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The Montgomery Community Action Agency because i wanted to advocate for people who were in my position and speak to the issues that we will affect them and knowing firsthand on the planning side and knowing how much of a benefit this would be to people and being able to contribute to the services provided. I promise i will get to the rest of the panel. You have experience. Tell about that. I went to a private tax preparer that i found in the yellow pages. I feel like i was taken advantage of. I was not sure about what deductions i should have, whether i should itemize or take the blanket deduction and not be aware of what your options are, your rights are. I am in need of money and will do whatever i can. I i did not get what i was supposed to get on my return luckily we have the trusted sites that are available so that people are not taken advantage of. Thank you. Doctor kathryn edin, the experience of laurieanne sayles and her experience with the eitc is this consistent with your experience . People love the symbolic act of filing their taxes with other taxpayers whether it is at a website or not. But it is meaningful. The temptation to get whatever it is called now. We cannot do a rapid refund, but h r block has found a way around that. It is real the thing that i really heard laurieanne sayles say was, the relief of parental stress the ways in which the eitc can help your child feel like an ordinary american kid are very consistent, and it is not like the ballet lessons is an extravagant parental expenditure but the symbolism of those expenditures is powerful both powerful, both for a parent and child. What we want is for all people to feel a part of america and participate. What we heard in the field was, this program and the way we administer this program has those benefits. Along those lines i could be wrong about this but wasnt theyre research about eitc beneficiaries or participants, i should say say, be more likely to vote, for example. Did i read that . When you deliver benefits to people in a way that respects theyre dignity and treats them as citizens they are more likely to vote. There theyre are all kinds of spillover effects above and beyond the Health Effects that have been documented, documented, for example. Researchers ought to get out their and vote for citizen benefits. Thank you. And chyeching huang, their have been research into the longterm benefits particularly as they relate to children. Research just keeps coming. It is showing that the eitc definitely the case for children and families. For example, these links between increased eitc and improved paternal and infant health. And then on to schooling their is research that shows that high eitc links to better performance. And now their is research that shows that their is a boost in college enrollment. That is because of the program. It makes it more affordable. One step further starting to see starting to see Research Children who grow up with increased benefits through eitc are more likely to work more and learn more. All the way through we see impacts. Going back these impacts cant happen if people dont claim the credit they are owed. And that is exactly where i was going, but that research is pretty astounding. Barbara i want to bring you in here. Can you tell me kind of look at the supply and demand and to the extent you are comfortable. I have to warn you all i am not rational about the importance of what it is that we do. My husband warned me not to get too emotional but theyre are numbers, data research, and then their are people. For 25 years i have been helping these people. Of. The research and data reflects what i have been seeing for 25 years. There is not enough of supply of people. The number the number of people that the combined Committee Tax aid, various counties and jurisdictions have there own counties that they have run. Aarp has theyre own program, program, but you put those programs together and you dont have enough people to be able to do a return for every person who is entitled to claim credit which means you have people going to preparers who charge them too much money, or worse;; the upside of Electronic Filing and turbotax and programs like that is it can make it easier and faster and so forth. Forth. The downside is that anyone with enough money to buy a copy of turbotax can go out and say hey say hey, i can do your tax return for you. People who dont know anything and people who will deliberately create fraudulent returns that the taxpayer he or herself does not even know about. A volunteer with our program this year has been in the irs Enforcement Division prosecuting criminal fraud and one of the significant things he is doing is prosecuting cases against preparers who basically prepare parallel returns. So as far as the taxpayer knows they are filing the return and getting the refund they are due and then their is a return file that is fake with a much bigger refund. And that goes goes into the preparers account. As far as the client goes as far as the client knows they are doing the right thing. Again, as the senator mentioned, there is not a lot of funding and so forth. The demand is huge. The supply is narrow. Congress needs to take a better look at how to both find the preparation effort and also i will throw in here quickly and