How you can resist funding the government →
a survey of tactics of historical tax resistance campaigns →
counsel people in legal tax avoidance techniques →
Volunteer Income Tax Assistance (VITA) →
my participation in
I’ve spent the last couple of days in all-day training sessions for volunteers in San Francisco’s “Earn It!
Keep It!
Save It!” program, which is designed to help folks who might qualify for the Earned Income Tax Credit with their tax paperwork.
I’ve got another day of computer lab work and then a couple of specialty-classes next week, and then they’ll drop me into one of 14,000 Volunteer Income Tax Assistance centers.
On the one hand I’m amazed I’m putting up with this.
I’ve only got a life expectancy of seventy-some years, so two days of putting up with lectures about the intricacies and peculiarities of tax law seems about two days too many.
On the other hand, this local “Earn It!…” program has a goal of taking about two-and-a-half million dollars out of the federal government’s hands and returning it to the people it was stolen from.
That’s better than the best war tax resister has managed to do solo.
I’ve fretted in past Picket Line entries about the difficulty of reclaiming money lost to the payroll tax.
The Earned Income Tax Credit is one way of doing this.
, the feds will pay out some $38 billion in Child Tax Credits and EITC, which is a pretty good sized hunk of the $710 billion or so that they take in payroll taxes.
was my first shot at being a Volunteer Income Tax Assistant.
I worked a 9–2 shift and in that span had a chance to help put together four tax returns.
There was some clunkiness to deal with — one of the two printers failed, and we had no network to transfer files with so we had to shuttle diskettes around.
But we also had fewer clients than had signed up, which I understand is not unexpected this early in the tax season when some people don’t even have all of their W2 forms and such yet.
So we managed to get everybody filed and on their way — and things should go smoother next time now that we know what we’re doing.
The best part of the day for me was seeing the smile on the face of a woman who was getting both the child tax credit and earned income tax credit, which boosted her total refund to something like $4,200.
She was very surprised and very happy — I thought she was going to run over and hug me when I handed over her copies of the forms.
afternoon I was part of a Northern California War Tax Resistance panel conducting an introductory workshop for people interested in war tax resistance.
It is always encouraging to meet people who are determining to take this stand, and it was especially encouraging at this workshop to see people leaving more energetic and enthused and determined than when they arrived.
We’re hoping to do additional outreach in , when a protest march is scheduled to commemorate , and on when a number of groups will join up for a Tax Day protest.
The discussion continues over at the Claire Files Board, much of it about whether people are morally obligated to evade taxation (for reasons above and beyond simple self-interest), or whether on the contrary because the money is essentially being taken from you at gunpoint, only the people holding the guns bear the moral responsibility for how the money ends up getting spent.
One person asks me:
What would you think of working in an above-the-radar business that diverted money away from the public sector and into the private?
An obvious example would be a tax consultant.
Suppose you made a hundred grand showing people how to legally cut their taxes.
You could only do so by saving them far more than a hundred grand in income, you’d be diverting hundreds of thousands of dollars away from the public coffers and into private hands.
Even though you’d have to pay substantial taxes to do this efficiently wouldn’t you actually be doing more to defund government than if you simply prevented them from getting anything out of your own pocket?
I’m actually doing a version of this.
But I’m not a qualified tax professional, so rather than making a hundred grand helping people divert hundreds of grands away from the government, I’m doing something a bit more modest.
I’ve volunteered at Volunteer Income Tax Assistance sites in San Francisco to help lower-income folk fill out and submit their tax forms.
A lot of people who qualify for tax credits like the EITC don’t bother to file tax returns for various reasons (they don’t know about the credit, don’t know they qualify for it, can’t be bothered with the paperwork, etc.).
The VITA program does outreach to lower-income folk and helps them get their EITC claims.
This is a program in which everyone is working hard to take money away from the government and give it back to some of the people it was stolen from.
“Do what you love” is my motto!
It requires that I work arm in arm with people from the IRS.
But the end result of my efforts is that money is taken out of the government’s trough and handed back to people who’ve had it taken from them in the form of FICA.
It makes me feel a bit like Robin Hood.
