2 practices improve quality of returns
Up-to-date tax credit eligibility information for tax year 2006
Are you keeping up with community tax news?
Affiliates in the news
Program Profile: Accounting Aid Society
New resources
Advocacy updates
Calendar
Jobs

2 practices improve quality of returns

This past tax season the Annie E. Casey Foundation supported Amy Brown to conduct a second annual Quality Review of free tax sites. Overall, sites performed better than last year in terms of number of mistakes, but the mistakes tended to be more serious ones.

The study did identify two operational practices that appear to improve quality. The first is a sort of double-intake, where clients self-complete the intake form but then it is reviewed with a staff or volunteer screener. This seems to catch both typos and handwriting problems, and also reduce miscommunication errors. The second is having a quality review of each return before the client leaves. To make a difference, the review needs to be done by a knowledgeable person and look at more than just paperwork, asking questions about household composition, sources of income, etc. One other thing worth noting: sites had most trouble in a few specific areas—schedules A, C and E; and education and retirement savings credits.

This year's study also looked at a small number of commercially prepared paid tax returns. You'll be pleased to learn that the free tax sites did extremely well in comparison. The paid returns had far more mistakes and more serious ones.

The Coalition expects to make the two reports available on our website soon.

 

Up-to-date tax credit eligibility information for tax year 2006

For those of you who want to get a head start on getting the word out about the Earned Income Credit, the income eligibility guidelines and maximum credit amounts for tax year 2006 are listed below:

• Families with one child who earn less than $32,001 in 2006 (or less than $34,001 for married workers) are eligible for a credit of up to $2,747.
• Families with two or more children who earn less than $36,348 in 2006 (or less than $38,348 for married workers) are eligible for a credit of up to $4,536.
• Workers without a qualifying child who earn less than $12,120 in 2006 (or less than $14,120 for married workers) are eligible for a credit of up to $412.
• Investment Income Limit = $2,800.
• Child Tax Credit is up to $1,000 per dependent child. The Additional Child Tax Earnings Threshold is $11,300 in 2006.
  

Are you keeping up with community tax news?

To keep you informed about community tax news and policy, the operations of free tax sites, and tax issues affecting immigrants, the Coalition hosts three email listservs. If you are not already participating, you can sign up at any time.

Tax Roundtable listserv is for Coalition affiliates including organizations providing free tax preparation, EITC Outreach, advocacy for low-income taxpayers, or related activities. The listserv provides:

• Analyses of new tax policies and procedures affecting low-income taxpayers and free tax preparation programs
• Action alerts with opportunities to promote the interests of low-income taxpayers
• Opportunities for leaders of free tax preparation programs to share strategies, questions, and solutions to challenges (we have separate listservs for Site Managers and for those serving immigrants)

Message frequency is 10/week.

Site Manager listserv is aimed at managers of free tax preparation sites. It covers:

• Practical Site Management Tips
• Concerns of VITA Sites including:
• TaxWise Software issues
• Customer Service at Tax Sites
• Volunteer Management

This listserv is open to anyone. Message frequency is 1/week.

Immigrant Taxpayer listserv is open to people involved in community taxes who work with immigrants. It provides:

• Updates and analyses of policies affecting immigrant taxpayers
• Discussion by Low Income Tax Clinics, free tax preparation programs, and advocates of challenges facing immigrant taxpayers
• Advocacy alerts on immigrant taxpayer issues

Message frequency is 2-3/week.

Each listserv provides you the option to receive a daily digest of messages rather than immediate individual messages.

Sign up for these listservs, and other services of the Coalition.

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It's time to get serious about reducing poverty in Milwaukee

We wish to make a very simple but very important point: Poverty in Milwaukee can be reduced. It can even be eliminated, over time. We need to figure out what we did right during the 1990s, then do it again and do it better.

Mayor Tom Barrett has taken the lead by assembling nearly a dozen local leaders from the fields of education, social services, labor and business to serve on an Anti-Poverty Committee. The mayor has asked the two of us, together with Hugo Cardona, to co-chair this effort. Read the full article in the Milwaukee Journal Sentinel.

