Save the Date for National Conference
Credit counseling at tax site
Mayor volunteers at tax site
Second Biloxi Super Saturday Tax Day
IRS invites taxpayers to apply for Taxpayer Panel
Credit Path Seminar offered
Affiliates in the news
Program Profile: Biloxi responds to disaster
Advocacy updates
New resources
Calendar

Save the Date for National Conference

Building Prosperity for Working Families Conference

• Wednesday, October 11 – Friday, October 13, 2006 in Los Angeles, California

• Hosted by the National Community Tax Coalition
• More information on our Save the Date card.

November training brings March success

Based on what she learned from the Coalition’s November teleconference on Credit Counseling at Free Tax Preparation Sites, Lori Belden helped the CASH Coalition of Chittenden County to organize a Free Credit Report Day for clients who came to its free tax preparation sites in Burlington, VT.

The CASH Coalition of Chittenden County stands for Creating Assets, Savings and Hope. It's made up of local nonprofits, city government, IRS, HUD, USDA, Opportunities Credit Union and Northfield Savings Bank, where Belden is the Electronic Banking Manager and CRA Officer.

The service was initially advertised as appointment-based. About five days before the event they opened it up to walk-in traffic and conducted targeted marketing because half the people who had asked for appointments dropped out when called back with a specific time. As the sponsors had budgeted for 50 credit scores, there was spare capacity. Ultimately, 8–10 walk-ins came, about four of the people with appointments didn’t show, and 22 people were served, which was a great success.

While organizers thought that offering free credit scores would be the “hook” to attract clients, they found that clients particularly appreciated the credit counseling. They left saying, “My credit is really bad, but now I know what I can do to improve it.” As a result of this lesson, the CASH Coalition is considering offering an event for just credit counseling in the Fall.

 

Mayor of Duluth volunteers at tax site

If you want municipal support for your tax program, you can’t do much better than Community Action Duluth, which has Mayor Herb Bergson as a volunteer benefits screener at its site.

Mayor Bergland (front, right) at Tax Benefits training. Photo by Community Action Duluth

In its second year of free tax preparation, Community Action Duluth has doubled the number of returns prepared so far this year compared to last year. Two bankers from US Bank are available on site to open bank accounts and are assisting customers to obtain free credit reports from the www.annualcreditreport.com website. The bank volunteers also talk to people about using their tax refund for credit repair when it’s appropriate. Experience shows that many customers are interested in obtaining their credit report.

Another new service this year is benefits screening using a web-based tool developed by the Children’s Defense Fund of MN. Trained volunteers screen tax site customers for nine different programs including food support, energy assistance, child care subsidies and health programs. If a person may be eligible for one of the programs, she receives an application on the spot and information about the address and phone number of the program. For the health programs, a referral is generated directly to the local Health Care Access office and the person receives a phone call the next day.

A billboard that drew lots of clients.

Finally, Community Action Duluth offers matched savings accounts and financial education to all customers. Many people with existing IDA matched savings accounts are having their taxes prepared at its site and are using their refunds for credit repair or to add to their IDA accounts.

Second Biloxi Super Saturday Tax Day

Coalition staff traveled to Biloxi, Miss., on March 11 to help Biloxi EITC Coalition prepare tax returns for hurricane survivors. Forty-nine taxpayers were served, many with property losses that required tax expertise beyond the training of VITA volunteers.

Volunteers, IRS and staff

With each casualty loss return requiring from one to two hours, how did they do it? They started off with two rooms, one for completing regular returns, the other for casualty loss returns. Three CPAs from Illinois and one SPEC staff from Atlanta handled the casualty losses, but were not familiar with TaxWise. Local volunteer tax preparers were trained on TaxWise, but not on casualty losses. Staff realized after a while that the process would be quicker if the local volunteers entered the basic data into TaxWise first, then handed the incomplete returns over to the CPAs to finish off the complexities of casualty losses.

SPEC staff from Birmingham, Jackson, and New Orleans assisted with intake, which went smoothly. Many taxpayers had to file paper returns because the spouse was not present, social security cards were not available, etc. Four taxpayers were referred to the pro-bono casualty loss services of tax professionals organized by the IRS.

The third Super Saturday event in Biloxi is scheduled for April 8. Already 40 taxpayers have signed up for service.

