Community Action Project, Tulsa County

Community Action Project of Tulsa County (CAP) is a comprehensive anti-poverty agency that has provided supportive services to low-income families in the Tulsa area for more than 30 years. Its free tax preparation service is now one of the largest in the country.

Why VITA?

CAP began its current tax program in 1995 after realizing the Earned Income Tax Credit (EITC) could provide the largest single sum of money many low-income families would receive each year, and that the money provided a golden opportunity for low-income families to purchase a home. Many of CAP’s clients found the rules governing income taxes and tax credits too complex. In response, CAP organized volunteers, trained through the IRS Volunteers Income Tax Assistance (VITA) program, to assist clients with filing tax returns.

That first year, volunteers helped 1,200 taxpayers, mostly existing CAP clients, file their tax returns at 1 tax site. The next year, CAP partnered with the Bank of Oklahoma to open a second site at the bank’s location on the north side, where many low-income families reside. This partnership provided stability and the number of clients served doubled. With more partners in the third year, the program mushroomed, even with little marketing. Pam Smith from CAP’s Human Resources Department initially spent time coordinating the VITA volunteers, before moving into a full-time position as EITC and Volunteer Manager in 2001.

Focus on Families

CAP became the Tulsa area’s designated Head Start grantee in 1998 and, as a result, began to orient its services around young children and families. This resulted in changes in the tax program, giving priority to families who qualify for and can claim the EITC and Child Tax Credit over single filers. For some years, CAP’s VITA program had used an appointment service to schedule taxpayers. CAP implemented a change in their voice recording, asking taxpayers who call for an appointment if they have dependents. Those who do are scheduled for appointments with tax preparers early in the season, while single taxpayers without dependents are scheduled for March. As a result, the program has increased the number of EITC families served and decreased the number of single filers. Since making this strategic change, the first week of March (when the single filers begin) is now the third-busiest week of the filing season.

CAP also supports a growing multi-cultural community with a large percentage of Spanish speaking clients. CAP is a certified IRS acceptance agent and helps clients with controversy cases, along with filing Individual Taxpayer Identification Numbers (ITINs) for over 1,400 clients and educating them about taxpayer rights and responsibilities.

Refund Splitting Pilot

CAP was one of the first programs to work with Doorway to Dreams (D2D Fund) to experiment with allowing taxpayers to split their refund between two or more bank accounts. The pilot demonstrated that clients would split their refunds, given the opportunity and asked the right questions. A follow-up study showed that clients go to the tax site with few ideas about how to use their refunds other than paying bills, and therefore are open to savings opportunities.

When refund splitting was made universally available in 2007, 153 of the nationwide total of 1,400 taxpayers who split their refunds were clients of CAP. Smith attributes their success to knowing how to ask the client if they want to split their refund—and their tax preparers being used to the option.

Savings Bond Pilot

In 2007, CAP participated in a pilot program to see if taxpayers would purchase savings bonds with part of their refunds. It offered savings bonds at a site where clients have a wider range of income assets. With D2D offering to contribute $10 if taxpayers paid $40 in this pilot project, 134 clients bought 216 savings bonds, many for children or grandchildren. Of those participants, CAP found that clients had an average refund of $3,000 and invested an average of $121 in bonds. The minimum priced bond was $50 and the maximum they could purchase was $250, with no limit on the number of bonds per client.

Check Cashing

Many low-income people do not have bank accounts but rely on fee-based neighborhood check cashers for financial transactions. CAP’s partner, the Bank of Oklahoma, allows CAP clients to cash their tax refund checks for only $2, even if they have not opened a bank account at the bank, thereby saving them untold dollars in check cashing fees over the years.

Free College Tuition

Through the Oklahoma Higher Learning Application Process (OHLAP), the state of Oklahoma offers free college tuition at a state-operated college or university for children from families earning $50,000 or less. Families have to sign up while children are in 8th, 9th or 10th grades, and students have to achieve a grade point average of 2.5 throughout high school, stay out of trouble and have good attendance. While many agencies recruit families for the OHLAP program from public schools, CAP helped 275 tax program families take this step to secure their children’s future.

