# Presentation: 763720

## Community Based

**Coalitions**

**Internal Revenue Service Community Based Partnerships**
**Elvin Davis, IRS, SPEC (Stakeholders Partnerships, Education, and Communication), St. Louis, MO**

## AssetBuilding

**Asset****Building**

**Tax Preparation**

**Community- Based Coalitions**

**Notes:**
Thank you for the opportunity to speak to you today.

We have a common interest:  
	Helping the working poor find family economic success. 

Each of you is involved in various aspects of family economic supports.

  Education 
  Free tax preparation
  Building assets such as Individual Development Accounts 
    (otherwise known as IDA’s) and home ownership

Each of these provides a valuable opportunity alone, but they are most powerful when linked together.  

Community-based coalitions help not only individual families but entire communities by multiplying the effects of the services. 

## Slide 3

**Notes:**
Community-based coalitions often begin with a focus on getting money back into the local economy.

A starting point is providing education on the Earned Income Tax Credit (EITC).

## What is the Earned Income Tax Credit (EITC)?

**...****a federal tax benefit to help low and moderate income workers increase their financial stability.**
**Reduces taxes for workers**
**Supplements wages**
**Makes work more attractive than welfare**
**Fully refundable credit**

## Why call for EITC outreach?

**Limited education, language, and financial abilities**
**Many taxpayers qualifying for EITC do not claim it**
**Partners are uniquely qualified to reach their customers**

**Notes:**
The working poor are struggling to make ends meet – and yet millions of EITC dollars go unclaimed each year, with a disproportionate number of non-claimants located in neighborhoods of concentrated poverty.

Those having limited education, limited English-speaking ability, and limited financial skills have more difficulty with the tax system. 

Partnerships need community organizations that are trusted and that interact with the working poor on a daily basis.

## What does EITC do for working families?

**Provides a maximum credit of up to $4,716 for working families**
**Provides more than 21 million working families with average EITC refund of $2,057**

**Notes:**
The working poor are struggling to make ends meet – and yet millions of EITC dollars go unclaimed each year, with a disproportionate number of non-claimants located in neighborhoods of concentrated poverty.

Those having limited education, limited English-speaking ability, and limited financial skills have more difficulty with the tax system. 

Partnerships need community organizations that are trusted and that interact with the working poor on a daily basis.

## Why think locally about EITC?

**EITC remains the single largest federal aid program for working families.**
**EITC provides more $$ to working families than other federal programs**

**Notes:**
As traditional welfare programs continue to change, EITC is the single largest federal aid program for working families. 

The EITC Program is larger than food stamps, and Tax Assistance for Needy Families (TANF) combined.  

Over 21 million taxpayers received nearly $37 BILLION – an average of $2,662 for those with children for the 2002 tax year.  Even people without any tax liability can receive the benefit, and some families receive more than $4,000.  

## Slide 8

**Notes:**
Brookings Institute – The Earned Income Tax Credit at Age 30: An Overview

## EITC + Savings = Assets

**Notes:**
Accumulation of assets leads to a greater stake in the economy and people taking ownership of tax responsibilities.

As a result, businesses and communities can flourish as well.

## What is the Child Tax Credit?

**$1,000 for each qualifying child**
**Partially refundable **
**Some working families can receive *****BOTH***** the Child Tax Credit and the Earned Income Tax Credit in the same year.**

**Notes:**
Workers with incomes too high for the EITC can still get the Child Tax Credit.  
Explain that some immigrants may qualify for the Child Tax Credit, even if they cannot get the EITC. 

## Volunteer Income Tax Sites

**Volunteer Income Tax Sites**

**Notes:**

Organizations can work together to offer free tax return preparation assistance in their communities.

Free tax preparation gives us the opportunity to ensure that all people who are due tax credits receive them.  You can help working families with free filing of their tax returns. 

## Wide range of opportunities

**Recruit volunteers to serve at assistance sites**
**Train volunteers to prepare simple tax returns **
**Manage return preparation site in your neighborhood**

**Notes:**
You can help promote tax credits in your community by using your communication network so that more eligible people receive tax credits, bringing more dollars into your community. 

Your organization can sponsor Volunteer Income Tax Assistance (VITA) sites in your community to prepare tax returns for those who cannot prepare their own, yet cannot afford professional help. 

If your group is looking for ways to get involved in this local area, VITA is one of the best ways to get your foot in the door.
Other ways are to:
  Conduct a filing season Kick-off event
  Obtain and issue a Mayoral proclamation
  Develop or donate publicity
  Adopt a VITA site
  Provide speakers on asset building
  Sponsor a bank account program that offers matching funds.