then stopped talking, that the irs tried to create rules to regulate preparers who can do it require them to go through training, get a certification which of course, was knocked down. Full disclosure i also worked worked at the irs for four years. Since the irs has been told they dont have the power to regulate preparers congress has to do it. My clients come in after being taken advantage of by these people and zero refunds that they were not entitled to but did not no they were not entitled to and keep paying off that debt. Again, i am not rational about it but their does need to be some degree of regulation so that you can go to the committee and say to these people do not have your return done unless someone can show you they have the certification. I would love to pick up on that. Please do. [applause] part of the conversation we had earlier. The data does back up your feeling. Vita the highest accuracy which is partially because vita volunteers have to go through certification. In contrast unenrolled preparers who dont have to go through certification have the highest error rates this regulation is important if i am hearing correctly it does not sound like right now their is a lot of political will in terms of expanding the supply and number of vita sites. The funding for low income tax at best it is stagnant. My organization applies for grants every year in order to Fund Operations and their is just not enough to fund the sites. You can find a legal clinic that can help taxpayers once they have gotten into trouble but if you find the people who are doing the returns, then they are right in the number of times a taxpayer gets into trouble we will be less. But the funding i dont have the numbers. At best it is stagnant and has not kept up with demand. Thank you. And you. And i want to stay with the politics for a while. Senator brown mentioned eitc expended under bipartisan president s, both parties sort of a feelgood story. I think we have a little bit of a potential a potential storm on the horizon. Chyeching huang, if you can tell us about the fdic expansion set to expire in 2016 and why we need to Pay Attention to that. Unless policymakers act at the end of 2173 key provisions of the eitc will expire which means millions of families will face a loss of some or all of there credit and push more than 16 million people, working families into poverty. This is a big deal. Again, going back to the story what that means if you think about a single mother with two children working fulltime at minimum wage earning 14,500 she would face a loss of her entire child credit losing 1,000 725. That that is an important amount to people who are struggling to get by. Making those critical provisions permanent a critical priority for this congress. News in the house that their is an effort to make some expiring tax breaks permanent, including tax breaks for corporations. Without getting into the merits of those they think that if anything gets made permanent these credits for working families must go with them. Does anyone have anything to add to that . That number, 14,500, they must 500 they must think how can anyone live on that. Meticulous analysis of family budgets, you we will not be surprised to here that they cannot. In this country we think if you work and play by the rules you ought to be able to live. No one is living high off the hard on the eitc. They are barely scraping by. Responsible economic behavior but all of us would applaud the fact that almost 1 in five is put away and saved which is quite amazing it is easy to lose sight of how tough family economic situations are and how unstable the labor market is. And the value in building a personal safety net is critical. People ought to be rewarded for playing by the rules and this is how we we will make that happen in america. Thank you. You. Senator brown alluded to an effort to expand eitc. Teeeleven, i wonder if you could tell us a little bit more about why that is critical. At the moment childless adults and noncustodial parents. Under age 25 completely ineligible. Those who are eligible for a small amount. They would get a eitc of 25. In part because of eitc childless workers, low income childless workers tax the group deeper into poverty. Making more eligible eligible for eitc and boosting it so that it is an amount that is salient holds strong promise of increasing employment so i think that is an important policy priority. The question about congressional interest this has bipartisan interest. That is great. Anyone else have anything to say . In terms of my clients it is hard for me to explain to my clients why they do not get anything. You dont want to encourage them to go have children but it is hard because they are working hard and even if they get the maximum credit it is less than 500 and that is on an income of five or 6,000. It is small. You can say from a policy perspective you can say you want to make sure people who have Young Children need more support, but that does not mean if youre childless and working hard that you yourself dont need support. I have to say when i was right right out of law school making a small amount of money and filling out my tax return and saw this and income thing and thought that is true and then said you need to have a child and i thought i could not get it. It. I guess it is an unappreciated