I’m not objecting at all what you’re doing but you do know that EITC is simply a government program for forced wealth redistribution, right?
Well, I haven’t done all the math on this, so correct me if I’m wrong, but the EITC is only available to people with earned income, which is by definition people who have been paying taxes via FICA.
So at least some of the money they’re getting back via EITC is money they’ve paid in via FICA.
I don’t know if it’s possible to get back more than you paid in; maybe so.
So as far as I’m concerned, this isn’t wealth redistribution so much as the recovery of stolen property.
I worked another VITA shift.
The hours flew by as I helped people get their tax money back from the IRS (and practice my español a bit at the same time — my volunteer site is in The Mission district of San Francisco, home to many Latin American immigrants).
The harder I work the more the Sheriff of Nottingham has to keep his hands in the air as I pull coins from his purse.
The IRS thanked me for participating in their Volunteer Income Tax Assistance program.
I got two certificates of appreciation (suitable for framing), a letter from IRS kingpin Mark Everson acknowledging my “invaluable contribution to members of your community and the American tax system,” and a lapel pin with a rainbow-and-clouds motif reading “IRS Volunteers Make it Happen!”
The San Francisco VITA program managed to win back about half-a-million dollars from the government via refunds and the Earned Income Tax Credit.
was my first day this year working at the VITA program in San Francisco, helping people with lower incomes file for tax refunds and credits.
In the course of helping pull a few thousand dollars out of the U.S. treasury and give it to a handful of San Franciscans, I naturally thought tax geekery thoughts, and one question came to the fore:
Is it possible for a single person with no children, like myself, to reduce my total federal tax burden (counting income tax and FICA) to or below zero by using the (refundable) Earned Income Tax Credit?
I’ve long been curious, but I was sure that even if the answer was “yes” the income at which this would be true would be very low, and so I’d never actually tried to run the numbers until yesterday.
It turns out that the answer is no:
Earned Income
FICA paid
EITC
Sum
$1,000
$153
−$78
$75
$2,000
$306
−$155
$151
$3,000
$459
−$231
$228
$4,000
$612
−$308
$304
$5,000
$765
−$384
$381
$6,000
$918
−$399
$519
$7,000
$1,071
−$361
$710
$8,000
$1,224
−$285
$939
$9,000
$1,377
−$208
$1,169
$10,000
$1,530
−$132
$1,398
$11,000
$1,683
−$55
$1,628
$12,000
$1,836
−$0
$1,836
(This data presents a simple case where all income is earned income and assumes that the recipient has no federal income tax.)
As you can see, at no point does the earned income tax credit exceed the amount of FICA paid, so the government comes out ahead at every income level.
This is not the case, though, for people who aren’t childless.
People with one child will get more back from EITC than they paid out in FICA if they brought in about $15,000 or less ($16,000 if they’re married and filing jointly) — you take the most away from the government at an income of about $8,000. Add a second child, and you come out ahead at about $20,000 (or $21,000) and below, with the peak at about $11,000. This does not include the refundable Additional Child Tax Credit which would likely also be available to such filers:
(The vertical left axis of the chart represents the total amount of money you get from the government, or, if negative, the total amount you pay to the government, by adding your EITC refund and subtracting your FICA payments.
“0” means no children; “0J” means no children, and married filing jointly; etc. Again: this data assumes a simple case in which all income is earned income, federal income tax is zero, and no other refundable credits are applied for.)
So it is indeed possible to have the government pay you more in tax “refunds” than you paid to it in taxes.
I’ve volunteered in the VITA program on a couple of Saturday mornings this tax season.
, I have helped nine families take $15,253 back from the U.S. Treasury.
It’s a feather in my cap, Robin Hood style.
If you’d like to get involved, it’s not too late.
You can take an on-line training course from the IRS at http://www.irs.gov/app/vita/index.jsp.
The real trick may be trying to find a VITA site in your area — I don’t know of any central list of nationwide sites.
You’ll just have to Google around, or call your local United Way chapter or maybe your local IRS office.
My next VITA day is .
