Tax prep conglomerate H&R Block and the Association of Community Organizations for Reform Now have teamed up in a partnership to help boost awareness of the Earned Income Tax Credit and to reduce filing costs for low-income taxpayers.
Block and Acorn - a community organization of 175,000 low- and moderate-income families - plan to canvass some 65 cities in a door-to-door joint effort, which includes flyers and educational videos designed for low-income filers who may be eligible for the EITC.
The Block-Acorn effort would also highlight the costs and speed factors associated with refund options, and also work to hasten the elimination of costly fees connected with refund anticipation loans. Toward that end, Block has begun to provide information to taxpayers about options to receive quicker tax refunds. It has accelerated a three-year program - begun last tax season - to phase out the systems administration fee that accompanies such bank products as refund anticipation checks and refund anticipation loans.
Ironically, the recent Block-Acorn alliance comes exactly one year after Acorn held nationwide rallies at Block offices protesting what they perceived were aggressive sales of the company's RALs, which they claim unfairly targeted lower-income taxpayers.
RALs are short-term bank loans based on the amount of an anticipated federal tax refund. With a RAL agreement, filers usually receive money within one or two days, versus an eight-to-15-day refund via e-filing. Block has been ensnared in a number of lawsuits in recent years over RALs, which critics complain charge high interest.
With regard to the EITC, Acorn estimated last year that up to 7 million families failed to sign up for the tax credit despite being eligible, resulting in a potential aggregate refund loss of $12 billion.
"So many families in our neighborhoods are struggling to make ends meet, and the Earned Income Tax Credit can be a lifeline for many of these families," said Acorn national president Maude Hurd. "Acorn is excited to work with H&R Block to make sure that more people not only understand they are eligible for this tax credit, but actually claim it and know they can get their refunds quickly without paying for a refund loan or other bank product."
In addition, members of Acorn are scheduled to enroll in H&R Block's income tax course.
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