Editorial
Published: Tuesday, February 10, 2009 at 3:30 a.m.
Last Modified: Monday, February 9, 2009 at 11:27 p.m.
In three short years a handful of students at theUniversityofAlabamainvolved in ImpactAlabamahave gone from helping fewer than 100 low and moderate income families prepare their income tax forms for free to spreading their services to 12 campuses across Alabama and involving more than 400 students in the project.
And now, after an undercover operation worthy of 60 Minutes, the students have documented the lax and sometimes unethical practices of many commercial tax preparation agencies and have prepared legislation for the Alabama Legislature to consider. It would require tax preparers to have proper training and pass certification exams.
The legislation has already been introduced in the current legislative session by a bipartisan group of House and Senate members and has the support of Alabama Revenue Commission Tim Russell and the Alabama Society of Certified Public Accountants, which would also like to see all people who prepare tax returns for other people tested and qualified.
This year ImpactAlabama, founded by Stephen Black, the director of the UA Center for Ethics and Social Responsibility, expects to help prepare returns for more than 4,000 families with children, most of whom qualify for Earned Income Tax Credit program because they make less than $42,000 a year. The student program has, in fact, become the largest provider inAlabamafor such families of limited resources.
Those are also the families most preyed upon by the kind of seasonal, fly-by- night commercial tax preparation services that become ubiquitous this time of year. The average tax refund for such families is around $2,300 and in their undercover work, in which students posed as members of families eligible for the EITC, the sleuths of Impact Alabama found many instances of poorly-trained tax preparers charging as much as $400 for filling out simple forms in less than half an hour and then offering “instant loans” at exorbitant rates based on expected returns.
Even more disturbingly, students involved in the investigation found tax preparers in six Alabama cities and at 13 businesses making numerous mistakes in their work and in many cases even willing to commit fraud by claiming dependents for an alleged divorced family member who did not have legal custody of those dependents.
“In some of these places they take people off the street, give them a crash course of about 30 minutes and sit them at a desk as a tax preparer,” Alex Flachsbart, a UA senior and part of the project, said last week. “They are people who have never taken an accounting course in their life, and they are sent out there to find as big a refund and charge as much as they can.”
Students participating in ImpactAlabamaget course credit for their work, but more importantly, they advance the core goal of the UA ethics center: to send better citizens out in the world.
