Shortly after I posted this piece about IRS cutting ties with ACORN, I received an email asking me, among other things, if I thought this was a good thing and if we should “get rid” of the VITA program altogether because of the potential for giving bad advice. I didn’t immediately respond to the email because I wanted to give it some thought. And then I thought it that it might my response be worth sharing. So here’s my take on the whole mess:
I absolutely think that the IRS decision to cut ties with ACORN’s VITA program was a good one. But not because a couple of folks gave bad tax advice – if that were the criteria, there are quite a number of tax preparers that would be out of a job. Rather, it’s because I share Commissioner Shulman’s concern that: [i]t is absolutely critical that taxpayers have trust in our Volunteer Income Tax Assistance program partners. I don’t think that’s the case right now – and that’s why stepping away was a good thing.
As to the question of whether the VITA program should be canned altogether – I couldn’t be more vehement that I think that’s a terrible idea. The implication in the email was that the population which is being served might have “complicated” tax issues that can’t be properly addressed by volunteers; the further implication was that those tax issues might be related to fraud.
I understand where that’s coming from because I saw the video and it was distressing to see that the ACORN staffers didn’t even flinch at some of the information delivered by the potential “taxpayers.” But that shouldn’t be interpreted as the norm.
A little explanation about VITA may be in order. First of all VITA, which stands for Volunteer Income Tax Assistance, offers free tax help to low- to moderate-income taxpayers. Being poor or living paycheck to paycheck isn’t a crime. Don’t be misled by a staged video (and yes, while I think the reaction was terrible, the video was clearly a set up) to believe that the only folks who would seek free tax help are those who want to commit fraud. These are people, for the most part, who want to pay their taxes. They want to be compliant.
Last year, VITA volunteers prepared 2.8 million tax returns, or about 2% of the total individual returns filed. These taxpayers were seniors, students, single parents… It well could have been you and I. They were also military – the military has a very active VITA program. Our Navy, Army, Marines, Air Force and National Guard – and their families – can get free tax assistance from volunteers who understand issues that matter to military personnel, like combat zone tax benefits, through VITA.
So the market that VITA serves is broad base that includes many, many good people. I can’t stress enough how unfair it would be to assume that those seeking free help are cheats.
As far as the character and competence of the volunteers go, I can speak to that firsthand. For years, I helped coordinate the VITA site at our local senior center. The volunteers at our center were first rate – many were actually tax attorneys, accountants and tax preparers who just wanted to give something back to the community. Others were retirees, engineers, students, bankers… you name it. Just good folks who gave up their time to help other people. Those folks received training which generally included how to prepare returns, new developments (like the rebate checks from last year) in tax law that affect taxpayers, and how to use the IRS tax prep software – there’s even a test! Additionally, there are supervisors on site to help out with more difficult questions – and hotlines to call when there are problems.
It’s a really wonderful program. Are there problems? Of course there are. Do folks occasionally screw up? Sure. Does that happen almost anywhere? Absolutely. I dare you to find one tax prep service that has never, ever made a mistake. You can’t.
I would encourage you to find out more about VITA if you have questions – and perhaps even become a volunteer. Don’t let some edited video and some bad behavior by ACORN color your impression of the more than 100,000 people who show up every tax season to try and do the right thing.
Just days after offering some “interesting” tax advice on film, ACORN was hit with a House bill that would deny federal funds to the group. Rep. Eric Cantor (R-VA) explained:
ACORN has violated serious federal laws, and today the House voted to ensure that taxpayer dollars would no longer be used to fund this corrupt organization.
The group touts itself as an advocate for low- and moderate-income people on fair wage, education and housing issues.
Earlier in the week, the Senate voted to block HUD funding to the group as part of an amendment to a larger bill. However, at least one Senator took issue with the vote: Sen. Dianne Feinstein (D-CA) felt that the vote was merely ceremonial since the attached bill didn’t include any funding for ACORN in the first place. She said, “All of this is really, I guess, to show people.”
Sen. Feinstein was clearly in the minority with respect to opposing the bill. Both her colleagues in the Senate and those in the House voted overwhelmingly in support of withholding ACORN funding.
Of course, don’t expect the ban to take effect immediately. The bills are not retroactive and would apply to future funding, likely beginning in 2010. The funding could be significant: over the last 15 years, the group has received an estimated $53 million in federal aid.
ACORN’s chief executive officer, Bertha Lewis, noted that ACORN primarily relies on funding from private, not government sources, and indicated that the organization would continue to operate. Despite such optimism, concessions, including reduced hiring, are expected. And ACORN’s woes may not stop there – the FBI has made noise that it may be considering an investigation after the “tax tape” was made public.
I tried to see what kind of response ACORN would offer to the public but their web site was down for the evening (despite repeated attempts to access it). Funding woes already?
It’s time for the Census!
According to best estimates, there are 307,216,361 people in the US as of the publishing of this blog entry. The ticker on the US Census web site was plugging along quite nicely as I was writing, so chances are, there will be a few hundred more by the time you see this post. To get the most accurate numbers, we depend on the official US Census.
The Census is taken every ten years. The first one was taken in 1790 and the next one will be in 2010. The Census is mandated by the Constitution and participation is mandatory.
Of course, mandatory participation means that, like taxes and other government programs, there are unscrupulous folks out there trying to take advantage of people. In other words, scammers are on the rise.
Be smart and remember a few things:
1, The Census Bureau will mail or deliver questionnaires to your house in March 2010.
2, An official US Census worker will have a badge, a handheld device, a Census Bureau canvas bag, and a confidentiality notice. Ask to see ID before answering any questions.
3, An official US Census worker will verify address and other demographic information. Do not give out your Social Security number, credit card or banking information – this is not needed for the Census.
4, Census workers will not contact you via email. They may call, visit or send you something in the US mail but they will not contact you via email.
5, The IRS and the US Census Bureau are separate entities. An official US Census worker will not ask you about your tax returns or other confidential tax information. Additionally, the US Census does not have access to your confidential tax information – any claims made regarding taxes owed or other inconsistencies will not be raised by a US Census worker.
To steal a line from one of my mom’s TV favorite shows, “Let’s be careful out there!”
The sky is falling! The sky is falling!
Okay, not really. But revenues are falling. And it feels just as dramatic.
As the economy slowly begins to recover, another challenge looms on the horizon: how to pay for of this “stimulus.” Cash for Clunkers? Stimulus checks for the disabled? TARP relief for banks? Extended unemployment benefits? Just where is the money coming from? If you said “taxes”, you’re only sort of right.
The money for all of these programs – as well as spending on Iraq, Afghanistan and other big budget items – is supposed to be drawn from tax revenues. There’s just one teensy problem: we don’t have much in the way of tax revenues.
If the current pace continues, tax receipts for 2009 will be almost 20% less than last year. That’s before the tax cuts expire. It is the steepest decline since 1932, during the Great Depression.
According to the AP, individual taxes, Social Security and Medicare revenues are all down from the same time last year. Even more striking? Corporate revenues are down more than 50%.
What’s particularly scary about these numbers is that, even before the $1 trillion health care bill gets passed, spending continues to rise. Despite attempts to scale back in Iraq, military spending is still up from last year. Together with other spending, increases are set to hit more than 10%. That’s right: increases in spending, decreases in revenues.
You do the math.