population. The rub is the hardest for noncustodial parents, many of whom we need desperately to bring into the labor market. Imagine market. Imagine if we could see the gain in noncustodial parents like we have for single mothers it would change the lives of millions of americans. And then noncustodial parents who are working and paying Child Support and they feel the unfairness of the fact they are not eligible for the tax credit quite keenly. And laurieanne sayles, i wanted to ask you, too in regard with your work to Community Action in montgomery if you are seeing with regard to the childless workers, noncustodial parents, if you are seeing some of theyre struggles. We definitely are. One of our initiatives we were at the forefront of last year was asking for the earned income tax credit. We do see a disparity with people who do not have children. We in montgomery county, they match your earned income tax credit at the county level. It was increased to 60 percent, but now it is back. So montgomery county, one of the wealthiest counties they understand the extra benefit to help a family. And that is a whole other issue, the county level. We have plenty of time for audience questions. In a recent interview you did with tax credits for working families there was a great quote. You said, and getting and getting to no the Families Research interviews it we will help you think more intelligently about policy whether you are conservative or liberal. Can you talk about that . Like many at this table when we conducted this research all of the people trained as tax preparers. Can preparers. Can i say that test is hard . [laughter] as it should be. It took me quite a long time to pass it. We manned to vita sites in boston, 11 in dorchester and one in east boston if you want to know you know, how poor people think, what theyre lives are like their like, there is no better way than to follow the money. It is a poignant time i think, sitting across the desk from a family or individual filing taxes. It is an intimate moment where you Learn Private things and it is a chance for you to build on that feeling that people so value that they are citizens and taxpayers. You can give a lot in that interaction but you we will come away with an understanding which we will transform you and help you you no. When you act you have the voices of real people in the back of your mind which of course, is always better than acting without that. Thank you. If i can say one more thing about the Actual Experience of working with a client. They have to tell you very personal things because you need to know about theyre children and where they live and what they are doing and if they have lost there job. So you so you have to deal with them on a personal level. I had a client years ago and if i start crying, dont be upset. Upset. This woman had been through a horrendous situation, been evicted from her apartment. In a homeless shelter with her children. Her sister turk and the children but would not take her. Anyway she got a job at cvs working at one hour photo. This is a job that some of us might not value. It was the most wonderful thing in this womans life. She came in and said how blessed she was to have this job and it was great. And the people she worked with were fabulous. I did the return. The Previous Year whoever did her return did not figure out about that credit i i tell her she is going to get this refund like three something thousand dollars. She threw her arms around her and said, you are giving me my children back. Okay. And you go oh my god. She was going was going to have money where she could put down the Security Deposit on that apartment. It was not that she could not pay the rent, but she did not have the money to get a place to live with her children. When someone when someone says to you, you are giving me my children back you carry that with you forever. It is that profound an impact that this tax credit can make. You make. You know it is not puppies and babies. It is profound. I forgot a question i wanted to ask earlier on really actually for you, professor brown. It is much professor kathryn edin, this is much more than an income program. As i said 40 40 percent of the refund is typically spend toward mobility purposes. 70 percent of the total is set aside for savings and much of the rest goes to Human Capitol Development and durable goods. Their are measurable improvements in peoples lives that are laborsaving. A standalone refrigerator you can shop more efficiently and buy in bulk. It makes the daytoday schedule more doable if you are able to buy and maintain a used vehicle. Measurable improvements in peoples lives. Maybe what is the most meaningful is the sense that you can get ahead you can be Something Different from what you are now that you can enter the middle class. People not only plant all year for how to spend theyre eitc making detailed calculations. They have multiyear plans for how they we will save save, clean up there credit, make a down payment on a home, moved to a quieter place with safer streets and better schools. These narratives drive them all year long and keep them going. This is not just an income support but really not only a Wealth Creation device but a whole different idea of what life can be like in the future. Thank you. Before i i turned to the audience, this is a