College-based program spreads from New Mexico

July, 2008

TAX HELP New Mexico’s program began more than 30 years ago at Central New Mexico Community College (CNM) as a practical means of giving accounting students work experience in tax preparation while serving a community need. The free tax return preparation service prepares and files tax returns electronically for those whose annual household income is less than $40,000 or who are age 65 or older. According to recent numbers, 73 percent of New Mexicans are eligible for the program, but only 6.5 percent were served by TAX HELP New Mexico.

The Albuquerque-based program began with a few business students at CNM doing tax returns by hand. In 2003, the program expanded statewide and now operates 48 sites. CNM works with other educational partners throughout the state and with several nonprofit agencies too. In addition, The Piton Foundation is adopting CNM’s model in Denver.

Aerial view of Albuquerque, NM

Computer-based training
Using the computer-based training modules, TAX HELP New Mexico brings its partners to CNM and trains them as trainers, so they can return to their home communities and train their own volunteer staff. The online training includes modules that cover applicable tax law and software instruction, practice tax returns problems, state tax training and review tests. In the past they have also included their own IRS approved certification exam, as well as, the certification test provided by the IRS. As well as attending instructor-led trainings, volunteers can learn in their own time once they have registered and received a login for the online classroom instruction.

Student volunteers
The program relies heavily upon college students to volunteer at the tax sites. Diana Matier, Director of TAX HELP New Mexico, says that most students take well to volunteering. CNM students take a two credit tax theory in which they also become familiar with the tax software. When they volunteer for 30 hours at a tax site in the spring, they receive another credit hour. Partner colleges follow a similar format.

Colleges and high schools participate for several reasons. They have a mission to help their local communities, it provides real-life work experience for their students, the educational institutions receive funding from the state for each student who enrolls, and the tax training curriculum is free and already developed for the high schools and colleges.

Students like it because it is a short class - they earn two credits in one week of classroom instruction. The tax preparation is real work, and students discover whether they like preparing taxes or not. It meets the requirement of some colleges for students to participate in service learning, and it is a great resume builder. As icing on the cake, in 2008 they will receive a $100 scholarship (provided by the state legislature of New Mexico) after completing 30 hours of volunteer service.

Even high schools have become partners. High school juniors and seniors take the same CNM course as everyone else, get concurrent enrollment (no registration fee) and dual credit ( 1 high school credit and 2 college credits), and then provide tax preparation service at their schools after hours and on weekends. Ms. Matier believes that the tax preparation program encourages high school students to stay in school and provides them with practical work experience. Some students have returned for a second year, obtaining an extra college credit.

Needs in New Mexico
New Mexico has a large Hispanic population, many of whom are bilingual. It is believed that 70 percent of families in the state have income less than $40,000. As 18% of the population is Native American, services are offered in the Navajo language in Gallup. One of the issues facing a largely rural state with 19 pueblos and two reservations is the distance many clients may have to drive to get to a site.

At a free tax preparation site, some taxpayers learn they are being paid as independent contractors. When they understand this, they learn to make quarterly estimated payments and avoid penalties for underpayment of taxes. Taxpayers also learn that they are eligible for earned income credit and sometimes learn what, if any, expenses they can track to offset future earnings. When they come to a tax site located at a college, they also learn that higher education is accessible to them. Other benefits are that banks may come and open accounts for people who have never had bank accounts. This gives clients the option of choosing direct deposit for their tax refunds and quicker access to their funds.

Almost 29,000 taxpayers used the free tax preparation services offered by TAX HELP New Mexico across the state in 2008, receiving over $21 million in refunds and saving over $3 million in tax preparation fees.

Public and private support
While most of the program’s funding comes from the state, TAX HELP New Mexico also received private funding from the Albuquerque Community Foundation, Annie E. Casey Foundation, Bank of Albuquerque, CNM Foundation, McCune Foundation and in kind support from Univision.

Plans for 2009
Next year, Matier will partner with a credit union to offer an interest-free Refund Anticipation Loan (RAL). She also hopes to do more with financial literacy education through the New Mexico Project for Financial Literacy, with co-partners New Mexico Assets Consortium and Community Action New Mexico. Benefits screening will also be offered at some sites.

Satisfaction
Ms. Matier is one of four tax preparation staff at CNM, housed in the Planning, Budget and Institutional Research and partners with the Business and Information Technology Department of the 26,000 student college. She finds helping the community personally satisfying. As well as the economic benefits that flow to families, the free tax preparation program encourages students to stay in school, and provides them a channel to give back to their community. Ms. Matier continues to provide outreach efforts with UNIVISION, the local Spanish language television station to reach the Spanish-speaking community so that they will know TAX HELP New Mexico is here to help.