Skip to main content

I know that you are not aware of the fact that more than 1 billion dollars designed to supplement our nation's poor are being siphoned off. When you have time, please read this report. 2005 Refund Anticipation Loan Report In addition to the fraud that I mentioned in my last post, the system is way beyond fixing.

One of my projects is to teach basic tax preparation courses to Project Grad students because everyone should know how to prepare a tax return.

It is important to me that you know the facts about how the program is implemented and the personal frustrations I face in my profession. I will not process RALs, rather I educate people and let them know that waiting 10 days sure beats taking food off of their childrens' tables.

Peace
~~~~~~~~~~~~~~~~~ Do not condemn the judgement of another because it differs from your own. You may both be wrong.
Original Post

Replies sorted oldest to newest

Sandye, the report says the system is taking an enormous amount of money from the working poor in the form of loan fees. I don't see how that relates to what you were saying earlier about how the poor have it relatively easy and get something for nothing with the EIC. It's another example of how they are being taken advantage of and not receiving all of the money set aside for their benefit because of a lack of education. This is money that has been paid into the system and is being syphoned off by unscrupulous tax preparers for the tax refund equivalent of a payday loan. I don't see where eliminating the EIC will change this practice. These people and businesses will still go after the same people who would've been eligible for the EIC (low-income filers) and get them to take out advance loans for their tax refunds. IMO, it's more effective/appropriate to go after the vultures that prey on low-income people, not cut off some of the support low-income people receive because corporations might get their grubby little hands into it. You see it differently?

I'm aware of how some tax preparation services/ tax preparers makes their money and the myriad of scams and schemes some of them use to boost their cut. But it's not exclusive to the working/non-working poor. They will continue to engage in these shady business practices with or without the presence of the EIC. That report seems to suggest that almost anyone who walks into a major tax preparation service's office is going to get scammed in one way or another between fees, interest, and passing off goods without the consumer's full understanding. I am elated that you don't engage in that kind of behavior and I agree whole-heartedly with the importance of knowing how to prepare your own tax return and know the basics of tax preparation. Low-income people who fall prey to these RALs would certainly not be such an easy target if they had that information.

I'm still down with the EIC Razz Big Grin
Frenchy - I wasn't reiterating my entire message. You specifically asked me about EIC, so I wanted to provide you with some objective information as to the abuses of the system and how it is failing. You and I agree that this is another example of how the poor are being taken advantage of, and that is why I want it eliminated.

The IRS will not go after the predators as they want all tax returns e-filed so they can close more service centers and eliminate more jobs. Paper returns require people to process them rather than computers. They are fully aware of EIC fraud, but would rather look the other way because these returns are e-filed.

The only way I would compromise my position on EIC is if the system were overhauled in a way that took the greed out of it and legitimate recipients actually got their money.

Tax returns claiming EIC should have to be mailed in along with verification of legal relationship to the child, birth certificates, school records, and proof that they provided a home and support for that child. The returns should be verified by the IRS prior to a check being issued. When eligible receipients who have e-filed or prepared their own returns without including the EIC, the IRS should recalculate the return with the EIC amount added.

Further, all FDIC national banks should be mandated to cash all federal IRS checks issued regardless of the customer's relationship to the bank to take the loan shark check cashers out of the process.

If the government is going to sponsor a multi-billion dollar program designed to help the nation's poor, then it should monitor that program to ensure that it does what it is designed to do. It should never have become another way for predators to benefit from the poverty of others.

When I spoke to the poor having it relatively easy, I was speaking to a specific group - not the poor as a whole. I know that some people have learned how to work the system and have chosen poverty as a vocation. I have worked in my field for far too long and seen and heard too much to believe otherwise.

If it makes you feel any better, I am focusing on tax reform in general to the taxation system more fair for everyone. The very wealthy have ways around paying their fair share, the very poor get additional monies, and the burden of supporting our government falls squarely on the shoulders of the middle class. Smile
quote:
You and I agree that this is another example of how the poor are being taken advantage of, and that is why I want it eliminated.


This is what I can't get with. It's not the working poor's fault, so why should they suffer? It's the equivalent of a parent saying to a child "Every week, I put your $10 allowance on the kitchen counter, but your big brother always steals $5. Instead of clamping down on your brother, I'm just going to eliminate your allowance alltogether so he can't get to it."

quote:
The IRS will not go after the predators as they want all tax returns e-filed so they can close more service centers and eliminate more jobs.


If the IRS will not go after predators, then what is the use of eliminating the EIC? These people will be no less susceptible to predators and they'll be even worse off than they were before without the EIC.

quote:
The only way I would compromise my position on EIC is if the system were overhauled in a way that took the greed out of it and legitimate recipients actually got their money.


If you look up greed in the dictionary, you'll see a picture of the IRS/Jackson Hewitt/H&R Block/etc. LOL! I'm of the opinion that you will never be able to take the greed out of any situation in a capitalist country and that getting some of the money specifically set aside for you is more beneficial than getting nothing at all.

quote:
Tax returns claiming EIC should have to be mailed in along with verification of legal relationship to the child, birth certificates, school records, and proof that they provided a home and support for that child. The returns should be verified by the IRS prior to a check being issued. When eligible receipients who have e-filed or prepared their own returns without including the EIC, the IRS should recalculate the return with the EIC amount added.


The IRS is already randomly asking for proof of those things. I prefer their method of studying and tweaking while folks can continue to get the money entitled to them.

quote:
If it makes you feel any better, I am focusing on tax reform in general to the taxation system more fair for everyone. The very wealthy have ways around paying their fair share, the very poor get additional monies, and the burden of supporting our government falls squarely on the shoulders of the middle class. Smile


I agree completely tfro
Frenchy - I know the problems and am attempting to do my best to solve them in this area. Greedy national chains would lose a lot of money (some might even close) if they could not process EIC returns, which is where most of their money comes from. Again, mailing in the returns would deny the predators the opportunity to rob the poor. Perhaps getting some money is more beneficial than getting nothing, but after of the fees, many people lose upwards of $700.00. IMHO, that is far too much. No one should have to pay that much to have their taxes prepared and their checks cashed.

Random verification of 25,000 returns per year was designed to assess the depth of the problem and develop a fix. The reality is that verification forms are cumbersome and there is a 30 day deadline to provide the IRS with a boat load of additional information. Most people can't comply with gathering and returning all of that information within that timeframe and lose the EIC money along with ability to file for EIC again for up to 10 years. IRS is real good at spin and developing pilot projects, but they don't really do much.

I believe that we agree that the nation's poor deserve to be assisted, we just don't agree on the best method for so doing. If the world would just listen to us, we could fix all of the problems! Have a great week! Smile

Add Reply

Post
×
×
×
×
Link copied to your clipboard.
×