Maryland Bar Bulletin
Publications : Bar Bulletin : January 2006

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 PRO BONO Profile:  

"Securing Tax Refunds for Families in Need"
By Lisa Muscara

Have you realized that it is "that time of year" again, checking the mail each day for your W-2? Struggling through filing tax returns can be a difficult task for anyone, but especially for our neighbors of limited means. Fortunately, in Baltimore, there is some relief for low- and moderate-income taxpayers to get assistance completing and filing their returns. As part of the Baltimore CASH Campaign – Creating Assets, Savings and Hope – Maryland Volunteer Lawyer's Service (MVLS) runs several clinics throughout the tax season, implemented to help low-income clients prepare and file their tax returns, focusing on "making work pay" by leveraging the tax code as a gateway to financial services for working families.

This month, MVLS is focused on growing their ranks of trained attorneys to provide pro bono tax services to low-income clients. As part of the CASH Campaign network, volunteers are required to attend an eight-hour training and, upon successful completion of the training and requisite test, volunteers earn their certification as IRS VITA Volunteers. New volunteers interested in serving as preparers can choose from eight trainings MVLS has scheduled during January, to learn the skills needed to complete tax returns. These eight-hour trainings cover basic tax law and the TaxWise software used at the clinic.

Not only do volunteers prepare and file tax returns, but they are trained to knowledgeably screen clients to determine eligibility for Earned Income Tax Credit (EITC). EITC is an important anti-poverty and work-incentive program run by the federal government and select state governments. The EITC is targeted to individuals and especially families who earn low to moderate wages. If a worker qualifies, the EITC will lower or eliminate any taxes owed. If a worker is not obligated to pay any taxes or if the credit is larger than any taxes owed, the worker will receive a cash payment ("refund") from the Internal Revenue Service (IRS) after filing a tax return. According to Rob Bader, MVLS's Director of Tax Clinic, "the Earned Income Tax Credit can be up to over $4,000 for some families, which is a great benefit to them".

The impact of these clinics is profound. Last year, MVLS Tax Clinic volunteers prepared returns for 342 families, 249 of which were households comprised of single women with children. During that period, the MVLS clinics alone helped clients obtain $1,086,959 of federal refunds and credits, and the average federal refund for those who received one was $1,877. Across the city, last year's CASH Campaign efforts resulted in 4,196 tax returns prepared, yielding $6,184,166 in federal refunds, $1,710,701 in state refunds and total federal EITC of $3,202,930.

Not only do these tax clinic sites help low- and moderate-income workers receive the refunds to which they are entitled, the free clinics save hundreds of dollars in fees that their clients would otherwise pay to have their tax returns completed and filed. Working from 13 sites during the 2004-2005 period, the CASH Campaign saved clients an estimated $630,000 in fees.

Oftentimes, this client population not only pays inflated fees to have their taxes prepared, but regularly relies upon refund anticipation loans (RALs). These are loans available from professional tax preparers, usually in the amount of the anticipated tax refund, less interest and fees. While immediate cash is a tempting prospect, these loans are outrageously expensive, with fees commonly ranging from $40 to $100, which typically translates into annual percentage rates of 70 percent to 500 percent! For tax returns filed electronically, as those at the clinics are, with refunds deposited directly into clients' bank accounts, most taxpayers will receive their refund in less than 10 days – a win-win situation for clients. Using CASH Campaign sites, like the MVLS tax clinic, they can avoid fees for filing and have their refunds deposited to their accounts quickly.

If you are interested in learning more about how to help low- and moderate-income families secure the tax refunds to which they are entitled, please contact Rob Bader, Director of the MVLS Tax Clinic, at (410) 539-6800, ext. 226, or e-mail

Lisa Muscara is the former Director of Volunteer Services for the Pro Bono Resource Center of Maryland.

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Publications : Bar Bulletin: January 2006

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