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Neighborhood Tax Centers to Expand, Services To Increase

For Immediate Release
10/29/07

 Accounting Aid Society Expands in Southwest Detroit, Osborn and Brightmoor:

             More Detroit Neighborhood Centers Will Help Low-income Families 
             With Their Taxes and Provide Links to Economic Resources

DETROIT --  Low-income families in Detroit will now have more neighborhood centers where they can get their income taxes and credits prepared for free, while at the same time learn about, and sign up for, community and government services that can help them move forward financially.

Thanks to a $245,000 grant from The Skillman Foundation, Accounting Aid Society, southeast Michigan's leader in providing free tax assistance and counseling services to low-income households, will be able to expand its neighborhood tax center in southwest Detroit, open another center in the Osborn neighborhood, and extend services to the Brightmoor community.

Accounting Aid's neighborhood tax center in southwest Detroit is a partnership with The Skillman Foundation and State Rep. Steve Tobocman's office. After hosting a regular Accounting Aid free tax preparation site between 2004-06, Rep. Tobocman and Accounting Aid were able to secure Skillman Foundation funding to open the Center last November. The Center was the first to link tax preparation services with multiple asset-building opportunities such as utility payment assistance, home ownership education, job training opportunities and access to low-cost bank and credit union accounts.

 During the main January-through-April tax season, the Center served 733 families with average household incomes of $10,373 and more than 20 percent participated in asset-building resource offerings.

 A single mother who moved to southwest Detroit from New Orleans after the Katrina disaster is just one example of the extra help the Center provided this year, explained Maria Mendez, bilingual tax supervisor for Accounting Aid.

"She and her family were living with friends. They did not have their own place. By coming here, she got a good Earned Income Tax Credit back this year. She was so happy and proud of herself because she was working. And through other resources at our center she learned that she would be able to afford to move into her own home. Many low-income people don't realize they can get a house for the same as the cost of rent. It made me very happy to see that after all she had been through, she was finally getting ahead. We are making a difference."                  

Based on the success of this Center, Accounting Aid is opening an Osborn Neighborhood Tax Center in northeast Detroit. It will be housed in the Matrix Family Services Center, which offers a wide range of support services to the city's Head Start programs and their families. Modeled after the southwest Detroit Center, the new Osborn Center will be open year-round and offer Accounting Aid's regular tax season program, summer tax program, tax outreach to English Second Language households, and assistance resolving tax disputes with the IRS.

Support from The Skillman Foundation grant will also allow Accounting Aid to extend its services to the city's west side Brightmoor community. During the first year of the program, Accounting Aid will partner with the Northwest Detroit Neighborhood Development and serve participants in its homebuyers club and individual development account program.

 Combining free tax services with asset-building resources takes advantage of a unique 'moment of opportunity,' said Accounting Aid Society President Kathleen Aro.

"For thousands of low-income families making less than $40,000 a year, the annual receipt of personal income tax refunds and credits represents the largest cash infusion into the household that they will have at any given time and can be worth upwards of $4,500 or more. We've learned that this is the best time to offer our tax clients information about resources and services that can help them keep and grow their money."

 State Rep. Steve Tobocman, a tax volunteer for Accounting Aid since 2003, concurs. His office has hosted one of the agency's tax sites for the last four years and provides office space, volunteers, bilingual service and other support.

 "When you're doing someone's taxes, people are more forthcoming and willing to listen to opportunities. We see this moment of opportunity as a way to leverage them into social service activities and benefits that are available," Tobocman said.

 "We can help change their lives from one where they are constantly living from paycheck to paycheck and avoiding bill collectors, to one in which they're building wealth and becoming part of the American dream."

According to a survey of clients who were served this year at the pilot program in southwest Detroit, more than 80 percent are interested in having other resources at free tax sites. Assistance with utility bills, buying a car, buying a house, and credit solutions were the most desired programs mentioned, Aro said.

 Though the new Osborn Neighborhood Tax Center will not open until January, Aro said intensive local marketing must begin this fall and include meetings with local leaders, churches, schools, businesses and other nonprofit organizations.

"We have to combat the aggressive nature and predatory practices of many commercial tax preparers in low-income neighborhoods," Aro said. "We also need to educate families about the unnecessary use of costly refund anticipation loans. Our goal is to preserve the value of refunds and credits families receive, not diminish them."

Aro said Accounting Aid will continue to offer electronic filing and encourage the opening of financial accounts so that refunds can be directly deposited speedily and safely to clients.

Accounting Aid's tax preparers, who are trained volunteers and must undergo annual tax workshops and IRS certification, are specifically skilled at ensuring that low-income people get all of the tax refunds and tax credits due them, something that too many commercial tax preparers don't do, Aro said.

"The most important credits for low-income families are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC)  -- two federally-funded credits that can be worth up to $4,500 or more per family per year. Yet according to the IRS, almost one in four families who are eligible for these credits don't file for them," she said.

"In Detroit alone, 16,000 to 26,000 EITC-eligible residents fail to claim the credit, leaving behind between $17 million and $29 million in EITC each year."

Accounting Aid provides 80 percent of the free Volunteer Income Tax Assistance (VITA) tax preparations services in Detroit. The agency operated 16 Detroit tax sites this year, and filed free income tax returns for 6,339 low-income Detroit households, benefiting more than 13,000 residents and returning $6.1 million in ''new money" into the city's economy through federal and state refund dollars.

In all, Accounting Aid Society -- marking its 35th year of service -- operated 31 free tax sites this year throughout Wayne, Oakland, Macomb and Livingston counties, serving more than 8,300 low-income families and returning more than $8.7 million in tax refunds and credits. The average refund was $1,048. These seasonal tax sites were established in libraries, community centers and social service agencies.

 Aro said Accounting Aid Society is volunteer driven, and depends on more than 600 volunteers each tax season. Those interested in becoming tax volunteers can sign up now for training to be held in January. 

Accounting Aid is a Michigan nonprofit corporation and a member agency of United Way for Southeastern Michigan. It receives funding from businesses, government agencies and foundations.

Created in 1960, The Skillman Foundation is a private philanthropy whose chief aim is to help develop good schools and good neighborhoods for children. Though grants are made throughout Southeast Michigan, most grants are directed at six Detroit neighborhoods  -- Southwest Detroit (Vernor and Chadsey/Condon), Brightmoor, Osborn, Central and Cody/Rouge  -- and toward innovative and successful schools throughout the city of Detroit. 

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