With Tax Deadline Looming, Free Tax Preparation Options Help Families Gain Back Millions

For Immediate Release
April 4, 2007
For More Information Contact:
Ed Shelleby
(202) 662-3602

 

WASHINGTON, D.C. - With the April 17th income tax return filing deadline approaching, the Children's Defense Fund (CDF) is once again working with the Internal Revenue Service and community groups to help families learn about and get free tax filing assistance at Volunteer Income Tax Assistance (VITA) sites throughout the country.  Thousands of working families have found VITA sites to be a valuable resource in preparing their taxes.  The work of VITA sites through CDF's coalition partners resulted in more than $170 million in refunds last year alone.

"Now more than ever we need to make certain that working families get back every dollar for which they are eligible to help cover expenses like food, rent, utilities and health care so that they can stay employed and keep their families healthy," said CDF President Marian Wright Edelman.

During this tax season, millions of families will claim billions of dollars in Earned Income Tax Credit (EITC) refunds a federal tax credit designed to supplement the earnings of low- to moderate-income workers. A large percentage of these taxpayers will pay outrageous fees to have their taxes prepared and receive their refunds more quickly, often purchasing a high-interest Refund Anticipation Loan (RAL). Families across the country lost an estimated $2.9 billion because of tax preparation fees and RALs in tax year 2004.

In part to counteract the negative impacts of RALs and help families keep more of their hard-earned money, CDF once again has joined with the Internal Revenue Service and community groups throughout the United States to help low-income families learn about and prepare their taxes free of charge at VITA sites.  These sites give taxpayers more options at tax time, offering electronic filing and direct deposit of refunds, allowing taxpayers to get their money in approximately 10 days without fees.  Last year alone, VITA sites that CDF worked with helped families reclaim almost $170 million in tax refunds.

CDF's 2007 report, Keeping What They've Earned: Tax Credit for Working Families, details the effects of tax preparation costs and RALs on the national and state level. To read CDF's report on RAL effects in California, Mississippi, Ohio, South Carolina, Texas, Tennessee, and the District of Columbia or to learn more about free tax preparation services in those areas, visit the Children's Defense Fund Web site at www.childrensdefense.org/RAL.

For more information about the Children's Defense Fund, visit www.childrensdefense.org.  

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