 

IRS invites taxpayers to apply for Taxpayer Panel

The Internal Revenue Service is inviting civic-minded individuals to help improve the nation’s tax agency by applying to be members of the Taxpayer Advocacy Panel. The panel provides a forum for citizens from each state to make suggestions regarding IRS decision-making.

Taxpayer Advocacy Panel (TAP) members:

• Provide opportunities for citizen input and make recommendations to the IRS and Treasury on customer-service issues.
• Identify and prioritize taxpayer issues.
• Report annually to Treasury, the IRS and the National Taxpayer Advocate.
• Participate in meetings where taxpayers are invited to raise issues about their experiences with the IRS.
• Refer taxpayers who contact the panels to the IRS offices best able to address their issues.

To qualify as a TAP member, applicants must be U.S. citizens and be able to commit 300 to 500 hours during the year to the panel. In addition, they must be current with their tax obligations and pass a criminal background check. 

The application is available at www.improveirs.org. Applications are due by April 28, 2006.

 

Credit Path Seminar offered

Alternatives Federal Credit Union has announced its fourth annual Credit Path Seminar for Credit Unions.

Perhaps when researching better ways to deliver financial services to low- and moderate-income people, you've heard mention of the Credit Path®.  Or maybe you've heard that Alternatives has been an innovator in delivering services to the underserved. If you are interested in learning more about the Credit Path® and how Alternatives uses this model for its program development and service targeting, please plan to attend the Credit Path® Seminar.

• Where: Alternatives Federal Credit Union, Ithaca, New York
• Who: Credit Unions interested in serving members of modest means
• When: Monday and Tuesday, May 8-9, 2006
• Cost: $299 per person

For more information contact Amy Audetat, aaudetat@alternatives.org.

 

back to top

More low-income workers file for earned income tax credit

On February 12 the Miami Herald ran a story promoting the EITC, which focused on Coalition affiliate The Prosperity Campaign, a project of the Miami-based Human Services Coalition. The project began outreach about the credit in 2002, offering free tax preparation at dozens of cities across the county. Similar efforts began the same year in Broward County through the Children's Services Council.

Miami ranks as No. 4 of the top cities in the country where the credit is claimed. That's a testament to the high level of working poor there, according to The Brookings Institution's Alan Berube.

''A lot of people talk about Miami being a poor city and having a lot of poor individuals, but this is a reminder that most of those individuals work,'' said Berube, a research fellow who studies low-income urban workers.

 

Sen. John Edwards blogs his visit to tax site

Senator John Edwards visited a tax site in Chicago in March, and recorded his impressions the next day.

"Yesterday I spent some time in Southwest Chicago visiting a free tax preparation site where hard working men and women can go to get help navigating the increasingly complicated tax code. The program, which is sponsored by the Center for Economic Progress and Citibank, not only provides tax preparation services, it also gives low-income families financial advice and the opportunity to open bank accounts. This work is fundamental to the concept of asset building that many of you have probably heard me talk about a lot and it was great to see how programs like this can directly help people who are struggling.  

"One thing I know is true—we want to make it easier for those who qualify to take advantage of the Earned Income Tax Credit or to open a bank account to build assets. These are the very people we should be trying to lift up, and it was great to see what a difference the people at the Center for Economic Progress are making in Chicago."

John Edwards One America Blog 3/14/06

 

back to top

Responding to Disaster

The 2006 tax season has been far from ordinary. The recent hurricane disasters along the Gulf Coast have presented new challenges for tax preparers that were never present in previous years. In this month’s program profile, we feature the Biloxi EITC Coalition, which was presented with several challenges. Read the full story.

back to top

Success! Major step toward federal funding of community tax prep

We had outstanding success with our mid-March campaign asking Senators to support funding for community tax preparation programs. Twenty-six Senators, including three Republicans, signed on to the Appropriations Committee letter sponsored by Sen. Durbin. Over one-quarter of the Senate signed on—an excellent result for a first-time sign-on letter!

Thanks to the over 250 of our affiliates who wrote and called your Senators! You made all the difference! Click here to see the actual letter and here to see the list of Senators who signed on. There will be a chance in the future to have your Senator weigh in in favor of the appropriation even if she/he didn’t sign the letter—we will keep you updated.

