WASHINGTON - As the time for preparing federal taxes begins, the Internal
Revenue Service is ready to take, but it also wants to give back - a
little. In an informational campaign aimed at Indian country, the federal
tax service is trying to reach poor families with the news they might have
some money coming.
Millions of rebate dollars for low-income families are going unclaimed each
year, the IRS is saying. Federal agents are asking tribal governments to
help notify the working poor on and off reservations that they might be
eligible for the Earned Income Tax Credit.
This program was conceived in the early '70s as a way to end family breakup
and welfare dependency, and it could provide refunds ranging from $390 to
$4,300, depending on the amount of family earned income and number of
qualified children. The "negative income tax", as it was called when first
advocated by social scientists, and later by U.S. Senator Daniel Patrick
Moynihan, could actually provide a bigger refund check than a family paid
in taxes or refunds to people who paid no taxes at all.
Christie Jacobs, head of the IRS Office of Indian Tribal Governments, told
Indian Country Today that new rules would make the credit more widely
available to reservation families. In particular, she said, it was expanded
last year to cover dependent children who weren't necessarily
birth-children, such as grandchildren being raised by grandparents.
Although Jacobs said the person filing the return would still have to "jump
through some hoops," proving the child was a dependent, the credit could be
a real boon to extended Native families.
Families claiming the credit would have to file an income tax return, even
if they owed no taxes, and the IRS is urging tribal leaders to provide help
through publicizing IRS-sponsored Volunteer Income Tax Assistance sites.
The First Nations Development Institute (www.firstnations.org) and the
Annie E. Casey Foundation (www.aecf.org) are also providing free material
Jacobs also advised that reservation families might need some patience
while waiting for the check. She said that some reservation conditions
triggered an IRS computer program designed to kick out returns for closer
scrutiny. The anti-fraud program, for instance, picked up returns with
large number of dependent children or Post Office Box return addresses,
both common on reservations. She said her efforts to make the computer
program more understanding of Natives had been unavailing.
There is no question, though, that the reservation should be a prime target
of this anti-poverty program. In spite of a decade of economic improvement,
a recent Harvard study said that reservation residents experience "deep
poverty," incomes less than 75 percent of the poverty line, at more than
twice the U.S. rate. Even though the "deep poverty" rate was dropping for
reservations, as of the 2000 Census it still stood at 25 percent for
non-gaming tribes (including Navajo) and 19 percent for gaming tribes,
compared to a constant 9 percent for the country as a whole.