Taxing Times

Photograph by Jim West

Filing an income-tax return is rarely easy, but the very poor face an especially bewildering maze of tax credits and deductions.

In Michigan, many of the state’s poorest people can get help dealing with the complicated issues from the Volunteer Accounting Service Team of Michigan. “We’re able to help people get tax refunds that otherwise they may not have known about,” says Marshall J. Hunt, a retired Internal Revenue Service official who runs the nonprofit group’s tax-assistance program.

Most of the program’s clients earn less than $9,000 a year, and many qualify for the earned-income tax credit, a federal income-tax credit for low-income workers and their families. The state of Michigan also offers the poor a property-tax credit and a home-heating tax credit. But to get these credits, people have to know they exist and understand how to qualify for them, Mr. Hunt says.

The center’s 600 volunteers last year assisted about 7,000 people at 24 locations in Detroit or southeastern Michigan. The volunteers helped clients secure about $6.4-million in refunds last year.

Government contracts and foundation and corporate grants accounted for the bulk of the program’s $640,000 budget last year. Mr. Hunt estimates that the time donated by volunteers — many of whom are accountants or business executives who receive up to a day and a half of training on the tax regulations affecting the poor — was worth another $780,000.

Here, Sonja Cross, an employee with a nonprofit employment agency, volunteers to help Richard Lenart, a retired worker.