Free Income Tax Filings $86 Million

Campaign for Working Families

announces results of free income tax filings

$86 million brought to low-income families

The demise of “pay stub” loans

PHILADELPHIA, PA, May 16, 2007- The results are in, with hundreds of local volunteers bringing $86 million in refunds to low-wage workers over five tax seasons, announced The Campaign for Working Families. At a recent celebration, the Campaign also heralded the demise of a predatory loan they had rallied against earlier in the year, called a “pay stub” loan.

Campaign Executive Director Jean Hunt reports “in addition to bringing an astounding $86 million in refunds to Philadelphians, we have completed 55,000 tax returns over the past five years. Because our customers do not pay fees, interest or extra charges, we estimate we have also saved them $14 million since we first opened our tax sites in 2003.”

In 2007 alone, the Campaign prepared and e-filed 11,147 tax returns and brought $20.3 million in state and federal refunds to working families through the operation of 17 free tax sites, located in neighborhoods throughout Philadelphia.

The free tax sites were staffed by 386 IRS-certified volunteers, recruited by United Way of Southeastern Pennsylvania. “The Campaign succeeds because so many people from the Philadelphia region volunteer their time as IRS-certified tax preparers so that their neighbors can receive every tax refund dollar they have earned," said Hunt.

Also in 2007, the Campaign went undercover to expose a new rip-off called “pay stub” lending, offered by the nation’s largest tax preparers. Pay stub loans promise an easy advance on your tax refund, without having to wait for your W-2. Targeted to low-income families that qualify for the federal Earned Income Tax Credit, pay stub loans trap consumers into having to take out bigger, more expensive loans later on. In January and February, the Campaign went undercover to expose pay stub loans and worked with advocates nationwide to challenge the predatory offering.

According to Business Week (May 21, 2007), in April, the U.S. Department of Justice alleged in suits filed against Jackson Hewitt that the “company defrauded the Treasury by seeking undeserved refunds . . . Jackson Hewitt announced it would stop selling one type of refund anticipation loan, known as a preseason loan.”

The Campaign for Working Families is a partnership that promotes the efforts of working families to move up the economic ladder. The Campaign operates free tax sites throughout Philadelphia (prepare and e-file federal and state income tax returns), and connects individuals to the federal Earned Income Tax Credit (EITC), other tax credits, public benefits, and asset-building resources.

Managed by the Greater Philadelphia Urban Affairs Coalition (GPUAC), Campaign for Working Families partners are: Ceiba, City of Philadelphia: Free Library and Mayor's Office of Consumer Affairs, Community Legal Services, Consumer Credit Counseling Services of the Delaware Valley, District 1199c, Greater Philadelphia Coalition Against Hunger, Greater Philadelphia Urban Affairs Coalition, Internal Revenue Service, PathWays PA, Philadelphia Citizens for Children and Youth, Philadelphia Council AFL-CIO, Philadelphia County Assistance Office, Philadelphia Workforce Development Corporation, The Reinvestment Fund, Transitional Work Corporation, and United Way of Southeastern Pennsylvania.