From an op ed co-written by Deborah Blanks, CEO of the Social Development Commission

 

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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. Read the full story.

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Updated EITC data from Brookings Institution

The Brookings Institution has updated their interactive EITC website with ZIP code-level data through tax year 2003. The new site is available from the main Brookings EITC page.

The range of data available to users now is much greater than in the past. In addition to EITC-specific data, the site allows users to select and view information including receipt of other tax credits, refunds and balances due, RALs, paid preparer usage, and taxpayer adjusted gross income.

Split Refunds Fact Sheet [DOC,40 KB, posted 6/16/06]
A Fact Sheet from the IRS providing preliminary information on how taxpayers will be permitted to split tax refunds into 2 or 3 separate accounts, such as savings and checking.

 

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1. VICTORY!

Protecting the EITC and other tax refunds and benefits for Legal Immigrants: The month of May saw a flurry of amendments to the pending Immigration Bill (S. 2611) seeking to curb tax benefits to immigrants.

a. Big victory: There will be no cuts to the EITC for legal immigrants. In a vote of 60-37, the Senate rejected a proposed amendment (No. 4108) that would deny EITC to immigrants after they have adjusted their status. Several Republicans, including Sen. Brownback (R-KS) and Sen. Spector (R-PA) got up on the floor to support the EITC! The relentless calls from our affiliates—you—made a big difference.

b. Close victory: No cuts for social security benefits for immigrants. In a vote of 50-49, the Senate narrowly agreed to TABLE an amendment (No. 3985) that would deny Social Security benefits to immigrants, even though they pay into the system in the form of payroll taxes.

c. Close loss: Cuts to ALL tax credits and ALL refunds for immigrants during the years they are undocumented if they adjust their status after 2006. In a 50-47 vote, the Senate agreed to the amendment (No. 4136) proposed by Sen. Ensign to S. 2611 to ensure that undocumented immigrants who adjust their status under this bill do not receive any tax refunds or credits when they pay their back taxes to adjust their status.

d. It’s not over till it’s over! An agreement on a compromise of the House and Senate versions of the immigration bill is being delayed until after the Congressional summer recess and probably the fall elections. House members will hold hearings across the country in August. We will have talking points and letter to the editor template in case there is a hearing near you!

2. Update on Federal Funding for Free Tax Prep

Affiliates met over the phone with numerous Senators’ tax staffers who are either on the Senate Finance Committee or the Senate Appropriations Committee for Treasury to push for $10 million for funding for free tax prep. At these calls, affiliates from each Senator’s home state gave engaging presentations on their local work and the impact the EITC and free tax prep programs have on working families in their communities. The National Community Tax Coalition set up these meetings, recruited affiliates to participate and prepared affiliates for the call. If you are from any of the following states, you can help us by contacting your senator’s tax staffer, as your Senator is on the Senate Appropriations Committee:

• AK
• AL
• CA
• CO
• HI
• IA
• ID
• KS
• KY
• LA
• MD
• MO
• MS
• MT
• ND
• NH
• NM
• NV
• OH
• PA
• SD
• TX
• UT
• VT
• WI

Please contact Diya Bose at dbose@centerforprogress.org for more details.

3. Progress!

Senate Finance Committee is moving forward with the authorizing bill for $10 billion for free tax preparation. Now as outlined above, we need the Appropriations Committee to appropriate the money. We still need your help! For more information, contact dbose@centerforprogress.org.

4. IRS National Public Liaison Meeting

a. Met with Commissioner Everson about the tax gap. The good news is that Commissioner Everson did not mention EITC audits as a major priority. The bad news is that his emphasis is clearly on enforcement rather than increasing services. We will be submitting questions for a hearing in June on the Senate Finance Committee.

b. Met with Peg Connell, who is the lead for the Taxpayer Assistance Blueprint, the IRS' 5-year service plan. This is a crucial document as Congress will base their funding for IRS services on it.

c. Met with Lisa McLane, who oversees the Innocent Spouse Form Redesign and shared our concerns, especially regarding information sharing and protecting the privacy of victims of domestic violence.

d. Met with Floyd Williams, Director, Legislative Affairs, who outlined what happened in the 12 or so Congressional hearings already held with the IRS this year, and three more to come. Good news: the House is becoming less rabid about attacking the EITC.

