Norton to Expose Early Refund Exploitation with Victim at Annual Tax Fair

NORTON TO EXPOSE EARLY REFUND EXPLOITATION WITH VICTIM AT ANNUAL TAX FAIR

Washington, DC - At a press conference during her tax preparation fair on Saturday, Congresswoman Eleanor Holmes Norton (D-DC) will begin a citywide effort to expose the exploitation of low income residents through exorbitantly high interest Refund Anticipation Loans (RALs). Congresswoman Norton will be joined at the press conference on Saturday, February 12, at 11:00 AM in Room 156 of the Washington Convention Center, at 801 Mount Vernon Place, NW by Tammy Edwards, an Earned Income Tax Credit (EITC) recipient, who will relate her experience with an RAL from a commercial tax preparer and Deborah Cutler-Ortiz, Director of Family Income at the Children's Defense Fund, who will reveal for the first time shocking CDF findings about D.C. EITC recipients' use of RAL's instead of cost-free alternatives available to taxpayers who want early access to their IRS refunds. Norton will discuss a congressional remedy she intends to institute. An IRS representative will discuss the cash benefits provided through the Earned Income Tax Credit.

Norton's popular 5th Annual Norton Tax Preparation and Information Fair will take place from 10 AMto 1 PMin Room 140A/B of the Convention Center. D.C. taxpayers will have their federal and D.C. tax forms filled out by IRS and D.C. government experts and volunteer lawyers, first come first served, free of charge.

This year Norton is putting special emphasis on the burgeoning use of RALs--high interest loans--which when combined with commercial tax preparation fees, cause the average taxpayer to lose about 13% of their refund or more than $200. Almost half of D.C.'s low income residents who received EITC refunds to supplement their incomes gave $5.8 million to tax preparation and RALs in order to get refunds just a few days earlier than they could have by other means without charge. At the Norton Tax Fair, residents will get early refunds at no cost within a few days after experts have used e-filings. Norton said, "I was astonished to learn that almost half of D.C. families who received the EITC for tax year 2002 needlessly gave up funds to RALs that the Congress intended them to use to supplement their low incomes." By comparison, only 8.5% of D.C. residents who did not claim the EITC received a RAL.

"I have offered free tax preparation to my constituents each year as a way of highlighting our taxation without representation," Norton said, "because, at the very least, residents shouldn't have to pay to pay the government." However, this year's tax fair will help alert residents who unwittingly are paying RALs to get rapid refunds because of failure to adequately disclose the high interest cost involved and because recipients are unaware of the variety of other free or low cost agencies endorsed by the IRS, the Children's Defense Fund and the AARP, all agencies that will be on hand at Saturday's tax fair. The Norton Tax Preparation and Information Fair will have more than 30 IRS, D.C. Office of Tax and Revenue and volunteer tax experts available to prepare federal and D.C. income tax forms free of charge for any D.C. residents who file the variety of typical 1040 forms. D.C. residents also can learn more about qualifying for the local and federal EITC, the $5,000 Federal Homebuyer Credit and many other tax credits and benefits at the Norton fair on Saturday.

http://www.norton.house.gov/issues2.cfm?id=10088