The Coalition will continue to work hard with Senator Durbin’s office and the Appropriations Committee to make this appropriation come to fruition. If you have any comments on what you think an appropriation for low-income tax preparation should look like, please send them to Diya Bose at dbose@centerforprogress.org.

 

National Community Tax Coalition comment letter expresses the group’s deep concern regarding the proposed IRS regulations for a new VITA record-keeping system. The Steering Committee of the National Community Tax Coalition strongly urged the IRS to withdraw proposed regulations that would burden free tax preparation sites with unnecessary reporting requirements and allow the IRS to reassign their volunteers. Click here for the comment letter and here for the federal register announcement of the proposed changes.

Ellie Cimaglia, Director of SPEC, W&I, addresses the National Community Tax Coalition’s concerns about the proposed IRS regulations for a new VITA record-keeping system. Cimaglia responds to the concerns raised by the National Community Tax Coalition about the proposed New Privacy Act System of Records (see above). Click here to view the response (please note this is not an official IRS response to whether the new regulations will move forward).

Center for Economic Progress participates in Treasury Inspector General for Tax Administration (TIGTA) audit of IRS services. Click here for the Center for Economic Progress' response to the audit. The section on SPEC services to VITA was written with extensive input from National Community Tax Coalition Steering Committee members and affiliates. Several Coalition affiliates also responded to the opportunity to participate in the audit, which the National Community Tax Coaltion announced on its Tax Roundtable listserv. Click here to join the listserv.

National Community Tax Coalition requests input into Congressionally Mandated Refund Anticipation Loan (RAL) Study. The Coalition and national partners led by the National Consumer Law Center and Consumer Federation of America wrote to Treasury Secretary Snow and IRS Commissioner Everson to request that groups that have done extensive research and have been working on the issue directly are consulted as a part of the development of the study. The Coalition received a response from the IRS stating it was too late for consultation for the June 30 report. Click here to view the letter.

Confidentiality of taxpayer information is eroded to benefit private industry. National Community Tax Coalition opposes IRS outsourcing of debt collection, and IRS allowing paid preparers to sell taxpayer information.

See an excellent New York Times editorial on both of these issues. The erosion of confidentiality of taxpayer information will only worsen if provisions in the House Immigration bill (HR 4437) become law, requiring the IRS to work with DHS (formerly INS) to help identify undocumented immigrants.

The New York Times reveals that President Bush’s investment tax cuts mainly benefit the super-rich (the top one-tenth of the top 1%). The super-super rich (those earning over $10 million) benefited so much they now pay the same tax rate as those earning between $200,000 and $500,0000. Our tax code has become much less progressive! David Cay Johnston, keynote speaker at the Coalition's last conference, analyzes all the data on these tax cuts as Congress prepares to debate whether to make them permanent. Click here for the full article.

“War on Poverty, Redefined.” In this column in The American Prospect, John Alexander Burton criticizes the unfair treatment EITC recipients face. Low-income taxpayers are not only more likely to be audited, but the criminal enforcement wing of the IRS also denies their basic rights by neglecting to give them advanced notice before taking action. Click here for the full article. For the position of the National Community Tax Coalition on the targeted crackdown on EITC recipients, click here.

GAO releases study showing serious errors by paid preparers. Click here for the study released April 4 and here for highlights of the findings.

back to top

Report recommends Ohio EITC for working families

In 2003, more than 769,000 Ohio families received the federal Earned Income Tax Credit (EITC), a refundable tax credit for workers in families that make less than $37,263. The average EITC in Ohio was $1,720, bringing more than $1.3 billion into Ohio communities.

However, more than 65% of Ohioans receiving the EITC (500,000 families) went to a paid preparer and more than 60% of those families bought high-interest, refund anticipation loans (RALs), costing Ohio families more than $100 million. A new report by Policy Matters Ohio details how an Ohio EITC credit and better regulation on loans would further help families receive their full refunds.

 

EITC Outreach

Web Banner Promoting Tax Credits [PDF, 93 KB, posted 3/24/06]
Example of a banner that could be placed on a website, promoting the EITC, Child Tax Credit, Saver's Credit, and Education Credits. Provided by the Piton Foundation.

EITC Flyer [PDF,1MB, posted 3/24/06]
Provided by the Piton Foundation.

