Paul Bass Photo
With 11 weeks left to file income-tax returns, the state’s tax man brought a warning and a suggestion to lower-income working families.
The warning: Avoid those storefront tax-preparation services that prey on lower-income filers.
The suggestion: Head to one of the volunteer “VITA” free tax-prep centers that help families get back as much as $10,000 (or more) through the federal and state Earned Income Tax Credit (EITC) programs.
The tax man, state Commissioner of Revenue Services Kevin Sullivan (pictured above with Mayor Toni Harp), delivered that warning and suggestion at a City Hall press conference Monday.
The point of the press conference: To let families earning up to $52,000 know that they may qualify for substantial refunds under the EITC. And to let them know that those “predatory” storefront tax-prep companies will often rip people off rather than truly help them recover all the money that’s owed them.
“There are lots of reasons to stay away from those places,” including the way some preparers tax unnecessary fees, convince customers to let them collect the refund check on their behalf, or sign returns on behalf of customers, Sullivan said. (First sign of trouble: When the services sent hawkers dressed as the Statue of Liberty out in the street to pull in unsuspecting customers.)
“There is no reason to pay anyone—particularly a storefront operation — to have this income tax return prepared,” Sullivan said.
The alternative: Go to a VITA center.
VITA stands for Volunteer Income Tax Assistance (VITA). The campaign’s volunteers set up sites at places like public schools and the library and social-service agencies this time of year to prepare low-income working people’s tax returns for free. They get trained in how to figure out how much a refund filers can get under the EITC program.
Click here for a United Way-compiled list of where and when you can go to have a VITA volunteer do your taxes between now and mid-April.
Looney spent more than a decade crusading for the state EITC, which finally passed in 2011.
New Haven has the state’s most active contingent of VITA volunteers, according to Mayor Toni Harp, who helped New Haven state Sen. Martin Looney get a state EITC passed when she served with him in the legislature. She said New Haven VITA volunteers helped New Haveners get $590,000 back through the EITC in 2013 (read a story about their success here), putting an additional $6.4 million into circulation in the city economy.
“You have 11 weeks” to do that again this year, she told assembled volunteers (with whom she posed, above).
Statewide, VITA helped 180,000 low-income filers last year, reported Matthew Santacroce, a New Haven VITA volunteer as well as a policy analyst for the advocacy group Connecticut Voices for Children. He said he’d like to see the state EITC, which was passed in 2011 then subsequently reduced amid a budget crunch, restored to its original level (30, rather than 25, percent of the federal credit) and include a child-care credit, as well.
I was outraged to read Mr. Sullivan's comments about retail
tax preparation businesses. I am a Liberty Tax franchisee and proudly run a
legitimate business. All of our tax preparers complete a 10 week tax class
in the fall. In addition, they must pass three certification exams from
Liberty. Using costumed Liberty wavers is a marketing technique to attract
people to our offices. They are not villains luring innocent people into some kind of trap.
Once inside, they see how professional we are and how well we treat them. Then they choose to use our services.
Characterizing us as taking advantage of low income people is unfair and
untrue. We prepare all types of tax returns with varying levels of
complexity. Each year, I continue my tax education to increase my expertise. I am also a member of NATP, the National Association of Tax Professionals and passed the IRS's RTRP exam.
I understand Mr. Sullivan wants to promote the VITA sites, but frightening people into
going to them is alarming. He has no idea the limited training that the
people at those sites receive. I can't tell you how many of those tax
returns I have had to fix in my eight years in business. In fact, one of my
employees came to my business simply because she did not feel adequately
trained there. Where are the VITA sites when their customers get letters from the IRS?
They are closed. So their customers come to my office, and I or my staff help them respond to the IRS, often repairing the VITA prepared tax return AND at no charge!
It's tough enough to do business in this state, but to have a state
official deliberately trash legitimate tax preparation business like mine,
and yes, my competitors like H&R Block, is irresponsible and damaging.
Deborah Prior,
Liberty Tax Service
Manchester, CT