EITC Under Attack - Take Action Now!

There are no cuts to the EITC in the U.S. Senate Budget Resolution, but up to $18.7 billion in EITC cuts in the U.S. House Budget Resolution. The two versions of these budgets will be conferenced this month - April! We urge you to call your Representative and Senators NOW and tell them: "Tell the Budget Conferees to support the Senate Budget with respect to the EITC! No Cuts to the EITC!" You can reach them through the capitol switchboard at (202) 224-3121.
Click here for an advocacy alert, here for basic background information including some sample emails, and here for detailed background including how much EITC could cost workers in your state

Next Steps in the Budget Process

If Congress passes a budget in April as expected, instructions will go to committees to make cuts in programs under their jurisdiction - particularly if the House Budget Resolution prevails over the Senate Budget Resolution (see above). Then, the Senate Finance Committee and House Ways and Means Committee would weigh cuts to the EITC vs. other entitlement programs such as Medicaid and TANF. To prevent cuts to the EITC, we would have to urge cuts to other vital programs. So, we encourage you to press your elected officials NOW (see "EITC Under Attack - Take Action Now!" above) to convince them to avoid entitlement cuts altogether. (For information on a variety of entitlement programs under threat and the impact on your state, click here.)

Other Coalition Advocacy Activities

The Coalition continues to work in other key advocacy areas, including promoting federal funding for free tax preparation programs, protecting the rights of immigrant taxpayers, and advocating for improved IRS services to taxpayers. Look for details on these initiatives in upcoming newsletters!

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Doing the Work of the Coalition

Alerted by policy advisers that the EITC could be under threat in the federal budget, the Grassroots Advocacy Working Group of the Coalition confirmed a pro-active advocacy campaign by Coalition staff. “Don’t Cut the EITC!” was the message directed to Congress as early as February. In early March, the Senate Finance Committee’s budget resolution indeed called for large cuts in the EITC, and Coalition lobbying efforts moved into full gear. With an unexpected victory in the Senate, lobbying efforts are now directed to staving off the huge cuts in the House version.

The National Community Tax Coalition and its affiliates are committed to providing high quality tax preparation and related services. The Quality and National Standards Working Group define quality as:

1. Accurate completion of tax forms, in compliance with tax law;
2. Ensuring that low and moderate-income taxpayers receive all tax credits for which they are eligible;
3. A high level of customer service that empowers taxpayers to improve their financial situation.
4. Well trained and supported volunteers who are inspired by their volunteer experience.  

This Working Group produced three products useful for the field in response to the IRS’s Quality Initiative:

• “All Those Kids” which summarized the criteria used in determining the eligibility of families for tax credits
• an Intake and Exit checklist
• a Quality Review checklist which lists the questions reviewers and volunteer tax preparers can use to ensure the return is accurate.

All of these resources can be found in the new Quality section of the Coalition website.

The future focus of the Quality Working Group include walk-in versus appointment based tax preparation models, filing status, and preparing for the Coalition’s national conference in September.

If you are interested in contributing to the work of any Working Groups (ITIN, Asset Building, Policy Analysis, Grassroots Advocacy, Quality, Technical Assistance, H&R Block), contact Member Services Manager Don Wedd .

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2005 Program Self-Assessment Survey

While many groups won’t have final data on this year’s tax programs until May or later, the Coalition has released its annual survey this week because it is accompanied by a data collection tool that extracts reports from TaxWise. This tool may be just what groups have been looking for since the season began!

The information we collect from hundreds of our affiliates enables the Coalition to better serve its affiliates by gaining a clear understanding of the size and impact of the free tax preparation field. This is critical for designing our capacity building services and advocacy approaches. Last year, over 150 organizations participated in the survey.

If you have not received an email copy of the survey announcement already, contact Don Wedd.

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Coalition Affiliates Receive Grants for LITC Work

More than 50 affiliates of the National Community Tax Coalition recently received grants from the IRS for their Low Income Taxpayer Clinics (LITCs).

LITCs are qualifying organizations that represent low income taxpayers involved in tax disputes with the IRS or that provide education on tax rights and responsibilities to taxpayers for whom English is a second language or who have limited English proficiency

In announcing the grants in early March, Nina Olson, the National Taxpayer Advocate, stated that “these clinics provide an important resource to taxpayers who may not be able to afford a tax professional.”

