Tax aid at work: Free assistance helps combat 'wealth stripping' in community
by Jane Roberts, The Commercial Appeal
Nobody at ServiceMaster's call center thinks filing taxes is fun, but it's
a whole lot better this year than last.
United Way and the RISE Foundation are pushing to start free tax services in other workplaces to curtail the "wealth stripping" that tax time represents for the financially illiterate and hence, the whole community. Through United Way, FedEx opened a tax help site on weekends at a local Holiday Inn Select. Goldsmith's-Macy's at Southland Mall offers the service, following the lead of Belz Enterprises, which pioneered the workplace tax service last year.
According to the Brookings Institution, more than 77 percent of people who qualified for the earned income tax credit in Zip Code 38126 - the poorest in the city - paid tax preparers in excess of $359,000 in 2001 to get their checks the same day they filed. The average refund was $2,083. RISE Foundation president Beth Dixon says the fees strip wealth from a community struggling to save even 1 or 2 percent of its earnings.
More than half of ServiceMaster call center employees earn less then $35,000. If they are single parents with two or more children, they are eligible for up to $4,200 in tax credit and may not even know, said Shakitha Boone, human resources manager. "At first, people were skeptical," she said. "They were saying, 'What really will be taken from our checks?' "
They aren't now.
With electronic filing, the employees have their refunds a week after filing without having to pay the 70 percent to 700 percent subprime interest rate that private tax offices charge to float an immediate check, and filing fees that start at $75. "They are saying it was worth the wait - it was only a week - and that it was so much better than paying the money up front. They got to keep all their money," Boone said.
White's had his return for weeks. Besides paying off bills, he's looking for a better car. "This is the first time I got my taxes done for free. And I got my refund back in the same amount of time. If ServiceMaster offers it again next year, I'll do the same thing," he said.
Working with United Way and the IRS, RISE helped launch the ServiceMaster program to diminish barriers that keep people from saving money. "This seems to be one of the easiest ways to get the ball rolling," Dixon said. "We're trying to redirect people from the usual places you go where you have to pay to file to have people help for nothing," she said. "The success measures will be how many people used the service and how many will open bank accounts with the windfall," Dixon said.
She knows what's possible. Through its Saving Up program, RISE offers 2:1 savings matches to public housing residents who are saving to buy homes or other assets. The 70 current enrollees have saved $70,000, Dixon said. "With the match, it doesn't take a ton of money to make a difference," she said. "Several have saved the $5,000 maximum. "Six have purchased homes, three bought cars, and one used her savings to expand a day care business," Dixon said.