Intake Data

CAP has developed an innovative approach to collecting intake data at their tax sites. Most programs use the IRS-designed intake form to collect information from taxpayers about their income, filing status and special circumstances. CAP has developed a web-based intake software that uses an interview and a logic tree to not only collect data but also determine filing status. Next year, the application will also determine dependency status. Filing status and dependency status are key factors in determining a taxpayer’s correct tax return and refund, and taxpayers often do not understand the rules regulating them. Initially, Smith had intake staff interview the clients and complete the form, but she shifted that task to the tax preparer in the second year after finding the preparer is in the best position to ensure that client answers are correct. The preparer then helps process an accurate return and can provide counseling on how clients can improve their refunds for next year.

An additional benefit, the computerized intake sheet provides constant daily totals of returns prepared. With real-time data on the number of clients at each site, Smith can can adjust staffing as needed. “If only they we could merge the intake data with tax data from TaxWise, we would have a perfect product,” she says.

Successful 2007

According to Smith, the highlight of last season was the season itself! CAP went into it with several setbacks. They lost 1 tax site from a partner that needed to lease out the space used for the site to a business. They had to find a new provider for their appointment service, and they lost some funding. During a training week in January, the entire city was shut down by ice. Still, even with 2 fewer sites, the program actually prepared more tax returns with less capacity.

CAP’s program is one of the largest of its kind in the country, and Smith says the model has been replicated in more than 75 cities throughout the U.S.

During the January-April 2007 tax filing season, CAP served 14,672 taxpayers and returned more than $23 million in refunds to working families—among them were 5,600 clients who received federal EITC refunds of $9 million and almost another half million dollars in state EITC. Using the Oklahoma economic multiplier of just over 2, the estimated overall economic impact in Tulsa exceeded $47 million.The average client household annual income was $17,614 and the average refund per client was $1,415, which represented approximately 10% of the client’s household income.

Market Penetration

According to a study by the Brookings Institution, CAP is serving over 13.5% of low-income EITC eligible taxpayers in the city of Tulsa and almost 10% in the county. Nationally, most programs serve 5-10% of the low-income market, so CAP is exceptional.

Recognition

CAP's EITC program has gained national recognition. The IRS has recognized CAP's efforts as among the most innovative and successful in the country and is helping other communities replicate Tulsa's EITC Program. CAP's program was featured in an issue of the Annie E. Casey Foundation magazine, ''AdvoCasey,'' as a model program benefiting kids and families. The Annie E. Casey Foundation also funded the creation of a video highlighting CAP's EITC program.

Volunteers

Volunteers are key to the program's success. A nucleus of 80 volunteers have worked with the program for 5-7 years—some of them since the 1995. While she makes recruitment presentations each year at various organizations, Smith says volunteers are often the best recruiters, bringing in friends and co-workers. As a result, she can usually count on 150 trained volunteers to staff her tax sites each year.

With so many returning volunteers, Smith offers them their own tier of training, beginning in November. Using last season’s TaxWise, the returning volunteers work with a set of IRS-approved taxpayer problems specific to low-income families. Most volunteers are grateful for this gradual re-introduction to the tax law issues and software.

Quality

The quality of tax preparation at VITA sites has been an issue since the Treasury Inspector General for Taxpayer Administration (TIGTA) reported in 2005 that only 33% of VITA tax returns were completed accurately. After failing a TIGTA audit in the past, Smith placed more emphasis on quality. When CAP’s VITA site was audited 3 times by TIGTA during the 2007 filing season, they passed each time. Smith attributes part of the improvement to the computerized intake system; no longer do they accept the client’s statement of their filing status, but they determine it through the intake interview.

Dick Jackson(caption) A retired aerospace manufacturing employee with no accounting background, Dick Jackson was a founding volunteer at the VITA sites, continually providing suggestions for improvement to the program over the years. Jackson volunteers more than 400 hours each season. Ed Weikel with client

(caption)Ed Weikel came to CAP through a church-centered volunteer recruitment effort shortly before he was due for retirement. He enjoyed the program so much that he took his full 4-week vacation to work at the tax site every day in February. Now retired, he comes back every year and works tirelessly.