With over 73,000 pages and thousands of annual revisions, the US tax code is one of the most complicated in the world. With so many intricacies and nuances, filing tax returns can be a bit of an intimidating venture.
As April 15 looms closer and closer, tax preparatory services heighten their advertising - luring customers in by planting Statue of Liberty characters on cross-streets and bellowing about how they can get you a bigger refund than their competitors.
However, these companies have long been accused of predatory behavior and taking advantage of low-income Americans due to the lack of oversight in the tax preparation industry.
According to the National Society of Accountants, the average cost of a 1040 with a state return and itemized deductions is $273.
The Prosperity Centers in West Palm Beach and Belle Glade work in conjunction with the Internal Revenue Service to ensure that Americans have access to free tax preparation services without being defrauded.
“We save Palm Beach County money,” said financial coach and housing counselor Ludie Celucien. “We help them get all of the credit they qualify for. We do e-file and they get their money within 20 days or less. We are a 12 month service, not just for the tax season. If you have any problems or you get audited, you can come back to us and we can fix it for you. For free.”
The elderly, Americans with disabilities, limited English speakers and those who have an annual income of less than $60,000 a year qualifies for VITA – the Volunteer Income Tax Assistant program.
Funded by the United Way, VITA has helped millions of Americans with tax preparation since its inception in 1971 and last year, Community Partners helped Palm Beach County residents prepare 1,236 returns and get back a total of $2,749,618.
Rita Gonzalez is a big fan of the service. She’s been using the VITA Program at the Prosperity Center for several years and has no intention of going anywhere else to get her taxes filed.
“I used to get my taxes done at H&R Block and a friend told me about this program,” she said. “I like the way Miss Cynthia (Harris) works with me. She explains everything, she’s very patient and I’ve never had any issues with getting my return.”
With predatory tax preparation services popping up like mushrooms in low-income neighborhoods, the services offered by VITA are not only valuable but also necessary in regards to consumer protection.
“There are predatory practices that target low-to-moderate income individuals,” said Maryann Garrett, homeownership director for Community Partners. “With the VITA program, these individuals can rest assured that their tax return is prepared by certified and ethical tax preparers and at no cost to the individual.”
“It’s totally unfair,” affirmed VITA volunteer Hugh Rose. “We get a lot of clients with fraudulent tax returns. They get their taxes done at these places, the IRS contacts them and then, we help them navigate through the process without charge.”
Deneise Reid discovered the VITA program after being scammed by a tax preparation service.
“I had a problem with my taxes so I went to the IRS and they told me about VITA,” she said. “They (the preparation service) did my taxes wrong and I had to do everything all over again.”
Not only did the tax preparation service overcharge Deneise for filing, but they also confused her identity with her daughter’s.
“There are people who think they can override the system and do whatever they want to do,” Deneise said. “There should be penalties charged against these thieves!”
Walking into the Prosperity Center was a relief.
“They were patient and kind,” she said. “That’s the good thing about them. They listen to you and they try to help.”
Deneise Reid isn’t the only one to experience issues with other tax services.
“We had a couple come in last week who were charged $500 for their taxes by another tax preparation service,” said Ludie. “The service messed it all up and put their 1099 under household income instead of business income. She went back to them and tried to get them to fix it but they wanted to charge her another $500 for that. So, she got our information from the IRS, came to us and we were able to help them out.”
People depend on their tax refunds. For many, it’s the one time of year they’ll receive a lump sum payment which can go towards making home repairs, paying for orthodontia or paying off debt.
“Tax refunds help people advance in their lives and the VITA program certainly helps with that,” Hugh said.
Working together, the VITA program and the Prosperity Center are Changing the Odds for Palm Beach County residents, ensuring their financial well-being and helping to sustain the hope for a brighter, more stable life.