So I’ll miss the annual Bay Area Anarchist Bookfair and the protest-themed parade that is being held to mark the one-year anniversary of the protest-themed parade which was thrown on the one-year anniversary of the protest-themed parade that also failed to stop the Iraq War.
I recently went to a planning meeting of a local coalition that was hoping to bring the floundering local anti-war movement together to do something.
The “steering committee” itself was over a hundred members large, and still its members (scarred by previous encounters with the hammer-and-sickle crowd) nervously begged for the maximum of democratic inclusiveness.
All of these people, representing almost as many groups — labor unions, leftish and greenish third-parties, liberal peace advocates, would-be Mumia freers, and so forth — testing the limits of compromise and patience to try to come to agreement on the wording of a “Statement of Purpose” and to organize a “Mass Antiwar Conference/Rally” featuring:
Opening keynote speeches
A large assortment of workshops designed to include the broad range of groups and constituencies working against the war
A plenary opportunity to hear reports from the constituent workshops
A plenary session(s) where major decisions about the future of the coalition-in-formation and proposals for future activities would be democratically presented, debated and decided. These would include a proposed mass mobilization against the war.
A mass concluding rally with major speakers and popular antiwar political entertainment and music
Maybe I’m too impatient.
Maybe this is the sort of slow, deliberate, democratic decision-making that effective mass movements require.
To me it seems more like a bunch of well-meaning people putting in a bunch of time and effort to finally decide to all meet up and talk at each other some more in the shadow of “major speakers” and such at yet another failure rally.
The Dubya Squad went from recovering from the shock of to capitalizing on it by bringing the government and the media and the people on-board with their Iraq War agenda in .
, the anti-war movement is still holding massive meetings to draft statements of purpose and plan more meetings to consider proposals for some sort of “mass mobilization against the war”.
I’m for unengulfing that “individual dignity and power” myself.
More of these righteous rallies will not stop the war, no matter what sort of “popular antiwar political entertainment and music” is on the playbill.
The other day I imagined how much worse things would be here (and quite possibly in Iraq as well) if Kerry had won the election.
Half of the people now despairing over the war in Iraq and the U.S. torture policy would instead be making excuses to ignore it, while Kerry, true to his campaign promises, would keep blundering right along, nervously looking for opportunities to demonstrate the testicular fortitude-by-proxy of Democrats in power ties.
Even now, a sad percentage of the alleged opposition are wasting their energies on trying to depose Dubya via impeachment, as though it were in the least likely, as though it would be in the least useful.
Thanks to wood s lot for pointing me in the direction of Samuel Taylor Coleridge’s Fears in Solitude.
was my last day of VITA this year, and, for those of you keeping score at home, I helped 17 taxpayers take $20,404 back from the U.S. Treasury.
If you earned less than $38,348 , you might qualify for the Earned Income Tax Credit (EITC) — money the government gives away.
Something like a quarter of those who qualify fail to apply, which is a shame, since I’m sure they could spend the money more wisely than Congress.
To find out if you qualify, how much credit you can expect, and how to apply for it — visit irs.gov (o en español).
If you want to help other people apply for the credit, you can easily become a volunteer tax preparer for the Volunteer Income Tax Assistance (VITA) program — the IRS will train you free-of-charge and you don’t need any prior experience in tax preparation.
This will be .
I helped 17 households take back $20,404 from the U.S. Treasury.
Alas, as far as I can tell, there’s no central on-line resource that can point you to VITA volunteer opportunities in your area.
You might try googling or you can call the IRS at 1‒800‒829‒1040 to find out about nearby sites.
for started morning.
We’ve got a lot more volunteers than in years past, or at least it seems that way to me, so that it’s hard for the people we’re helping to find chairs to sit in, or even elbow-room, in the crowded community center computer room.
Each client brings in a different set of tax challenges, some of which would probably be difficult for seasoned tax professionals to wrap their minds around, but we do our best to come up with complete and accurate returns based on the information we have to work with.
I helped five people file returns, and the federal government is $2,314 poorer as a result.
Not everyone who files gets a refund, but most of the people I help are getting money back rather than paying money in.
was my second VITA day of the .
I helped another five people file their forms, and the U.S. treasury is $2,198 poorer as a result.
