Tax Preparation Program A Success On The Crow Creek Reservation

Apr. 20, 2010

Tax Preparation Program A Success On The Crow Creek Reservation

(Fort Thompson, SD) April 19, 2009 – In its first year, a free tax preparation service provided by The Harvest Initiative, Inc. on the Crow Creek Sioux Indian Reservation achieved excellent results. Over 85 households took advantage of the service and saved nearly $18,000 in fees and charges that would have been lost to for-profit tax preparers.

While The Harvest Initiative was a registered IRS Volunteer Income Tax Assistance (VITA) site, it was also equipped as the first such site in South Dakota to offer low-cost banking products for clients, many of whom did not previously have a bank account. Over 25% of the tax filers who had their taxes prepared by The Harvest Initiative took advantage of the free account opening and avoided the long delay in waiting for a paper check to be mailed and the check cashing fees they would have otherwise been forced to pay.

One of the main goals of the IRS VITA program is to maximize access to the Earned Income Tax Credit by low-income tax filers. Clients of The Harvest Initiative’s services collectively amassed over $72,000 in Earned Income Credits. The Earned Income Credits represented nearly 45% of the total IRS refunds collected throughout the tax season.

The number of households utilizing the free tax preparation service was somewhat surprising to organizers who cited the high percentage of Reservation residents who typically access high-cost refund anticipation loans offered through for-profit tax preparers.

“Honestly, we were amazed at the willingness of our clients to wait the 8 to 15 days for their refund deposit in exchange for avoiding the high refund loan fees,” said Jason Yates, Director of Operations and Strategy for The Harvest Initiative. “It really raises the question about what tactics are used to push refund loan products when people visit the mainstream tax preparers.”

The Harvest Initiative partnered with several other organizations in order to make the tax preparation program such a success. The Law Firm of Faegre & Benson provided financial support, the Boys & Girls Club of Three Districts in Fort Thompson donated use of its facilities, Ashworth Road Baptist Church in West Des Moines, Iowa sent a group of volunteer tax preparers, and Advent Financial Systems provided the low cost banking products.

Plans are already underway to insure that the success of this year’s tax preparation program can be repeated and improved in 2011.

For more information about The Harvest Initiative, please visit its website at www.harvestinitiative.org.

The Harvest Initiative, Inc. was organized in the spring of 2008 to invest locally in native grown ideas and support socially responsible business development to move the Crow Creek Sioux Reservation toward a commercially viable, self-sustaining economic environment.