## Community-based coalitions

**Community organizations with common interests or a shared commitment of helping working families**
**Coordinate existing activities of multiple organizations**

**Notes:**
Family economic supports are most powerful when linked together.

The key is leveraging and collaboration – the goal is helping working families.

This community has many tax assistance programs already.  Some are underused, so here is the opportunity to match your clients with the programs that can assist them on the road to financial literacy and building personal assets.

## Slide 14

**Notes:**

If low-income taxpayers can use the large refunds they receive to improve their financial well-being, they have a good start toward asset accumulation.  

Tools such as bank accounts, financial literacy training, and so on are options that you as a partner can bring to the table in the effort to help your community. 

Further, the money from refunds received in your community stays in your community.  

## Assets...

**Provide greater household stability**
**Increase community/civic involvement**
**Increase the wealth of neighboring communities**
**Enhance well-being of next generation**

**Notes:**
Development of assets is the key to development of poor households.  The pathway out of poverty is not through consumption but through savings and accumulation of assets.   When people begin to accumulate assets, their thinking and behavior changes. 

Consider the following statistics:*
  Over 10 million families are unbanked
  50% of unbanked households are headed by persons under age 45 
  33% have no or negative financial assets
  Comprises 46.9% of all children
  One out of three have no retirement savings
  78% of college students have at least one credit card

*Source of statistics:  National Summit on Economic & Financial Literacy (May 13-14, 2002 - Washington, DC) 
Building Assets (Corporation for Enterprise Development/CFED; December 2001 Publication)
Progressive Policy Institute Case Study - "Taking the Poor Into Account" written by Anne Kim for the Federal Reserve Board)

## EITC can be a gateway to self-sufficiency

**Coalitions:**
**Use EITC as gateway to affordable, accessible financial services**
**Help obtain bank accounts**
**Provide financial literacy training**
**Provide tools and opportunities      to assist  families in                  buying a home**

**Notes:**
You can provide your clients the opportunity and knowledge to use their EITC refunds to help strengthen their economic status. 

Free tax prep sites can be placed strategically to encourage families to think/act on opportunities to build assets in the long term, such as near a bank or credit union.

Families will feel more receptive to discussing finances in a place where they feel comfortable and with people they trust. 

Asset-building tools, for example, could be IDA’s (INDIVIDUAL DEVELOPMENT ACCOUNTS).  These are long term savings accounts matched by public or private funds – and used specifically for items such as a home purchase or education expenses.

## Linking the pieces...

_**Awareness**_** – reach eligible families that currently don’t claim the Credit**
_**Free Tax Prep**_** – preserve the value of the Credit**
_**Asset building**_** – introduce financial literacy into the picture**

**Notes:**
By identifying mutual interests, organizations working together have much greater access to taxpayers and can offer the important intangibles of credibility and trust.  

Most organizations see value in these tax-related initiatives.
By coordinating existing services and leveraging available resources from community members, coalitions provide thousands of dollars to families, improve their standard of living and provide them with an asset-building opportunity.

## Why is IRS interested in community-based coalitions?

**Ensure taxpayers have the correct tax liability—including credits**
**Generate a stronger outreach in communities**
**Shared mission with many local and national organizations**

**Notes:**
Our goal is to ensure that taxpayers pay the correct amount of tax they owe – no more and no less.

Congress enacted the EITC in 1975 to offset the burden of Social Security taxes on low-income taxpayers, supplement wages, and make employment more attractive than welfare.  Since then, the EITC has been changed many times, but it remains a valuable piece of tax law that should be taken advantage of by low-income taxpayers.

Information and materials coming from trusted channels, tailored to local needs, more effectively reach the low-income taxpayer.

The IRS SPEC (Stakeholder Partnerships, Education and Communication) office shares a mission with many other organizations in that it seeks to create and share value by informing, educating, and communicating with our shared customers.  

## Next Steps...

**Check out partnering opportunities on irs.gov (keyword Partner)**
**Contact IRS at **_[partner@irs.gov](mailto:partner@irs.gov)__ for partnering opportunities in your community_
**Contact your local Community Coalition**

## Questions????

**St. Louis Community Coalition:**
**Gateway EITC Community Coalition**
**Robert Gaffner, Executive Director**
**Telephone: 314-707-6512**
**E-mail: **_[robertgaffner@sbcglobal.net](mailto:robertgaffner@sbcglobal.net)_
**Web Site: gecc.us****	**