freebie. All right. Audience. We think about school. We think of tax time as. [inaudible] how does this moment move beyond just a refund and help with the aspirations for the future . One of the reasons it is so exciting more deeply part of this movement, so many of the vita volunteers have become adamant asset building advocates and want to link other services to what is happening because they see the potential. I love the ideas about thinking about the other services and products partnerships that we can use. One of the things we started doing it when you come in not just a list of your personal information information, but also it links to social services. Providing an atmosphere you weed out what people want at that time. It ties to a lot. We partner with various organizations for credit counseling. They go meet with a credit counselor. So being able to five the credit counseling worked well. A couple of them are hear today. Linking the opportunities and critics. Taking the opportunity to devote develop your income to savings and income. In the packet you have a flyer. A lot about the tax moment. Dignity and that is really incumbent upon the vita sites to treat clients with as much dignity as possible. You have heavy competition from h r block and the deliverers of taxes because they no how to treat people and make them feel valuable. Part of the reason people go to h r block rather than at vita site is because it feels good to be their. From how the office looks to how they are treated, we need to make sure it is profoundly attached to how they are treated. Second, people want to clean up there credit so that they can move ahead. People dont no how to. We cover this in detail in the book. So credit counseling and help with understanding how they should prioritize debt and what counts toward credit score would be valuable. Okay. [inaudible question] to what degree to the vita sites allow people to register to vote . We dont have that with our sites, but it is a fabulous idea. [laughter] one of our sites is dedicated to providing opportunities to register voters, open accounts. It is definitely a priority to link that service. It is hard for me to see the whole room. Can someone help me if i am not seeing people in the back. Yes. Thanks. My question is for professor kathryn edin. How we can help low income taxpayers become more aware of tax preparation either in person, like at the vita site or online . It is hard to compete with those dancing tax men and women on the corner. It is interesting, there has been a longterm and vigorous campaign. The abcd Community Organization which has offices and storefronts in almost every block and neighborhood free tax preparation. It has become institutionalized in a way that gets underneath your fingers. However you have this powerful competition from h r block and all of its competitors and the possibility of getting a refund early. If we can figure out how to make work pay. I love the idea of allowing people to withdraw 500 midyear to avoid a financial cascade. We need to think more carefully about ways to not let debt be the driver of which door you enter when tax refunds become available. Right here. [inaudible question] online preparation service, and i am wondering if you could talk about that from a supply and demand volunteer side and an inclusion standpoint, the increase in Online Services is something that we are seeing for taxpayers at all levels. Well, with bb t and other banks that have offered free tax preparation online the problem you run into familiar with the tax codes and things you can claim on taxes you may incur some hurdles and things that you could have received. It is free, but free, but are you really getting everything that you could . And to that point,. , too, we have tried at various times. Our biggest site, selfdirected tax return preparation, we have people theyre to help the taxpayers, ask questions. This is the very population that you really dont want to necessarily make doityourself online tax preparation available to because it is hard, and their are things that are subtle in terms of understanding what certain terms mean which have a specific meaning in the tax code, which is different from the colloquial meaning. I struggle with that as a return prep Service Provider we are trying out doing something with a can be selfdirected and we can supervise how they do the return. We will see how that goes but i do have concerns where they dont end up getting the maximum benefit out of that approach. [inaudible question] one of the things you mentioned is that anyone can buy turbotax. If anyone is interested in the tax fraud issue, yesterday their was a a forum at the museum sponsored by the atlantic. Into it was one of the sponsors. Sponsors. Just so you know, our ceo was one of the opening speakers. His. Of view was for all of us in this battle, to make sure that we do not put the solution on the backs of the lowest income it is not right and is not going to get us out of this problem, but problem, but i encourage you to go online and look at that discussion. Also senator clover chart was talking as well. When Andrea Levere opened up she was talking about hope. We have been downloading turbotax through the free file. We have had the best success partnering with vita. My emotions are coming out. Out. Anyone eligible for a