If you’re keeping score at home, it was five returns for $2,314, so a pretty steady pace thus far.
Another day of Robin Hoodery as a VITA volunteer.
I helped four people fill out their tax forms, including one tax resister who won’t be filing but who keeps the returns for her own files just in case the IRS comes calling with their own idea of what her forms should have looked like.
The remaining three returns were all big refunds, so the U.S. Treasury is $4,755 poorer now.
So far this year, that makes 13 returns filed and $9,267 in refunds.
.
I helped five households file their tax returns , and the U.S. Treasury is $1,074 poorer as a result.
This makes 18 returns total this year and $10,341 in refunds.
Not quite as good as , when I helped 17 households help themselves to $20,404, but not a bad bit of Robin Hoodery nonetheless.
was my first day of VITA this season.
I’m going to miss half of the days this year because I’ll be away on vacation, but today I helped six households take a total of $5,744 back from the U.S. Treasury.
was a slow day at the VITA center.
I helped three households do their tax returns and retrieve $1,832 from the U.S. Treasury.
One of these days I should write in more detail about how I feel about working with the IRS to help people file their tax returns.
As you might expect, I have conflicting feelings about it.
On the one hand, just about everybody I work with is getting a refund, and the sum of my work helps take money from the U.S. Treasury, with the money going back to families who have had it taken from them all year in the form of FICA and federal income tax withholding.
On the other hand, it requires me to collaborate in the tax filing system in an uncomfortable way.
And to some extent I participate in the IRS’s attempt to recast itself from a bullying olympian of larceny into some sort of social welfare agency — “look at us giving money to the poor!”
And as much as I may promote tax resistance and tax evasion here on The Picket Line, when I put on the hat of a VITA volunteer, I play by-the-books.
If someone wants to resist or evade taxes, that’s their decision, not one I’m going to try to make for them.
For example, one of my clients a couple of years ago — a rare example of a client who ended up owing additional taxes at the end of the year — told me that he was in the process of applying for political asylum in the U.S.
If I had played fast-and-loose with his return to try to get him a refund, it might have made me feel clever, but it might have later caused him problems with his asylum application.
It’s not my place to make other people take risks for stands I want to take.
For several years now, I’ve been volunteering with the VITA program.
In this program, the IRS trains volunteers like me — folks without any previous tax preparation experience necessarily — to help low-income people file their tax returns.
I’ve been doing this because the majority of low-income tax filers qualify for tax refunds.
Many people who qualify for the Earned Income Tax Credit (EITC), for instance, fail to claim it because they do not file or they are too confused by the instructions to claim the credit correctly.
My theory has been that by volunteering, I’ve been helping to siphon money out of the hands of Congresscritters and into the hands of people who can spend it more responsibly.
But I’ve been nagged by the worry that by doing this, I’ve been playing too close to the machine for comfort.
The Earned Income Tax Credit (EITC) provides financial assistance to low-income workers through a refundable tax credit.
The EITC, which has received strong bipartisan support , now represents the nation’s largest anti-poverty program for non-elderly individuals.
In this Note, I contend that the EITC’s historical development failed to account for (and prior scholarly analysis of its impact on labor supply decisions have ignored) the important role of informal employment in the lives of the working poor.
This Note presents the first analysis of the financial impact of government transfer and tax programs on the decision to report informal income — income that, were it reported, would be otherwise legal.
As the Note’s analysis reveals, while drastic changes in both tax and transfer programs may be necessary to provide financial incentives for many households with children to report informal income, more targeted changes to the EITC could provide strong incentives for childless informal workers to report.
The Note argues that the benefits to both individuals and society, financial and otherwise, of tax reporting by low-income individuals engaged in informal work merits reconsideration of the EITC’s overall structure and administration.
Administrative and policy innovations described in the Note are also necessary to maximize reporting compliance.
If people become motivated to leave the underground economy for the tax-aware economy in pursuit of a refundable tax credit, which is probably already the case, this may outweigh the benefits of removing money from immediate and direct government control.
I’m torn.
It’s hard to quantify the cost/benefit here.
What do you think?
