Contact: Kristin Lawton, 202.408.9788
Mar 10, 2015
Volunteer Tax Preparers Helped Return Nearly $4 Billion to Low-Income Taxpayers Across the Nation
Free tax preparation services found to boost financial stability, stimulate local economies
Washington, D.C. - As federal policymakers debate how to address income inequality, millions of taxpayers are already finding a relatively simple solution through their tax returns. More than $3.89 billion in federal income taxes has been returned to those with modest wages as a result of free tax preparation services offered by IRS-certified volunteers.
A new breakdown of national IRS data compiled by the Corporation for Enterprise Development (CFED) shows that tax preparers at Volunteer Income Tax Assistance (VITA) sites and Tax Counseling for the Elderly (TCE) sites across the nation helped more than 3.2 million taxpayers make the most of their returns during the 2014 tax season.
VITA programs offer lower-income taxpayers a free alternative to more costly, and often predatory, tax preparation services. VITA sites are IRS-sponsored and are closely monitored by the agency, giving them a far lower error rate than many self- and paid- tax preparation services.
More than $1.1 billion was returned to workers through the Earned Income Tax Credit (EITC), according to the data compiled by CFED. The EITC is widely regarded as one of the nation's most powerful anti-poverty programs, yet one in every five workers eligible for the credit does not claim it.
The IRS reports that those most likely to overlook their eligibility for the EITC include the elderly, workers with disabilities, grandparents raising children, English language learners and those living in remote areas. VITA sites help to raise awareness of the credit in their communities to ensure that every worker eligible for the EITC receives it and gets the correct amount.
"Volunteer income tax assistance not only helps taxpayers and their families make the most of their tax returns free of charge, but also helps to stimulate the local economy by putting more money back into the pockets of local consumers," said Andrea Levere, president of CFED. CFED's newly-launched Taxpayer Opportunity Network brings together individuals and organizations providing free tax preparation across the country to form a learning community for effective collaboration.
VITA sites are generally located at community or neighborhood centers, libraries, schools, shopping malls and other convenient locations. Local taxpayers can find their nearest site by visiting the IRS' VITA Site Locator, found here.
CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina, and San Francisco, California.