Homeless Workers Benefit from Tax Program, But Face Barriers

Tom Boland (wgcp@earthlink.net)
Wed, 18 Mar 1998 00:01:04 -0800 (PST)

FWD from National Law Center On Homelessness And Poverty (NLCHP)


For Release: Tuesday, February 17, 1998
Contact: Maria Foscarinis or Laurel Weir (202) 638-2535

Homeless workers have benefited from a federal tax credit program for
low-income workers, but many may not be getting the money they are owed
from the federal government, according a report released today. Due Credit
reports the results of a survey of how homeless workers have benefited from
the Earned Income Tax Credit program, discusses barriers homeless workers
face to getting the credit they have earned, and makes recommendations as
to what can be done to help homeless workers get the credit.

The Earned Income Tax Credit is a refundable tax credit which provides
money back to low-income workers.

Due Credit includes the results of a survey of non-profit organizations
that provided tax assistance to homeless workers in 1997. Fourteen
organizations across the country provided data for a total of 235 working
homeless persons. The credit meant a substantial increase in income for

       88 homeless families received an average EITC refund of $1286
       147 single homeless adults without dependent children received an
average refund of $132

Studies have shown that as many as 39% percent of homeless persons have
worked at some point during any given month. Yet due to low wages and the
sporadic availability of work, they do not earn enough to pay for housing.

The survey found that the homeless workers used or were planning to use the
credit to obtain housing, transportation to look for or maintain
employment, or to take other steps to improve their chances of long-term

       A homeless mother in Indiana used the credit to purchase a car,
which allowed her to obtain stable employment.
       A homeless mother in Alabama planned to use the refund to pay for a
security deposit and first month's rent on an apartment.
       A homeless father in California used the refund to purchase a vehicle.

But many homeless workers may not be getting the credit they earned. A 1990
study showed that between 1.4 million and 2.5 million eligible low-income
families were not claiming the EITC for which they qualified. Homeless
persons face several barriers to obtaining the credit:

       Lack of knowledge about the credit
       Lack of a permanent address where the IRS can send the refund to
       Difficulty in obtaining W-2's or other forms because of a lack of a
permanent address

In 1993, recognizing that homeless workers might be losing out on this
important benefit, Congress included report language in the budget bill
that was passed, urging the IRS to "explore the use of outreach programs
that target homeless individuals and that aim to educate these individuals
of the availability of the EITC."

At the press conference, the Law Center will also release a letter to the
Internal Revenue Service, calling upon the IRS to conduct outreach to
homeless persons, to expand the IRS' tax assistance program for low-income
filers to reach more persons, and to make provisions for homeless tax
filers to be able to receive their tax refunds without a permanent address.

"The EITC can provide a way out of homelessness," said Maria Foscarinis,
Executive Director of the Law Center, "but only if homeless workers know
about the credit and are able to get it. Homeless workers have earned this
money -- the IRS should help to ensure they receive the credit they are

At the press conference, the Law Center also announced that, at the Law
Center's request, four federal agencies -- the Department of Health and
Human Services, the Department of Housing and Urban Development, the
Department of Veterans' Affairs, and the Federal Emergency Management
Agency -- have agreed to begin or expand outreach efforts to inform
homeless and low-income persons about the credit.


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