Congresswoman Lois Capps paid a visit to campus Thursday to help a program which offers free tax help to low-income community members and groups at risk of becoming wrapped up in tax controversies. A press conference was held to broadcast the Low Income Taxpayer Clinic (LITC) services and to celebrate the latest achievement of student accountants participating in the program.
“This service is making a real difference in people’s lives,” Capps said. “This coalition provides an exemplary model of service to others.”
The California Central Coast Tax Coalition, a network of organizations that works together to refer eligible clients to the LITC, hosted the on-campus event to make the availability of its services better known in the area.
Affiliated organizations can refer qualified individuals from Santa Barbara, Ventura, Kern and Monterey counties to the LITC. Founded in 2010, the clinic is a newer program that compliments the Volunteer Income Tax Assistance (VITA) program that has provided free tax filing services on the Central Coast since 1991. Working families earning $49,000 or less per year are eligible to participate in the VITA program, which is accessible from late January to early March.
Capps was present at the press conference to acknowledge a recent success story.
The LITC represented a Spanish-speaking woman who owed more than $25,000 in back taxes, faced foreclosure on her home and had no access to professional tax preparation services or transportation. An LITC volunteer also transported her to and from San Luis Obispo. The students were able to overturn the $28,000 the woman owed in back taxes and penalties, and she ended up taking home a $700 return.
In another example, a client feared having to quit her job to afford childcare. The students’ work resulted in the tax return that allowed her to continue working and cover those costs.
These success stories though, couldn’t happen without the work of volunteers.
“The thing that really inspires me is the student involvement and volunteerism,” said Rusty Roy, executive director for the LITC and the Center for Excellence in Accounting Education.
The LITC is a Service Learning Project within the Orfalea College of Business funded by Chevron Corporation and the International Revenue Service (IRS) Tax Advocate Service. That funding allows the clinic to provide all services at no cost to its clients, a huge help for families who qualify for special tax credits but may not be able to afford a service that determines eligibility for those credits.
Under the supervision of faculty from the Orfalea College of Business, students offer pro-bono representation for clients involved in disputes with the IRS or U.S. Tax Court. Other LITC services include educating English-as-a-second-language taxpayers about their rights and responsibilities in the U.S., assisting victims of identity theft and preparing taxes for clients who did not file or did so improperly the previous year. To ensure accuracy, filings prepared by students are double-checked by certified tax professionals.
Orfalea College of Business dean Dave Christy said LITC is unique because most university-sponsored tax programs are limited to law schools. Working with the clinic helps students gain real-world experience in their field of study prior to graduation. It also meets the educational goals the Orfalea College has laid out for its students.
“The Central Coast Tax Coalition exemplifies the Orfalea College of Business’s mantra: To practice random acts of collaboration,” Capps said. “I would think Paul Orfalea himself might be pleased to see that this collaboration is fulfilling that mission.”
Connie Stewart spoke on behalf of the IRS and highlighted the importance of outreach to make more qualified people aware of the program.
“It’s in its 41st year, but you still find people out in the community that don’t know anything about VITA … do not know that there are organizations out there working together to provide this free service,” she said.
One in five eligible U.S. taxpayers that qualify for a credit never claim it. The goal for the LITC and the California Central Coast Tax Coalition is to actively reach out to low-to-moderate income taxpayers, senior citizens, individuals with disabilities and non-native English speakers. Those groups are the most likely to face tax-related issues.
“Most of those individuals can be living paycheck-to-paycheck,” Stewart said. “It makes a difference — if they don’t have to pay for that return prep, they don’t have to pay for that e-file, and they have a bank account so they don’t have to go to a check-cashing agency. They can use that money to help support their family.”
This article was written by Kristen Weilenmann.