product can do free fed and free state. Free file is not about into it but Different Software companies. Have you looked. My favorite story is from harlem. We had a taxpayer using turbotax. Angrier and angrier and angrier. And we said, sir, if you dont like it, dont do it. He said no. I have had someone else do my taxes for years. Is years. Is this all their is to it . [laughter] people are afraid to do there own taxes. The idea that you could get audited, zero money break the law is very intimidating to people a lot of the reason they go to private tax preparer is that they trust them to get it right which makes that laurieanne sayles story all the more tragic. We must make sure those folks are regulated. Fear is very much a factor. A lot of our folks what we saw is they went to the one person in theyre network who mastered turbotax and pay 30 to that person to help them. This informal coaching is going on. We might as well capitalize on it by coaching the coaches. I i do think that their is just having returned from the mississippi delta where people are offering products to theyre neighbors and engaging in some practices that barbara was talking about you know the opportunity for exploitation is ripe. We must be alert to it and coached the coaches. The gentleman. Es. The red tie. This is a question for doctor kathryn edin. Can you get any sense that folks understood where they were . Maybe i earned too much this year. A sense of that affected work incentives . We devoted considerable time to asking these questions, and it was interesting. There is quite a moral discourse about this. They know it it is attached to work and you have to have kids to get it and they think and this is true in the phase in range the more you work the more you get. The people who are at the sweet spot generally benefit from working more and see it as a motivation to work more hours and not less. They do not no how much they we will get every year. They have they have a sense of what it might be. But the surprise cautions them against freespending and i think that is a good thing. You are still going to figure out a way to get what your kids need but not be as susceptible to temptations to spend because you are not really sure. Better than christmas. Better than christmas. A sense of joy. That is a nice moment. On balance they understand the right thing. To the extent their on the downward slope sometimes they are surprised in not a good way. When you. Out the total amount of money they have in theyre household is more but you got the better job and earned 3,000 more dollars than it really does not matter whether they got the credit or not. They get that idea that it is better to be able to earn more. And so none of them have the thing they can tell. They do not have that idea. They understand that if they earn more it is appropriate that people who are less should be helped the way that they were when they are less. [inaudible question] opportunities for exploitation. I know our vita teamworks hard to help people with an injured spouse situation how they help people write themselves from identity theft. In terms of writing yourself from identity theft, we cant help with that other than if you have had your identity stolen the irs will assign you a special filing number. We have we have had clients come in with those so that they can file. The more valuable service we provide is the attempt to file the child, the dueling attempt situation where we are able to help the custodial parent who is worried about having to get it filed because the other parent they no we will file the child. We have had situations where we have to sit down with them and say bring your paperwork. You can prove this child lives with you but you we will have to go and do that. I think we have time for one or two more questions. The question of research having a higher accuracy rate than others, certified or others in the private sector or individuals . If you could expand on that. The report looked at various different types of preparers. The vita had the highest accuracy rate overall. The lowest was for unenrolled preparers that were not associated with the national chains. Those are the types you are thinking about when you think about someone who goes and gets a copy and has not gone through an internal certification process. [inaudible question] last question. Thank you great event. Thank you all. So many things. I get excited about tax time for me one of of the things that has come out of this the importance of vita the fraudulent things you have talked about. The one other thing is the feeforservice model and helping consumers prospective vita clients as i like to call them helping them understand how much it we will cost them and seeing that it is taking away from there overall family budget. Have any of you thought about showcasing the cost that they have, which is zero versus what your competitors are charging . Secondly the research if their is anything that you could lift up in regards to if you saw any change in behavior as far as vita clients versus others who understood they were getting the full refund. Thank you. The issue of being able to. Out to them that walking out the door with your refund means you are walking out with 400 less than you would be walking out with one week from now is something we try always to get that message