Rural Students Channel Hundreds of Thousands of Dollars to Their Communities

Last Updated: June 26, 2011

This article appeared in the June 2011 Rural Policy Matters.

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Rural high school students in Iberville Parris, Louisiana, and in Warren County, North Carolina captured more than half a million dollars for their communities this spring.

How did they do it?

They worked as volunteer income tax preparers for local residents.

“Actually it was fun,” says Kayla York who just graduated from East Iberville High School. “To be 15 or 16 and able to say, ‘I can do taxes.’ That’s a good thing.”

York worked all four years of high school at the tax center operated at East Iberville High and staffed by students. She says that although initially she was attracted to the work because she thought it would be fun, she quickly realized that she was getting much more out of it. “It is fun,” she says, “but it went from just being a fun thing to being able to really help out the community. It’s good to keep money in this community instead of it going to Baton Rouge,” the nearest city.

Tracy Martin teaches Business Education at East Iberville High and is the faculty sponsor for the tax center. She explains that the center is part of the Volunteer Income Tax Assistance (VITA) program, operated through the Internal Revenue Service, and it provides free income tax services to low-income, elderly, and disabled people.

“VITA is targeted primarily to people who don’t know they’re eligible for the Earned Income Tax Credit (EITC),” she explains.

Students prepare basic tax forms and complete additional forms for EITC and for things like child, education, and home mortgage credits for people who qualify for VITA assistance.

“It generally costs between $200 and $400 for a professional preparer to do a form that includes the EITC,” Martin says. “The EITC is intended to help people get ahead, but it’s one of the most expensive forms when completed by a paid preparer. So when students do free tax preparation, it helps the customer and it keeps money in the community.”

Students complete a two-day training through the IRS. “At end of the training everyone knows their certification level and what types of forms they are certified to complete,” explains Martin.

“The actual training is pretty boring,” says York. “You’ve got a really big book and you have to learn it all. But it’s a good way to learn math, and when we worked on the computer, we competed on speed and accuracy.”

Students complete the training in December and work with customers from January 15 through April 15.

“Most of the time our customers are people we already know,” says York. “I’ve never had a customer I didn’t get along with. Customers always had a good story, always came in positive. So for me it was always fun and always a learning experience.”

Tax refunds plus the money clients saved by using the tax center’s free services amounted to some $120,000 for this small community.

All together seven East Iberville students worked at the tax center this year. They completed 71 tax returns for a total of $101,354 in federal refunds. In addition, they completed state income tax forms for clients. Tax refunds plus the money clients saved by using the tax center’s free services amounted to some $120,000 for this small community. With a modest economic multiplier of two (showing the money changed hands in the community at least two times, first when earned and again via tax returns) the economic impact in the community is double.

“An understanding of something that is complex”

The opportunity to work in the tax center provides students with useful job skills. It is also a valuable opportunity for students to learn about their own communities. “This work helps create a rounded student,” says Martin. “They see how money goes in and out. It helps them better understand financial realities for their family and the community.”

York says it felt good to be able to help answer questions as her own family prepared their tax forms. She also says that the center provides valuable work experience.

“It’s good to put on your resume that you have four years experience,” York says. “You can apply to work at a professional tax preparation business because you have the certifications. That can help you earn money in college or get a job when you finish high school. This work shows that you have an understanding of something that is complex.”

Martin echoes this same observation, noting that students have to exercise a level of professionalism not usually expected from people their age. More specifically she says, “Students have to understand security and confidentially. That’s especially important in a small community.”

York also emphasizes this point: “Confidentiality is very key. When people give you their taxes you have a lot of power and information. You cannot EVER give out people’s information. You learn how important that is. You learn how to be professional.”

Building the Bond Between School and Community

“It’s easier for people to come here and to be able to get their taxes done at the school where their children actually go,” observes York. “And it helps people feel better because they are not leaving their taxes in the hands of someone they don’t know.”

Martin also notes the importance of locating the tax center in the school. “It brings people into the school. A lot of people are retired or working two jobs. They don’t have time to get involved in school activities, so this helps them get connected.”

That connection between school and community is also important to York. “By doing the tax center at school it builds a bond between students and teachers and between school and community,” she says. “Iberville is very small and rural, and we are doing things to build ourselves up. So, keeping more money in the community makes it possible to do even more. Instead of making other communities better, we can make our community better.”

Financial and Community Economic Literacy

In Warren County, North Carolina, students at Warren New Tech High School worked through the VITA tax center at the Warren Family Institute (WFI), where student involvement in tax preparation is part of a larger program of financial and community economic literacy.

“The idea was not just to talk about tax preparation, but to help young people think about taxes — where they come from and what they are used for,” explains WFI Executive Director Cathy Alston-Kearney.

WFI is a community-minded, family-centered non-profit organization that seeks to improve conditions for families and individuals and to have an impact on broader community issues. It sponsors a  variety of economic development, cultural, educational, and recreational initiatives, including a VITA tax center and several academic support and enrichment programs for K–12 students.

