Tax season! For many, this time of year brings about as much welcome as a root canal. But for ASU students volunteering with community members in the Earned Income Tax Credit and Asset Development Initiative, tax season is the time to partner with hundreds of low-income workers and help save millions of dollars in tax credits.
“It’s great to see how happy people are when you tell them how much their refund will be,” says Nichole Cerny, an ASU volunteer tax preparer who has participated in the initiative for three years. “A lot of people don’t understand the tax code, so it makes me feel good that I can explain how they should keep track of their information while I’m preparing their taxes.”
Founded in 2002, the Earned Income Tax Credit and Asset Development Initiative is a partnership between the Tempe Community Council, City of Tempe, Tempe Schools Credit Union, Newtown CDC, IRS, and ASU designed to help low-income working taxpayers increase their economic self sufficiency and ultimately become homeowners in the community.
By offering free tax preparation and e-filing sites in Tempe and Guadalupe, volunteers educate working taxpayers about Earned Income Tax Credits, credits that can reduce taxable income and often provide refunds for low-income working taxpayers. In the past, lack of awareness has caused millions of dollars in Earned Income Tax Credits to go unclaimed each year. Thanks to the initiative, however, that has changed for many community members.
Over the past five years, volunteers have helped save more than $7 million additional Earned Income Tax Credits, granting an average of $1400 in tax credits to each taxpayer. During the 2005 tax season alone, the initiative served 538 taxpayers, resulting in $736,400 in federal tax refunds. On average, every volunteer hour has resulted in a federal refund of $530.
The volunteers are an eclectic group of retired teachers, former IRS workers, CEOs, and staff members from Tempe Schools Credit Union. Others, like Cerny, are ASU students from the School of Accountancy in the W.P Carey School of Business. This year, five volunteers are returning ASU students and alumni, seven are new student volunteers, and one is an employee in ASU’s financial aid office.
“Our ASU volunteers have made us the envy of all other community programs,” raves Kate Hanley, executive director of the Tempe Community Council. “They offer this talented stream of students who bring energy and fresh perspective to the initiative. It’s a challenge for other communities to find volunteers who contribute every year, but many of our ASU students return to volunteer year after year.”
Many ASU volunteers are recruited by Dr. Sanjay Gupta, faculty director of ASU’s Master of Accountancy & Information Systems and Master of Taxation programs. Gupta believes student volunteers benefit by seeing firsthand how the tax code can stimulate healthy economic behavior and make a positive impact on the community.
“In the classroom it’s difficult for students to comprehend how public policy works through the tax code,” states Gupta. “But by working with low-income workers in the initiative, students can see the tax code offers Earned Income Tax Credits to encourage people to work while receiving help through the tax system.”
New volunteers receive special training from Margaret Hunnicutt, a CPA who manages the initiative’s Tempe Super Site at Tempe Schools Credit Union. A self-described “tax geek”, Hunnicutt educates volunteers about the tax code and TaxWise, an IRS software program for filing tax returns electronically. Volunteers also learn to recognize different tax credits, including education and child tax credits, ensuring taxpayers receive the largest amount of refunds available to them.
Former ASU student Amanda N. Brown feels the training helped refine many of her accounting skills. “In an ASU class the focus is on concepts – you don’t learn to apply it on tax forms,” she says. “The training taught us how to ask clients for information about their personal lives in a professional way. We also learned how to use software for tax preparation – which is something else you don’t learn in class.”
Having volunteered in the initiative for three years, Brown now not only helps recruit new ASU volunteers but also advises volunteers who have questions about deductions and tax credits. Her familiarity with the tax code and software ensures the returns are filed accurately and efficiently.
Because volunteers can help taxpayers gain substantial refunds, the initiative decided to expand its efforts in 2005 by showing low-income workers how to invest their refunds into significant assets. Through a partnership with Newtown Community Development Corporation, the initiative now promotes a free Money Smarts for Homeownership workshop that shows how tax refunds can be used to increase home buying power. Participants also learn about credit basics, special loan programs, and other opportunities.
“This initiative restores individual dignity and empowers people to chart their own financial course,” states Hanley. “Many people we’ve worked with haven’t allowed themselves to dream. They believe things like financial stability and home ownership are out of their reach, but with effort, dreams can become reality. We know that when you lift one generation out of poverty, subsequent generations remain out of poverty as well.”
See if you qualify for an Earned Income Tax Credit by checking the Tempe Community Council’s web site!
Eligible taxpayers can have their taxes prepared and e-filed for free this tax season Saturdays from 9:00am – 12:00pm from January 27 – April 14, 2007 at two tax sites. The Tempe Super Site is located at Tempe Schools Credit Union, 2800 South Mill Avenue, is close to public transportation, and is handicap accessible. This site will be closed on March 17th. The Guadalupe site is located at 9050 South Avenida del Yaqui. This site will be closed on April 7th. Both sites offer Spanish translators. Please contact Diane Bennett at Ddb1125@aol.com for more information.
The Money Smarts for Homeownership class is free and open to the general public on February 22 and March 8 from 6:00-7:30pm at the Newtown Community Development Corporation, 511 West University Dr., Suite 4. Select classes will be offered in Spanish. Registration is required. Call 480-517-1589 to register. For more information, please visit the Newtown CDC web site.
The Tempe Earned Income Tax Credit and Asset Development Initiative encourages students from the School of Accountancy to volunteer as tax preparers at their sites. Volunteers receive special training and gain greater insight into the tax code. For more information, please contact Diane Bennett at Ddb1125@aol.com.