5. Four EITC Outreach Pilots meet to Discuss Learnings

This past tax season, the National Community Tax Coalition funded four pilot projects in four cities that aimed to increase EITC uptake among selected groups. The four organizations that participated in the outreach project met in Chicago on June 7th to discuss findings and recommend strategies that can be used in the future. The four cities and their targeted populations for EITC outreach are:

• Fargo/Moorhead, ND—Rural and small town EITC recipients
• Miami, FL—Haitian Community
• Chicago, IL—Hispanic Community
• Baltimore, MD—Child care providers

The recommendations for strategies the Coalition can pursue to increase EITC uptake fall into the following areas:

• Language and Messaging
• VITA Service
• Legislative Advocacy
• Administrative Advocacy
• Funding
• Research and Collaboration

Engaging a communications firm to thoroughly research, test and develop EITC outreach messages for specific communities seemed to be on the top on everyone’s agenda. The NCTC will seek funding for communications strategy as well as future research and pilots.

6. NCTC holds meeting to discuss advocacy strategy and plan for upcoming year

The National Community Tax Coalition commissioned Spitfire Strategies to conduct research to better understand its audiences for advocacy. Spitfire conducted its research on the following groups and others interested in the EITC: the media, policy makers, and NCTC affiliates. On June 8th, the firm presented its findings to a group of NCTC staff, some Steering Committee members, and several affiliates representing diverse populations around the country. Six major goals and a number of sub-goals and strategies emerged from the meeting. The NCTC Steering Committee approved the following six major goals to allow the firm to develop its communications plan in consultation with the NCTC Advocacy Working Group.

Policy Goals:

• Craft a single message that runs through every aspect of our work
• Put forward a proactive proposal for improving the EITC and low-income tax credits.
• Continue to defeat passage of federal legislation that would directly harm the EITC program and its beneficiaries

Affiliate Goals:

• Broaden Affiliate Engagement: Mobilize 400 affiliates in advocacy campaigns and engage new affiliates
• Deepen Affiliate Engagement: Develop group of advocacy leaders
• Secure New Strategic Allies, including unions and faith-based organizations.

To join the Advocacy Working Group, please contact Diya Bose at dbose@centerforprogress.org.

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July

Tuesday July 11-Thursday 13, IRS Tax Forum in Chicago, IL

Wednesday July 19—Thursday 20, Asset Building and Financial Education Training Institute hosted by Cal/Neva CASH in San Francisco, Calif. Asset building, policy, advocacy, financial education. For additional information, www.cal-neva.org/eitc  or contact Zenae Scott 916/443-1721 x 17.

Tuesday July 25—Thursday 27, IRS Tax Forum in Atlanta, GA

August

Tuesday August 1—Thursday 3, Expanding Native Opportunity: Native IDA Initiative presented by First Nations Development Institute, First Nations Oweesta Corporation, and CFED, in Fairbanks, Alaska. Applications accepted until June 16, 2006. Download an application from www.cfed.org/go/nida.

Tuesday, August 1—Thursday 3, IRS Tax Forum in Orlando, FL

Tuesday August 22—Thursday 24, IRS Tax Forum in Las Vegas, NV

Tuesday August 29—Thursday 31, IRS Tax Forum in New York, NY

September

Tuesday, September 19—Thursday 21, CFED will host the 2006 Assets Learning Conference in Phoeniz, Ariz. Go to www.assetsconference.org for more information and to register.

October

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

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Project Manager

The Center for Economic Progress seeks a skilled professional to lead a national planning project that will research the potential of linking the tax preparation process to financial planning and wealth-building opportunities for low-income workers and familiesThe planning process will lead, in all likelihood, into a national demonstration project in year two.

For more details, contact Gregory D. Fields, Director of Administrative Operations, gfields@centerforprogress.org

 

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