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IRS says earned income tax credit too often unclaimed(Press-Enterprise, The (Riverside, CA) (KRT) Via Thomson Dialog NewsEdge) Feb. 2--Taxpayers are leaving money they deserve on the table, and the Internal Revenue Service is making a push to make sure everyone knows about the earned income tax credit. This tax advantage provides a refundable credit of up to $4,536 for eligible families. The tax credit's claimants are also eligible for free tax preparation services at one of 12,000 volunteer sites nationwide, and they can also link to Free File through IRS.gov if they wish to prepare their own returns. While 22 million taxpayers last year claimed more than $41 billion under the earned income tax credit, the IRS says, nearly a quarter of those eligible failed to take it. IRS spokesman Raphael Tulino said it's unclear how much cash Inland taxpayers could claim but didn't, but it's probably more than $10 million. For that reason, the IRS declared Thursday "EITC Awareness Day." Several Inland tax preparers said that people who are eligible but don't take the credit are typically taxpayers who file their own taxes, or whose income is low enough that they aren't required to file tax returns. One must file a return to get the credit. Sheila Kruis, owner of Fielding's Tax Service in Norco, says she works with her clients to determine their eligibility for the earned income tax credit and other credits. "I try to give my clients whatever they're entitled to," she said. Many, she said, know whether they're eligible when they come in. She said the IRS has also sent letters to taxpayers after they've filed, informing them that the may be eligible. Lois Hannah, an enrolled agent with Tax Associates in Riverside said self-filers and non filers are probably the vast majority of those eligible for the credit who miss out. She also said that some younger taxpayers may not be aware of the credit, until they read about it in the newspaper or know someone who's gotten a large refund through the credit. Connie Brook, owner of Connie's Tax Service in Hemet, said that she also goes over earned income tax credit eligibility with clients. She said people are generally aware of the credit's availability. The earned income tax credit was created in 1975, in part to offset the burden of Social Security taxes and to serve as a work incentive. The amount of the credit is generally determined by income and family size. Jeffry Cole, an enrolled agent and certified financial planner with TeamTax in Temecula, said he doesn't have a lot of clients who get the earned income tax credit, but a business owner who has a bad year could be eligible for at least that year. "It's a complex thing to figure out, when you've got someone trying to do their own taxes," he said. IRS: Ceiling for credit is $4,536 For free tax help: --The state franchise tax board: www.ftb.ca.gov --AARP: www.aarp.org . --Call the Internal Revenue Service at 1-800-829-1040 To see more of The Press-Enterprise, or to subscribe to the newspaper, go to http://www.PE.com. Copyright (c) 2007, The Press-Enterprise, Riverside, Calif. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |