Last year, there were 145 VITA (Volunteer Income Tax Assistance) sites that served Native American communities, according to the IRS. These sites were sponsored by tribal governments, tribal housing authorities, Native and non-Native nonprofit organizations, senior centers, credit unions, tribal colleges and urban Indian centers. First Nations Development Institute (First Nations) has also supported some of these Native VITA sites with grants, technical assistance and training.
VITA sites are a useful tool for providing free tax preparation services to low- to moderate-income people and helping them claim a range of valuable tax credits, including the Earned Income Tax Credit (EITC). In addition, they can help individuals avoid high fees for tax preparation services and also avoid being persuaded to take on high-cost loans against their tax refunds.
During the 2013 tax season these sites filed a total of 48,413 returns, facilitated $70 million in refunds and helped people claim approximately $26 million in EITCs, which is money that comes back to or stays in Native communities and benefits the entire community. Further, it is estimated that these 145 sites saved Native American filers $7.3 million in preparation fees alone, based on an estimate of $150 in fees per filer.
Data from several of First Nations’ recent Native VITA site grantees revealed the tremendous positive impact these programs can have in Native communities. A report about this can be found on the First Nations Knowledge Center at this link: http://firstnations.org/knowledge-center/financial-education.
Wigamig Executive Director Fern Orie
One of First Nations’ VITA grantees is the Wigamig Owners Loan Fund, Inc. (www.wigamig.org/) in Lac du Flambeau, Wisconsin. It serves the Lac du Flambeau Band of Lake Superior Chippewa along with all Wisconsin Indian reservations. Wigamig offered up this anecdote as just one example of a tremendous success story stemming from its VITA effort:
“We had a client who had gone to a paid preparer for the past couple of years,” said Fern Orie, Wigamig executive director. “By Wigamig preparing the return and asking the appropriate interview questions, we discovered the family has an adult disabled son who they have not been claiming as a dependent on their tax return. In reviewing their previous returns from the paid preparer, we noted that they should file amended returns to claim their son for the prior years and recoup their appropriate refund and tax credits. In review and preparation of these amended returns, we discovered two errors totaling over $2,000. With these corrections and amending the returns, the clients will be receiving nearly $12,000 back from the IRS from two of their amended returns. This does not include a third year of an amended return that Wigamig is still processing. By educating clients, we are increasing their self-sufficiency.”
“VITA programs play an important role in providing affordable, appropriate financial services for Native families. We are proud to support VITA sites and their community partners that continue to bring resources into their local communities,” said Sarah Dewees, senior director of research, policy and asset-building programs at First Nations.
