By Carolyn Bigda
Your Money staff reporter
February 11, 2007
Since 1969 the Internal Revenue Service has collaborated with community centers, colleges and other non-profit organizations to offer low-income and moderate-income families a free tax-preparation service.
Today, the Volunteer Income Tax Assistance Program, as it's called, is made up of roughly 12,000 sites nationwide (some centers are designated specifically for taxpayers over 60).
And many of the volunteers are twentysomethings who use the opportunity to learn about filing tax returns--in some cases for the first time--and to reach out to other members of their community.
At Colgate University, in Hamilton, N.Y., about 35 students volunteer each year at a site co-sponsored by the university. In 2006 the students helped file 450 returns.
"It is a great opportunity for college students because very few of them know much about the income tax process," Nicole Simpson, the program's faculty coordinator, said in an e-mail.
All volunteers must be trained and pass a certification test before working on any returns.
Added Simpson: "It also exposes our students, who come mostly from middle-income and upper-income households, to a different socioeconomic class of people."
-- Who benefits
Generally, households that earn $39,000 or less are eligible for the free assistance at a VITA site (some locations set the cutoff at $40,000). That income cap matches criteria for the Earned Income Tax Credit, a federal tax break for lower-income families.
The IRS estimates that 20 percent of people who are eligible for the credit fail to claim it.
Many households do not claim the credit because of the burden of filing a return in the first place, experts said.
"Most of our clients are not required to file income tax [returns] since they do not owe taxes," Simpson said.
At the same time, studies find that more than half of Earned Income Tax Credit recipients pay high fees at tax-preparation shops to receive an instant refund, using a product known as a refund anticipation loan.
"I encourage individuals and families to work through some of these volunteer sites or through IRS.gov" and file for free, IRS Commissioner Mark Everson said.
Many VITA sites do electronic filing, which cuts down the time to receive a refund from as much as six weeks to roughly two weeks if you select direct deposit.
-- What volunteers learn
While taxpayers receive free help at VITA sites, volunteers get to hone their tax knowledge.
"You learn the basic tax skills, but the more you volunteer, you are exposed to many different tax scenarios," said Juan Avila, 30, who has participated at a VITA site for five years on Chicago's South Side.
Avila pointed out another benefit: "The site is in a neighborhood I grew up in years ago, and the community members were so grateful," he said. "It was constant motivation to show up every weekend."
Most training concentrates on basic tax preparation using Forms 1040, 1040A, 1040EZ and 1040EZ-T. You also learn about various special tax situations, including this year's excise tax refund on long-distance phone service. Some sites offer more advanced training and services.
The Center for Economic Progress operates 36 VITA sites in Illinois and is the country's largest statewide free tax program. Of the returns filed there, 10 percent include a Schedule C, which self-employed workers use to claim business tax deductions, said David Marzahl, the center's executive director.
-- How to volunteer
Most VITA sites recruit and train volunteers from mid-December through January. Volunteers attend classes or receive training online before they take a test to receive certification. Most sites open at the end of January, and volunteers often work a total of 30 hours during the tax season.
If you missed the training this year you may still be able to volunteer to greet clients at the door.
And the Center for Economic Progress provides training throughout the year, Marzahl said.
You can find the nearest VITA site by calling the IRS at 800-829-1040.
E-mail Carolyn Bigda at email@example.com.
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