By Todd Cohen
HIGH POINT, N.C. — In 2003, nearly 5,800 High Point residents who filed federal tax returns and were eligible for the earned-income tax credit did not claim the credit, resulting in a potential loss of over $11.1 million.
Desha Williams, vice president of community impact for United Way of Greater High Point, wants to reverse that potential loss to taxpayers.
Modeled on an IRS-sponsored program Williams instituted in 2002 in suburban Philadelphia when she was director of community services for Montgomery County, United Way has teamed up with the city of High Point to launch a program known as Volunteer Income Tax Assistance.
Working with roughly 40 volunteers who receive IRS training, the program provides free income-tax assistance to low- and moderate-income people.
The volunteer tax preparers help clients fill out their tax returns and encourage them to take advantage of tax credits such as the earned-income tax credit, child tax credit and dependent-care credit.
In 2003, based on data compiled by the Brookings Institution in Washington, D.C., High Point residents filed over 38,500 tax returns, with nearly 9,100 claiming the credit, Williams says.
The IRS returned nearly $17.5 million to those taxpayers, or over $1,900 on average per filer, she says.
The tax-assistance program “is not just about getting your taxes done,” she says. “It’s also making sure that eligible filers get the tax credits they qualify for.”
The IRS provides training for volunteer tax preparers, as well as software known as “Taxwise” that the volunteers use to help low- and moderate-income clients complete their tax returns and claim tax credits.
Filers can visit the community development and housing office for the city of High Point at 201 Fourth Street through April 15, the deadline for filing federal tax returns.
Based on the filer’s income and number of dependents, the software program will alert the volunteer tax preparer that the filer might be eligible for tax credits.
United Way and the city of High Point also have partnered with Family Service of the Piedmont, which will provide filers with credit counseling so they can make “smart choices” about spending any refunds.
“We want them to use the money to make smart choices that will them to economic self-sufficiency,” Williams says.
And because the tax-assistance service is free, Williams says, it will save filers the cost of paying “predatory lenders” that promise to help low-income clients get “rapid refunds” but charge as much as 600 percent interest to provide the service, Williams says.
According to the Brookings Institution, she says, over 322,000 North Carolina families in 2003 paid an average rapid-refund price of $100 to have their taxes filed, representing a “loss” of over $32 million that families could have used to cover essential expenses.
Williams says she hopes the new program can serve just over 900 people its first year, or 10 percent of those eligible to file claims for tax credits.
The IRS, she says, “would like to see low- and moderate-income individuals claim their tax credits.”
For tax assistance, or to be a volunteer tax preparer, call 336.883.3041.