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Prosperity Center Helps Tax Credit Recipients Navigate IRS Tax Refund Delay, Warns Against Loan Products

The Prosperity Center of Frederick County helps low- to moderate-income families keep 100% of their refund and stay protected from fraud amid tax code changes

FREDERICK, Md. (January 19, 2017) — With the introduction of the Protecting Americans from Tax Hikes (PATH) Act, designed to help the Internal Revenue Service (IRS) identify and prevent identity theft and fraudulent claims, taxpayers need to be aware of a number of important changes to the tax code that are taking effect this year. Most notably, the PATH Act requires the IRS to delay issuing refunds for taxpayers claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). The government agency will begin releasing refunds after February 15, but cautions taxpayers that these refunds are not likely to start arriving in bank accounts or on debit cards until the week of February 27.
 

The Prosperity Center, a partnership between United Way of Frederick County and the Housing Authority of the City of Frederick, offers a free tax preparation service to all qualifying Frederick County families and individuals. This is one of over 12,000 Volunteer Income Tax Assistance (VITA) programs across the country that the IRS relies on to assist people with filing their taxes each year. In 2016 alone, Prosperity Center's IRS-certified volunteers connected 516 local households to tax credits, saving them approximately $77,400 in tax preparation fees and bringing back $872,351 in refunds to the community. This year, qualifying taxpayers can take advantage of this service at two locations — the Bernard W. Brown Community Center in downtown Frederick and the Hillcrest Community Center. The service will be available from February 24 through April 15. 

 

Generally, individuals and families that make less than $54,000 are eligible to have their taxes prepared and e-filed for free — without worrying about hidden fees or unexpected charges. The service is also available to persons with disabilities, the elderly, and Spanish-speaking taxpayers who need assistance with preparing their taxes. Those who make less than $64,000 can also file their taxes for free online using United Way’s MyFreeTaxes.com software; however, they are not eligible for in-person services.

 

Malcolm Furgol, director of community impact at United Way of Frederick County, noted that many VITA clients depend on their annual tax return to stay afloat financially. “Folks who benefit from this service use their returns for necessities, such as catching up on bills, paying down debt, doing repairs on their home and car, and putting some money aside for a rainy day.”

 

Furgol emphasized that the Prosperity Center focuses on helping people achieve long-term financial stability, rather than putting band-aids on complex problems. “We encourage our VITA clients to make full use of programs offered through the Prosperity Center. These range from financial literacy classes to budget coaching to investing a part of their refund towards a Prosperity Savings Account match, which can be used to pay for a home, post-secondary education, or to start a small business.”

 

Amid this year's anticipated delays, the Prosperity Center expects that some taxpayers who are experiencing difficult financial circumstances might find it necessary to look for ways to get their refunds faster Rebecca Full, VITA program manager at the Prosperity Center, urges those taxpayers to be wary of preparers promising faster refunds through expensive refund anticipation products, such as loans.

 

“We know it’s hard for many families in our community to wait on a federal refund. But the fact of the matter is that no tax preparer can get refunds faster. If it sounds too good to be true, it probably is,” said Full.

 

She noted that tax returns prepared by VITA volunteers at the Prosperity Center in 2015 earned a hundred percent accuracy rate in an audit by MD Cash Campaign, further noting that, “[The VITA] service is not only free but also of extremely high quality.”

 

The Prosperity Center urges all taxpayers to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099, and for those claiming the premium tax credit, Form 1095-A (Health Insurance Marketplace Statement). Doing so will help avoid additional refund delays and the need to file an amended return later.

 

It is important to note that the PATH Act requires that certain Individual Taxpayer Identification Numbers (ITIN) be renewed. The IRS cautions taxpayers that an ITIN renewal application could take as long as 11 weeks to process during tax filing season. Anyone filing a tax return with an expired ITIN could experience additional return processing and refund delays, as well as denial of some benefits. Considering that ITINs are used by individuals who have tax-filing obligations under U.S. law but are not eligible for a Social Security number, this will have an additional impact on non-U.S. citizens filing their taxes this year.

 

Trusted tax professionals at the Prosperity Center are available to provide helpful information and advice about the ever-changing tax code to all taxpayers. Taxpayers who will not be seeking free tax preparation assistance at our VITA site can consult these tips for choosing a return preparer and learn more about national tax professional groups on IRS.gov.

 

For more information on expert tax preparation services offered at the Prosperity Center, please visit unitedwayfrederick.org/FreeTaxPrep. To make an appointment with an IRS-certified volunteer, call 2-1-1 today. This number is free of charge.

 

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About the Prosperity Center VITA program

Volunteer tax preparers at the Prosperity Center of Frederick County go through 30-40 hours of training and are certified by the IRS. We make sure our customers get high-quality, professional service by trained volunteers who are equipped to identify tax refund opportunities. Our goal is to help as many Frederick County residents get their maximum refund as we can, and help them claim all the credits that they have earned. Since 2011, more than 90 IRS-certified preparers committed nearly 1,800 hours to preparing over 2,300 tax returns and bringing back $4.6 million in refunds to Frederick County. In addition, they saved an estimated $613,611 in tax preparation fees for low- to moderate-income families that cannot afford to pay the ever rising preparation fees. To learn more, please visit ProsperityCenter.org.

 

About United Way of Frederick County

For nearly 80 years, United Way of Frederick County (UWFC) has been fighting for families and individuals to become self-sufficient by investing in the building blocks of a better life: health, education, and financial stability. Our work focuses on helping children and youth be successful in school and achieve their potential through education; helping people obtain the tools they need to become financially stable and independent; and ensuring our neighbors in need have access to healthy, nutritious food and healthcare. To learn more about our work and how you can get involved, please visit UnitedWayFrederick.org.

 

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About 2-1-1 Maryland

2-1-1 Maryland is partnership of four agencies working together to provide simple access to health and human services information. By dialing this easy-to-remember phone number, people in need can get information on nearly 5,000 agencies and programs across the state. Specially trained specialists answer calls 24 hours a day, every day of the year, providing referrals to services and helping people problem-solve when the services they need are not available. To learn more, please visit 211md.org.

  

Contacts
For more information about the IRS Tax Delay, please contact Malcolm Furgol, director of community impact, at mfurgol@uwfrederick.org or (240) 578-4007. For general media inquiries, please contact Alli Lanham at alanham@uwfrederick.org or (301) 662-2749.