Free tax help: Too good to be true?

tax
By Lisa Peterson-de la Cueva , TC Daily Planet
February 05, 2008

Pensions. Dividends. Deductible. These tax terms are enough to make thousands of taxpayers delay the dirty deed until the last minute. But Stacy Ballard didn’t seem too fazed when a volunteer with AccountAbility Minnesota posed questions while helping her do her taxes. Ballard, a North Minneapolis resident, had come to the basement of the Minneapolis Urban League with documentation in hand ready to get help with her taxes. What’s the incentive to getting her taxes done here so early in the season? The earlier she does it the earlier she gets her refund. Oh, and it’s free.

Ballard isn’t the only one eligible to get her taxes done for free. AccountAbility MN, the Minnesota Department of Revenue, and AARP all provide free tax help in at least 28 Twin Cities metro sites. Community based organizations, mostly located in churches and community centers, also provide their own tax help. The three major agencies often partner with these community organizations, as in the case of AccountAbility MN which runs one of its eighteen sites at the Minneapolis Urban League.

Most free tax help targets low income and vulnerable taxpayers who may not know they should get a refund. John Richards, who supervises the tax preparation program at Waite House, says, “Millions of dollars go unclaimed each year, mostly by low-income people, and we want to make sure that people get what’s coming to them.”

This includes low literate adults and those with limited English skills. Richards adds, “Some newly arrived immigrants are totally confused by the tax system, and we assure them that we are also confused by it.” Organizations try to hire bilingual community outreach coordinators and volunteers, a rarity when it’s often hard to recruit volunteers at all.

Not everyone benefiting from free tax clinics must meet low income requirements. The AARP’s services are mostly geared towards seniors and their clinics are generally given during the day.

Most free tax services like AARP simply help their clients with their taxes, but Yolanda Smith drove to the Minneapolis Urban League from South Minneapolis to make sure she got her refund immediately. She participates in the Express Refund Loan and Savings program at AccountAbility MN. Unlike most beneficiaries of free tax preparation, Smith can potentially get her refund the next day.

Here’s how it works: clients sign up for a savings account at a credit union, the credit union then lends the money to the clients until the Federal government pays the credit union back. For Smith, 39, that means she got her refund immediately and was left with her first savings account.

“I just moved here in 2005…and actually I never had a savings account before. This is my second year in the program and it’s been great. It’s free and you just can’t beat that!” She says laughing and shaking her head while waving a small card with her credit union account number. “And now, I put in all my direct deposits from my job.”

Smith graduated from a program at the Project for Pride and Living and her counselor told her about the free tax clinics. She says she knew about the free tax help, but not about the savings program. Last year the Express Refund Loan and Savings program served 371 people and 82% of those accounts are still open.

It’s not always smooth sailing though. Most programs are volunteer-based, which means organizations have to recruit, train, and retain their volunteers. Each agency provides their volunteers with training on tax preparation and software, after which volunteers prove their knowledge in an exam approved by the IRS. One of the biggest challenges volunteers face is the frenzy of taxpayers, especially as the season starts and ends. Jonas Parra, Community Outreach Coordinator for the Hispanic community at the Minnesota Department of Revenue commented, “It requires a ‘volunteer spirit’ and a lot of patience to deal with many different types of tax payers… It can be really hectic, but at the end it’s worth it to see smiling faces with a little bit more money in their pockets.”

Programs throughout the Twin Cities deal with the challenges of last minute taxpayers. Wendy Neurer, Volunteer Coordinator at the St. Paul Public Libraries says the last minute drive “was a lot to deal with. This Saturday Rondo Community Outreach Library kicks off tax season with representatives of the AARP and United Way.”

They aren’t the only ones. This week organizations throughout the Twin Cities are starting up free tax clinics with the hope that people will sign up while it’s still calm.

***
The MN Department of Revenue maintains a consolidated list of free tax sites in the Twin Cities on their website: http://www.taxes.state.mn.us/taxes/vita/free_tax_prep.shtml.

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