CSBG IM #73 Partnership Initiative to Increase Financial Literacy and Asset Formation
n FY 2002, Clarence Carter, Director of the Office of Community Services (OCS) announced a partnership with the Internal Revenue Service (IRS) to increase earned financial resources for low-income families. As a continuation of this effort, OCS and IRS are working together to increase the capacity of the community action network to help more low-income working families obtain public benefits offered through the Federal Income Tax System.
To strengthen this initiative and to encourage more Community Action Agencies (CAA's) to use or expand their use of financial literacy and asset building strategies to help reduce poverty and empower families and individuals to become more self-sufficient, OCS plans to award an Asset Formation and Financial Service Opportunities grant this fiscal year. The grant award will be up to $75,000 a year for up to three years. Eligible applicants are State CSBG Lead Agencies, State CAA Associations, local eligible entities, and private non-profit organizations.
One of the largest IRS public benefits for low-income households is the federal Earned Income Tax Credit (EITC). The EITC is a refundable credit for families and individuals that work but earn low wages. It is a powerful work incentive and anti-poverty tool. In 2002, it delivered nearly $35 billion to lower income workers and contributed to transitioning many working families out of poverty. However, recent studies by the Government Accounting Office and others indicate that a substantial number of eligible taxpayers fail to claim this credit.
Some CAA's are already involved in EITC outreach, education and free tax preparation efforts. In urban communities, several CAA's have joined with other community and business groups to establish Community Based Partnerships. Through these partnerships, eligible families learn about EITC, receive free
assistance in filing their tax returns to claim the credit and are presented with asset accumulation strategies. In rural
areas, some CAA's routinely offer their clients free tax preparation, financial literacy and asset building strategies such as Individual Development Accounts. Attached is a list of cities with active EITC Community Based Partnerships. Please contact Anita Carwile at the telephone number below for more information on these Partnerships.
Another way in which this initiative is being strengthened is through OCS’s plans, in fiscal year 2004, to fund several related projects where State CSBG Lead Agencies and State CAA Associations partner, in collaboration with OCS and IRS, to develop and implement statewide training and technical assistance strategies for EITC outreach and free tax preparation. The IRS is committed to ensuring that staff and volunteers are trained and certified in tax preparation. Once trained, CAA's will conduct outreach and offer free tax filing services to EITC eligible individuals and families.
You will hear more about this exciting initiative during many of the upcoming meetings attended by community action network officials, including the Community Action Partnership meeting, August 26-29, in Anaheim, California and the National Association for State Community Services Programs (NASCSP) Conference, October 14—17, in Salt Lake City, Utah. You may also contact Anita Wright, Office of Community Services at (202) 690-5660 or Anita Carwile, Internal Revenue Service at (404) 338-8825 for more information.
To strengthen this initiative and to encourage more Community Action Agencies (CAA's) to use or expand their use of financial literacy and asset building strategies to help reduce poverty and empower families and individuals to become more self-sufficient, OCS plans to award an Asset Formation and Financial Service Opportunities grant this fiscal year. The grant award will be up to $75,000 a year for up to three years. Eligible applicants are State CSBG Lead Agencies, State CAA Associations, local eligible entities, and private non-profit organizations.
One of the largest IRS public benefits for low-income households is the federal Earned Income Tax Credit (EITC). The EITC is a refundable credit for families and individuals that work but earn low wages. It is a powerful work incentive and anti-poverty tool. In 2002, it delivered nearly $35 billion to lower income workers and contributed to transitioning many working families out of poverty. However, recent studies by the Government Accounting Office and others indicate that a substantial number of eligible taxpayers fail to claim this credit.
Some CAA's are already involved in EITC outreach, education and free tax preparation efforts. In urban communities, several CAA's have joined with other community and business groups to establish Community Based Partnerships. Through these partnerships, eligible families learn about EITC, receive free
assistance in filing their tax returns to claim the credit and are presented with asset accumulation strategies. In rural
areas, some CAA's routinely offer their clients free tax preparation, financial literacy and asset building strategies such as Individual Development Accounts. Attached is a list of cities with active EITC Community Based Partnerships. Please contact Anita Carwile at the telephone number below for more information on these Partnerships.
Another way in which this initiative is being strengthened is through OCS’s plans, in fiscal year 2004, to fund several related projects where State CSBG Lead Agencies and State CAA Associations partner, in collaboration with OCS and IRS, to develop and implement statewide training and technical assistance strategies for EITC outreach and free tax preparation. The IRS is committed to ensuring that staff and volunteers are trained and certified in tax preparation. Once trained, CAA's will conduct outreach and offer free tax filing services to EITC eligible individuals and families.
You will hear more about this exciting initiative during many of the upcoming meetings attended by community action network officials, including the Community Action Partnership meeting, August 26-29, in Anaheim, California and the National Association for State Community Services Programs (NASCSP) Conference, October 14—17, in Salt Lake City, Utah. You may also contact Anita Wright, Office of Community Services at (202) 690-5660 or Anita Carwile, Internal Revenue Service at (404) 338-8825 for more information.