across but is sometimes difficult because they might very well need that money right that night because they need to go pay there payday loan. It is a challenging situation for us to be able to make that Value Proposition when they are really up against it. What we do is try to get out there and start doing returns as early as we possibly can. If they have direct deposit they can get it in sometimes one week or less. It is a challenging thing and i would like to figure out a a way to help migrate more people to vita sites but then we need to have the vita sites to migrate to. Well, a good benefit of that is the flexible hours. You can come after work which is an incentive to work around schedules. Another incentive is direct deposit. You you could get it within 72 hours. You can buy savings bonds. Their are incentives. I think we do a good job of advertising benefits and do an annual report after each session to show how much money was the average return and things of that nature. It is completely true that when you get that check from h r block what you pay h r block is invisible to you. You cannot figure out what they are supposed to tell you your fee will actually be. A great role would be to make the invisible visible advertise with great vigor the savings you can get from a vita. You have to confront the fear of irs. Peace of mind of this audit protection feature that some of these tax preparers offer is valuable to people because they are afraid of getting in trouble with the law. Third, what the vita can do that for profit tax preparers can do is mary taxpreparation services with other services. He can figure out which debt to prioritize and the vita site becomes the place where you are treated with dignity then you can compete in ways that clearly make it beneficial for folks to go to the vita site rather than the for profit. The presiding officer the democratic leader. Mr. Reid its really good to be back. I appreciate the kind remarks of the republican leader. Senator mcconnell and his lovely wife elaine have been wonderful to landra and i over the years and i appreciate their words of support. I want to express my appreciation appreciation to my colleagues who have been so kind and thoughtful during my recovery time. The presiding officer i received your phone call, that was very warm and i very much appreciate it. As the United States senators, our work is measured by what were able to accomplish for the middle class or able to accomplish for the american people. Now, ive watched very closely and been in touch as we all knew and read the stories with what has gone on here the last month. Im sorry to say that we spent one month on a bill calling for the importation of oil from a foreign country and then importing that oil outside of america. Im glad that we were able to work it out so we had a number of amendments and that was really good and felt very comfortable with that. I wish we could have done some more but im satisfied with what we were able to do and, of course, now we await the action of the president as we should be doing. Work of this senate is based upon should be based upon what were able to do for the middle class. We are a constructive minority and we proved that the last month. And to show how constructive we are, take, for example, tria, terrorism insurance. Its so important up and down the Las Vegas Strip times square, every plait place in america that was important to Business Community but yet this thing was held up the last congress by my republican colleagues to show our good faith we were able to pass that in a matter of hours and thats the way it should be. We have, were going to vote now tomorrow on the clay hunt bill. Thats an important piece of legislation. Ive worked hard on Suicide Prevention and we need to keep working on that. Each year in america 32,000 americans kill themselves. That doesnt take into consideration the Car Accidents that are not reported properly, hunting accidents and we have about 24 veterans who kill themselves every day in america. But yet again we believe thats important for america and because of that, were going to pass that in a matter of hours tomorrow. Thats the way it should be. Now, theres an issue that is now before this body and its an important issue. All we need to look at is whats going on around the world. Terrorism attack in australia. Terrorism attack in canada. France scores of people killed. Belgium, we saw what happened there. Terrorism is for real. Senator can mccaskill said it the best way ive seen it described, the republicans are more afraid of the dreamers than they are of isis. By the way isis said theyre coming our way. Why should we be dealing with issues that have nothing to do with Homeland Security, nothing to do with Homeland Security . We should pass a Homeland Security bill with no Strings Attached to it. Thats where were going to wind up. If the republican majority in the house and the senate want to have a c. R. For Homeland Security a continuing resolution, that would cut about a billion dollars, a billion dollars out of that budget for Homeland Security. Homeland security was developed after 9 11. It was a bipartisan piece of legislation that consolidated 22 different government agencies. We need to get that done and sent to the president

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