EITC General Newsletter Article [PDF, 34 KB, posted 3/24/06]
Suitable for placing in newsletters of partners. Provided by the Piton Foundation.

EITC Email Message [PDF, 27KB, posted 3/24/06]
Could be distributed to contact lists, by partners and in electronic newsletters. Provided by the Piton Foundation.

EITC Poster in Spanish [PDF, 1MB, posted 3/24/06]
Provided by the Piton Foundation.

Volunteers

Education Credits Exercise [DOC, 190KB, posted 3/6/06]
A summary of the Hope Credit and Lifetime Learning Credit, with an exercise to test understanding of the rules for volunteer tax preparers. Provided by the Center for Economic Progress and Community Tax Aid.

Volunteer Certication Test [PDF, 3MB, posted 3/3/06]
This test, developed by the Center for Economic Progress, was approved by the IRS for certifying volunteer tax preparers for the Jan. –April 2006 tax filing season. It could be used as a model by other free tax preparation programs, if updated for new tax law and regulations. Included is the request for approval and answers to the test.

Managing a Tax Site

The Q Word [DOC, 90KB, posted 3/28/06]
Comments on quality issues gleaned from experiences at tax preparation sites by Barbara DelBene, Senior Training Specialist at the Center for Economic Progress. This week: Reviewing Tax Returns. Provided by the National Community Tax Coalition.

TCP Client Intake Sheet Instructions [DOC, 50KB, posted 3/24/06]
The Tax Counseling Project Client Intake Sheet is designed to collect vital information and determine if the taxpayer meets the eligibility requirements to receive free tax preparation services and other complementary services offered at the tax site. Instructions for its use are here. Provided by the Center for Economic Progress.

The Q Word [DOC, 70KB, posted 3/21/06]
Comments on quality issues gleaned from experiences at tax preparation sites by Barbara DelBene, Senior Training Specialist at the Center for Economic Progress. This week: Talk to the client, part 2. Provided by the National Community Tax Coalition.

The Q Word [DOC, 70KB, posted 3/14/06]
Comments on quality issues gleaned from experiences at tax preparation sites by Barbara DelBene, Senior Training Specialist at the Center for Economic Progress. This week: Talk to the client. Provided by the National Community Tax Coalition.

The Q Word [DOC, 70KB, posted 3/8/06]
Comments on quality issues gleaned from experiences at tax preparation sites by Barbara DelBene, Senior Training Specialist at the Center for Economic Progress. This week: Head of Household filing status. Provided by the National Community Tax Coalition.

Materials from the IRS

IRS Issues New Guidance Clarifying Eligibility of Hurricane Survivors for the Earned Income Credit and Child Tax Credit [distributed 3/30/06]
A series of questions and answers about dependency exemption scenarios.

Filing Season Reminders (Revised) 2006-06 [PDF, distributed 3/24/06]
Reminders about Site Information Sheets, Volunteer Assistance Summary Reports, Interview and Intake Sheets, Site Identification Numbers, Forms 8453, Document Control Numbers, and e-File Signature Authorizations.

Quality Review 2006-05 [PDF, distributed 3/9/06]
An explanation of the process for the new quality reviews.

Disaster Referral—Casualty Losses [DOC, 50KB, posted 3/6/06]
The American Institute of Certified Public Accountants and the American Association of Attorney-CPAs will provide pro-bono assistance to hurricane survivors with casualty (property) losses. This document explains the procedures and is accompanied by a script for volunteer tax preparers and a list of IRS Taxpayer Assistance Centers providing assistance for casualty losses.

Hurricane Disaster Resources

New Rules for Divorced or Separated Parents [PDF, distributed 2/13/06]
The Gulf Opportunity Zone Act of 2005 changed the definitions of custodial parent and noncustodial dependency exemptions, child tax credits, and other provisions. An IRS Volunteer Quality Alert.

back to top

June

June 13-15, Tuesday–Thursday, Expanding Native Opportunity: Native IDA Initiative presented by First Nations Development Institute, First Nations Oweesta Corporation, and CFED in Minneapolis. To apply for the upcoming training institute, go to www.cfed.org/go/nida to download an application.

October

Wednesday–Friday, October 11–13. Building Prosperity for Working Families Conference in Los Angeles. Hosted by the National Community Tax Coalition.

 

back to top