislation, responding to comments on the listserv about the proposal), the activity could rise to the level of being more than insubstantial, in which case the grant recipient may make a lobbying election under IRC § 501(h). IRC § 501(h) measures the permitted/prohibited level of lobbying solely by expenses. If the grant recipient employee is considered a full-time LITC employee, then this activity may not be undertaken during working hours.

For more information about making a lobbying election, refer to:

n IRC §§ 501(h) and IRC 4911;

n Treas. Reg. §§ 1.501(h)-1 through 1.501(h)-3;

n Treas. Reg. §§ 56.4911-1 through 56.4911-10; and

n Publication 557, Tax-Exempt Status for Your Organization.

Clinics receiving Legal Services Corporation (LSC) funds should not confuse the above rules on lobbying with LSC restrictions. There may be lobbying activities that are acceptable under LITC guidance that are prohibited under LSC requirements and vice versa.