Table of LITCs receiving grants

Organization	City	State
Birmingham Business Resource Center, Inc.	Birmingham	AL
DNA – People’s Legal Services, Inc.	Chinle	AZ
The LITC of Central California Legal Services, Inc.	Fresno	CA
CHARO Community Development Corp.	Los Angeles	CA
Filipino-American Service Group, LITC	Los Angeles	CA
HIV & AIDS Legal Services Alliance, Inc. (HALSA)	Los Angeles	CA
Korean Resource Center	Los Angeles	CA
LITC of the Legal Aid Society of Orange County	Santa Ana	CA
Legal Aid Society of San Diego, Inc. - HomeStart, Inc.	San Diego	CA
New Life Corporation	New Haven	CT
University of Connecticut-School of Law	Hartford	CT
Central American Resource Center	Washington	DC
Coalition of Florida Farmworkers Organization	Homestead	FL
Community Legal Services of Mid-Florida (CLSMF) Low Income Taxpayer Clinic	Daytona Beach	FL
Legal Services of Greater Miami, Inc.	Miami	FL
Legal Aid Society of Hawaii	Honolulu	HI
University of Idaho Tax Clinic	Moscow	ID
Midwest Tax Clinic - Center for Economic Progress	Chicago	IL
Korean American Resource and Cultural Center	Chicago	IL
El Centro, Inc.	Kansas City	KS
Greater Boston Legal Services	Boston	MA
Springfield Partners for Community Action, Inc.	Springfield	MA
Maryland Volunteer Lawyers Service	Baltimore	MA
Pine Tree Legal Assistance, Inc.	Bangor	ME
Volunteer Accounting Service Team of Michigan	Detroit	MI
Budget & Financial Management Assistance (BFMA) Tax Clinic	Kansas City	MO
Southwest Missouri State University LITC	Springfield	MO
Northeastern Community Development Corporation	Camden	NC
Legal Advice & Referral Center	Concord	NH
NH Pro Bono Referral Program	Concord	NH
Rutgers Law School Federal Tax Clinic	Newark	NJ
Legal Services for New York City-Bronx LITC (LSNY Bronx )	Bronx	NY
Project Challenge of Long Island NY, Inc.	Long Beach	NY
Queens Legal Services Corp.	Jamaica	NY
Rural Opportunities, Inc. (LITC)	Rochester	NY
South Brooklyn Legal Services Inc - Brooklyn Low Income Taxpayer Clinic	Brooklyn	NY
Young Korean American Service and Education Center	Flushing	NY
Community Legal Aid Services LITC	Akron	OH
Friendship Foundation of American-Vietnamese, Inc.	Cleveland	OH
Lake Erie College – LITC	Painesville	OH
Legal Aid Society of Cleveland	Cleveland	OH
Legal Aid Society of Columbus	Columbus	OH
Community Action Project of Tulsa County, Inc.	Tulsa	OK
Villanova Law School Federal Tax Clinic	Villanova	PA
Rhode Island Tax Clinic, Inc.	Providence	RI
Conexian Americas	Nashville	TN
Legal Aid Society of Middle Tennessee and the Cumberlands	Oak Ridge	TN
Centro Familiar Christiano, Inc. LITC	Sugarland	TX
Legal Aid of Northwest Texas	Ft. Worth	TX
Texas Taxpayer Assistance Project at Texas Rio Grande Legal Aid	Austin	TX
Community Tax Law Project	Richmond	VA
Vermont Low Income Taxpayer Project (Vermont Legal Aid, Inc.)	Burlington	VT
University of Washington School of Law	Seattle	WA
Legal Aid Society of Milwaukee Inc	Milwaukee	WI

Job Openings

The National League of Cities are in search of a new Senior Program Associate. The position is listed on NLC's website at:  http://www.nlc.org/inside_nlc/job_opportunities_at_nlc/839.cfm. 

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Tear down tax credit roadblocks, experts say

David Marzahl of the Center for Economic Progress addressed the President Bush’s Tax Reform panel during their hearing in New Orleans, calling for the earned income tax credit to be made easier for the average person to understand. Reported in The Times-Picayune.

Fast IRS Refunds Could Cost You

NBC TV in Philadelphia ran a story on Refund Anticipation Loans highlighting the alternative — The Campaign for Working Families VITA e-filing.

Service helps low-income tax filers

For the first time, Duluth Community Action is running a free tax preparation site. Story in the Duluth News Tribune.

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RealSense Prosperity Campaign, an umbrella group of 65 free tax preparation sites serving northeast Florida , had increased its total returns by 25% over last year by early March.

Community outreach is a key component of RealSense, which focuses its efforts on making itself visible to people who are being helped as well as the people that are capable of helping others escape their poor financial situations. Read the full story.

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EITC Asset Building Strategy Improvement

In just two years the EITC Task Force of Southern Arizona had increased the productivity of its local VITA sites from 300 returns to over 2000. With this success under their belts, they began to consider broader goals.

In November of 2003, the United Way of Tucson and Southern Arizona convened a task force of social services, businesses and government entities to work toward the common goal of increasing the number of qualified families who claim the Earned Income Tax Credit. Since then, the Task Force has expanded its partnerships, and shifted its focus to include financial education and the connection between the Earned Income Tax Credit, and family self-sufficiency.

The Annie E. Casey Foundation is supporting the outreach work of the EITC Task Force, particularly that to the Spanish-speaking population. With the shared vision of helping families take advantage of available programs in order to lift themselves out of poverty, AECF supports research done in the area of financial literacy at the VITA sites.

As part of their investigation into how financial education can play an important role at the VITA sites, Margret Aros and Erin Markley of the EITC Task Force of Southern Arizona were hosted by Mark Alvarado and Lyset Cadena of the Southwest EITC Collaboration in El Paso , TX during March, 2005

During the visit, the observers compared the practices of the sites in El Paso , with a focus on financial education practices. The visit allowed for a variety of significant comparisons that can be used as a base for further comparisons with other sites. Some of these observations and recommendations are:

1. Several organizations with a mission of economic self-sufficiency provide free tax preparation as a “carrot” to attract clients whom they can they involve in supplemental services such as financial literacy and asset building. It has not yet been proven that this approach works.

2. In expanding the small base of committed volunteers in El Paso , recruitment should focus on reaching volunteers who are committed to promoting asset building.

3. The El Paso Affordable Housing Credit Union has been successful in using grassroots techniques to bring affordable housing to the Sparks colonia. Through word of mouth and promotion by community leaders, a holistic approach to financial education that includes taxpayer education and has a final goal of home ownership has been implemented. The program also includes one-on-one counseling and focuses on connecting families with available services such as down-payment assistance programs and housing grants. This approach has yielded an extraordinarily high success rate of home purchase for participants of 15%. The use of local leaders is a lesson that free tax preparation and financial education services can learn from.

4. An El Paso credit union that operates a VITA sites permits immediate opening of savings accounts for taxpayers, which appears more successful than having financial institution staff offering savings accounts at other VITA sites.

5. The rapid growth of the El Paso VITA program (from 13 to 32 sites in two years) may have contributed to a volunteer shortage. The Task Force of Southern Arizona should carefully measure its potential capacity before expanding the number of sites. Since high quality tax preparation, costumer satisfaction, and volunteer retention are essential to the long-term health of the program, premature expansion could ultimately have a negative effect on the program.

Other groups which wish to apply the apply the criteria used in this study to their own operations can contact Erin Markley at United Way of Tucson , (520) 903-9000 emarkley@unitedwaytucson.org

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On the Coalition Website

Tax Facts Campaign
In this March teleconference, Johnette T. Hartnett, Vice President of NCB Development Corporation presented the Tax Facts Campaign. Tax Facts is engaged with 12 cities for this tax filing season to assist existing tax outreach and filing assistance programs to incorporate efforts to reach people with disabilities. Richard Keeling, Tax Analyst with IRS-SPEC, talked about the IRS Disability Initiative. Audio files and Powerpoint presentations are available on the Coalition website.

Creole EITC flyer
Provided by Children’s Services Council of Broward County.

EITC flyers
Provided by the Piton Foundation  

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VITA Quality Alerts

The IRS is issuing a series of Volunteer Quality Alerts during the 2005 filing season to provide information and assistance to VITA preparers. The following is a list of the alerts that have been issued so far this year.

• Volunteer Quality Alert - 2005-1: Grandniece/nephew as a Qualifying Individual
• Volunteer Quality Alert - 2005-2: Tax Treatment of Cash Contributions for Tsunami Relief
• Volunteer Quality Alert - 2005-3: Asking the Right Questions
• Volunteer Quality Alert - 2005-4: Filing & Marital Status—The Tax Connection
• Volunteer Quality Alert - 2005-5: Form W-2 Wage and Tax Statement
• Volunteer Quality Alert - 2005-6: Top 3 e-File Rejects
• Volunteer Quality Alert - 2005-7: Other Income
• Volunteer Quality Alert - 2005-8: Child & Dependent Care Credit
• Volunteer Quality Alert - 2005-9: Adjustments
• Volunteer Quality Alert - 2005-10: Interpreting Form 1098T, Tuition Statement
• Volunteer Quality Alert - 2005-11: Wrapping up the Filing Season

To access the alerts, go to www.irs.gov and enter “vita quality alert” in the search box.

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APRIL

Friday, April 15 Early Bird Registration closes for the National League of Cities' 2005 National Summit on Your City’s Families, Sept. 25-28, 2005  in San Antonio , TX .  The event focuses participants’ attention on what local government can do, both independently and in partnership with others, to improve education and afterschool programs, engage young people in community decision making, and create supports for low-income working families. Details.

Tuesday, April 19 Celebrating the End of the Tax Season Conference Call from the National Community Tax Coalition. This session is an opportunity to celebrate milestones, report data and find out more about the National Community Tax Coalition self-assessment survey and program listing. Sign up online.

Thursday, April 28 Policy Briefing on Capitol Hill by the Native Financial Education Coalition. For details, contact Joanna Donohoe, 561-626-9700 or joanna@donohoeconsulting.com

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