One of those enrichment programs is a ‘Money Club’ for middle and high school students. Alston-Kearney explains that the Money Club provides a variety of activities centered on economic literacy. “We take students on field trips and bring in speakers. We had a successful entrepreneur talk with the students about his thinking and strategy when he launched one of his businesses in our community. Another local person met with the students and talked with them about investing and investment clubs. We do online activities and career planning.”

An important point, says Alston-Kearney, is to get students thinking about their futures. “We ask them, ‘What are your dreams? How do you hope to live?’ Then they research the expected salaries for that field and run the IRS calculator on that salary.”

WFI also takes students into the community on a "trip" to identify things that were made possible by taxes.

"They saw the streets and the Department of Transportation and garbage pick-up and the Courthouse," says Alston-Kearney. "And then they thought about schools."

The trip helps students make sense of what taxes are, says Alston-Kearney. "It's a way to talk about who gets to decide how tax dollars are spent and who has to contribute to the tax system."

These economic literacy activities take place through the summer and fall. As a culminating activity, students may participate in tax training in order to work at WFI's VITA tax center.

Student Tax Preparers

This year WFI extended the opportunities it provides young people by partnering with Warren New Tech High School to provide “internships” for eight students completing a work and community service component of their high school graduation requirements. “We want to give those students something meaningful to do, something they would be motivated to engage with,” explains Alston-Kearney.

So WFI connected the interns with its VITA tax center. “They get a certification from the IRS. We tell them that when they get to college this is something they can do or initiate. We think we planted a seed,” Alston-Kearney adds.

Two of the student interns were Melissa Proctor and Wesley Huff, both of whom just graduated.

"At first I was hesitant," admits Proctor, "because taxes sound kind of boring." But she goes on to say, "Staff at Warren Institute were really friendly and I learned how to do taxes on my own on the first level. After you learn how to break down individual tax forms, it's not so bad."

It was Proctor who recruited Huff. "I was desperate for an internship," says Huff. "Melissa recommended that I consider the tax center at Warren Institute."

Huff explains that staff at WFI "took us under their wing. We worked through a big book on taxes and sat in on several sessions. The training was very hands-on."

After the interns passed the IRS certification test, they worked together in teams and with WFI tax center volunteers to complete forms for customers.

"It was set up so that everyone helped each other," says Proctor.

"I learned quite a bit about doing taxes and was actually able t help my mom," says Huff. "I would be completely blank on taxes if it weren't for this."

Proctor says that she wanted to be able to do basic taxes. "I don't want to have to pay someone else to do my taxes. This was a good experience."

The four high school students who interned at WFI and earned IRS certification prepared a presentation for a high school math class, where Alex Sutherland is the teacher. “The presentation got more students interested in the tax work,” says Sutherland. “We hope to develop a project on data with tax work and more analysis of our local economy that we can integrate with our math classes.”

The students also presented information at a community meeting at the public library. “The students did a great job,” says Alston-Kearney adding that tough questions from the community audience proved how much the students knew.

"This is something that every adult is going to have to deal with at some point," says Huff. "Regardless of whether you have someone do your taxes or you do them yourself, you need to have a general knowledge of tax preparation."

Altogether 61 students were involved in some way, including eight interns, seven Money Club students, nine summer camp students, and high school math students who administered learn-and-serve surveys to other students.

The tax center estimates that in addition to refunds, its services saved local residents nearly $20,000 in tax preparation fees, for a total of $150,000 pumped back into the local economy.

The tax center completed 90 tax returns for a total of $116,562 in federal refunds and $14,200 in state refunds. The tax center estimates that in addition to refunds, its services saved local residents nearly $20,000 in tax preparation fees, for a total of $150,000. The economic multiplier makes that at least $300,000.

“The tax center helps people save money they can utilize for their families and local activities,” says Alston-Kearney. “It continues to turn over in our community.”

She adds that local tax preparers often refer people to the tax center. “Our clients don’t meet the preferred profile for for-profit tax services, so they’re happy to refer them and we’re happy to take them.”

Transition to Adulthood

For WFI stimulating the conversation among high school students in terms of community standpoint is essential. “We supplement what they are doing in school to help them transition into adulthood,” says Alston-Kearney.

“In an economically distressed community that transition warrants concern,” she says. “Otherwise, they don’t see options in their own community. As they are making their college plans they might not think about what they could do here.”

She continues, “We want our after-school and Money Club participants to see the assets of their community and to feel a connectedness to it so they at least explore what they can do in their own community. The after-school and summer programs are an opportunity to connect to students earlier and build their awareness that they can have an impact in their community when they see something they care about.”

The student tax work also keeps the conversation going in the community. “It raises the question of how money is generated and used in an economically distressed community,” says Alston-Kearney. “We want people to recognize the amount of money that flows from our community so that they can be more intentional about the causes they care about. We want to talk about how we shift a sense of what we don’t like to a sense of what we do like for the benefit of the broader community.”

Read more from the June 2011 Rural Policy Matters.