Accounting Aid Society

July, 2006

Twenty five years ago, a younger Marshall Hunt volunteered “just for one Saturday” at a free tax preparation site in Detroit. That one Saturday turned into many, and five years ago he retired from a satisfying career with the IRS to become Director of the Tax Assistance Program for Accounting Aid Society. Michigan has some unusual taxes and credits, and Accounting Aid Society some uncommon programs.

Accounting Aid Society tax volunteer Elizabeth Luna helps client Angel Santiago with his taxes in February, 2006 in southwest Detroit. (Santiago is visually impaired.)

Accounting Aid Society did not start off doing taxes. Founded by accountants who wanted to give back to the community, Accounting Aid Society was the first support organization for other nonprofits in Michigan, providing them with management services. In 2006, they handed this original mission off to a younger organization, the Michigan Nonprofit Association, which specialized in nonprofit management and advocacy issues and covered the whole state. In a smooth transition, Accounting Aid Society’s Nonprofit Management Program Director moved over to the Michigan Nonprofit Association, and Accounting Aid Society refocused its resources to where they had the most community support—free tax preparation.

The free tax preparation services started in Detroit in 1976, five years before Marshall would become involved. While Wayne County (where Detroit is located) still provides the largest number of tax clients, they have extended their reach to Oakland, Macomb, and Livingston counties.

The Tax Assistance Program (TAP) prepares taxes at the federal and state level, as do most such programs, but they also prepare returns for city taxes. Yes, city taxes. About 20 cities in Michigan impose income taxes, and four of these are in TAP’s service area. Marshall was instrumental a few years ago in working with several city tax directors to have TaxWise incorporate a common city income tax form that is accepted by a number of the cities. Unfortunately, clients from one of the cities in TAP’s service area still require paper returns. This is a significant number of returns—50 percent of TAP’s almost 9,000 clients file for federal and state taxes and, in most cases, city taxes as well.

Michigan also has some interesting state tax credits based on household income. Michigan Homestead Property Tax (or Renters) and Home Heating credits are available to people with or without taxable income, so people receiving Supplemental Security Income, or other non-taxable income, can get a state tax refund to offset their expenses. Returns for these credits can be filed as attachments to income tax returns but for clients without taxable income are filed separately just like income tax returns, including electronic filing. These credits are very important to the low-income population in Michigan, and TAP finds that 50% of its clients have no taxable income and file only for the state credits.

Taxpayer clients

In 2006, the average tax return of $965 per household served by TAP (between 8–10 percent of each client’s household income) was used to purchase necessities and to pay utility bills and other living expenses. In all, more than $8.6 million in tax returns and credits went directly to low-income residents in TAP’s service area. Since 1976, TAP has returned more than $138 million to low-income individuals and families. TAP returned over $2.2 million in Earned Income Tax Credit refunds to its clients in 2006.

They do all this with a small staff and large volunteer pool. A budget of $1.4 million (about 50% of which is donated services) supports Accounting Aid Society’s five full-time and five part-time staff, most of whom are directly involved in TAP.

The rest is done by approximately 660 volunteers who come from corporations and other organizations. About two-thirds of the volunteers come through their Adopt-a-Site program. Others come from companies not involved in this collective way, or individuals not affiliated with any company.

Through the Adopt-a-Site locations, 17 corporations and other groups adopted a specific location in 2006 and enrolled their employee-volunteers to prepare tax returns for low-income families. Hundreds of volunteers came from Adopt-a-Site participants such as Masco Corporation, Ford Motor Company, PricewaterhouseCoopers LLP, Blue Cross and Blue Shield of Michigan, DTE Energy, GM Tech Center, Comerica, Michigan Association of CPAs, and the National Association of Black Accountants.

If a company provides paid community service time to employees, they can more easily staff a weekday site. Kathleen Aro, President of Accounting Aid Society, observes that it is important to get a champion at a high enough level in the company to recruit volunteers and support the program, but also to have dedicated employees at lower levels. Other benefits of this corporate support are access to computer labs and training facilities. Once you have relationship with a company, Kathy notes, funding often comes along with volunteers, and volunteers are inclined to recruit more volunteers through their business networks.

Accounting fraternities at two universities adopt sites. Once again, they provide a pool of potential volunteers, and their own computer labs for training. Other schools are a source of individual volunteers. Students volunteering at tax sites can meet their community service requirement and gain experience. Marshall is able to recruit for his program at University of Michigan at Dearborn, where he is on the adjunct faculty.

Who do these volunteers serve? Clients are low-income people, mostly urban. Over 7,000 of this year’s almost 9,000 clients were from Wayne county, and most of these from the city of Detroit. The 50% of clients getting only state credits are mostly singles, seniors, or disabled. The other 50% are mostly heads of households with children.

Accounting Aid Society tax volunteer Steve Jerkz (left) reviews taxes with client Roy Gladwey of Detroit in Febraury 2006 at the Main Detroit Public Library

TAP has expanded its presence in southwest Detroit and Pontiac to serve the Hispanic community. They keep records of the languages that volunteers speak, and can locate translators as needed. As well as Spanish-speaking volunteers, they utilize Arabic speaking volunteers at their Dearborn site (Dearborn has one of the largest Arabic-speaking populations of any U.S. city). For those whose primary language is not English, regardless of income, AAS provides free information about tax rights and responsibilities through their Low Income Tax Clinic (LITC) funded by the IRS.

Marshall says that they are serving an increasing number of seniors—36 percent this year. For seniors and disabled clients (24 percent), TAP has a Homebound Program whereby TAP mails information packages about taxes to clients, who complete it and mail it back. TAP follows up by phone as necessary. This year, they served 807 clients, mostly state credit-only, in this way. Running a year round program, Accounting Aid Society can assist more clients outside of the tax filing season.

TAP’s awareness of the needs of disabled people has been raised by one of their supervisors, who needs disabled access. It is now a consideration for all new sites that they provide disabled access.

Marshall is pleased to have increased direct deposit by 46% this year. They partner with GoDirect to encourage Social Security recipients to direct deposit their payments, and have banks at several tax sites.

While it is hard for all programs to measure their impact on clients beyond the numbers of returns completed and value of refunds, Kathy recalls one phone call from a client who said she could care for her son who had a disability, and catch up on her utility bills, because of her refund.

And Marshall, who has been with Accounting Aid Society since he started 25 years ago as a volunteer for one Saturday, says, “It is such a wonderful feeling when you can give money directly back to a client. It’s more personal than writing a check to a charity. When the client gives you a smile or even an occasional hug, it is very satisfying.”

Story by Don Wedd