Changing lives, one tax return at a time

Online accounting student Anna Liles (above) was one of 86 UAB students who helped working families in the Birmingham-area secure more than $2.6 million in tax refunds and save more than $500,000 in fees in spring 2021. Bright young people looking to make a difference do not necessarily think of accounting first. But that is exactly what has happened during the past several years in the Collat School of Business, where instructor Eddie Nabors teaches a course called Taxation and the Working Poor, which also is an Honors College seminar course called Poverty and Human Capability.

“We started the class in 2017 with a dozen students in the Honors College and another dozen or so in the business school,” Nabors said. “Fast forward to spring 2021 and we had 86 students, including 20-something students from our online accounting program all over the country.”

Students sign up for Nabors’s class to learn about the challenges facing the working poor. Nabors explains the unexpected consequences of the Welfare Reform Act of 1996, “which has taken most of the cash out of the system,” he said. “You get allowances for housing and food, but you don’t have cash for a car to get to work or to pay the electric bill.” Nabors reveals the tricks that buy-here-pay-here car lots use to re-sell the same vehicles to multiple credit-strapped buyers each year. “We talk about the causes, about the cycle of generational poverty and mass incarceration and the barriers in our ‘land of opportunity,’” Nabors said. “If you break family income into quintiles, people who are born into the bottom 20% only have a 40% chance of moving up to the next quintile in their lifetime, and only a 7% chance of making it into the top 20%.”

But Nabors’s students also come because they have heard that he will show them how to make a difference in people’s lives through paperwork. Specifically, taxes. And though COVID changed the routine — as it has changed every routine — Nabors and his students found a way to make it happen regardless.

‘Largest check they will get all year’

“This is a service-learning course, and our service is volunteering with a community partner called Impact America to help working families who qualify for the Earned Income Tax Credit fill out their tax returns,” Nabors said. The EITC, first enacted in 1975 during the administration of Gerald Ford, “has been around ever since and it has been increased in every presidency, Democrat or Republican,” he explained. “It is the largest anti-poverty program in the country. It provides income to a lot of working poor families to lift them above the poverty level.”

Sitting down with taxpayers to collect all the information needed to complete a tax return is an eye-opening experience, Nabors said. It is also the perfect living example of all the issues that Nabors talks about in class. “Sitting beside a taxpayer and doing their return gives our students the opportunity to see how hard they work,” he said. “They come in with multiple W2s — 30 hours at Walmart, 20 hours somewhere else. Students learn that the working poor are not poor because they are lazy.”

“When I saw this class offered it really was something that I was drawn to as a way to help people in a tangible way and to start having an impact around Birmingham,” said Caedmon Isaacson, an Honors College student from Atlanta. “It’s really sad to hear some of the stories and situations that people end up in — many due to the pandemic. I had people who worked four or five jobs in the past year or who got laid off and had to use all of their savings just to feed themselves and their kids. When you talk to these people, it really makes getting them a return worthwhile.”

The sums are not insubstantial. “We have some checks as large as $10,000 and a $5,000 check is not unusual,” Nabors said. “For most of the families we work with, this is the largest check they will get all year. They can pay bills or get car repairs or get dental work done or any one of the other things that they have been putting off. They get their W2s and they don’t sit around waiting — they come running to get their tax returns done.”

From libraries to Zoom, but still impactful

Students usually meet families at one of several Impact America sites in public libraries in Woodlawn, West End, Bessemer and other community locations. After hours of training and a certification exam, “the students sit side-by-side with the taxpayer to prepare their return and then that gets checked twice,” Nabors said. “It can be nerve-wracking the first few times, sitting with strangers and asking them personal questions and all.” COVID destroyed the opportunity in mid-season in 2020, but in 2021 “we were able to do it virtually,” he said. Students connected with taxpayers by phone and completed their returns using preparation software called Get Your Refund while on a live Zoom call with an Impact America staff member. “It wasn’t quite the same connection, but they were still being supervised and interacting with the taxpayers,” Nabors said. “And the returns were still being reviewed. It was a positive experience.”

Pre-pandemic, Nabors had already decided to include online accounting students in his course, including tax preparation. He was originally going to have them identify a local volunteering site in their city, “but when COVID hit and Impact America had the option for everyone to work virtually, we included the online students with everyone else,” Nabors said. “We had people in Iowa and all over the country doing tax returns for people in Birmingham. They did a good job and had fun as well.”

“A person’s finances can tell you a lot about their story,” said Anna Liles, a student in UAB’s fully online undergraduate accounting program from Guntersville, Alabama. “When you know where a person works, how many jobs they have held in the last year, how many children they are supporting and, finally, how much money they have made, you begin to empathize with them. I was very grateful to be able to help these individuals file their tax returns and help them get the most that was available to them.”

The experience “was a real eye-opener,” added one accounting student from Trussville. “I learned that I enjoyed doing taxes and discovered a personal side to preparing taxes as well. Even when everything is online, you still build a pseudo-relationship with the family that you are doing taxes for. You learn some very personal information… you root for them in many ways and want what is best for them from my experience.”

Protection from ‘predatory businesses’

Most people have heard of payday loan companies and title loan companies. “There are also predatory tax preparers,” Nabors said. “If people don’t come to us, they go to a place that opens Jan. 1 and closes April 15 and may charge $400 or more to get a return done that is usually not accurate and is often fraudulent. They will rent a storefront in a neighborhood and put up signs that say, ‘Two kids, $5,600 refund.’ They promise and they are not shy about delivering, even if it is false information. It makes me sick to think about it.”

“Our primary role is to give taxpayers an alternative to the exorbitant fees that they encounter at commercial tax preparers,” said Jennifer Hughes, program manager with Impact America. “Generally, across the country the average fee that an individual might pay is $400.

At $400 per return, Eddie’s students helped taxpayers save $530,000 in fees and secure $2.68 million in refunds.” These funds “are not just a benefit for the individuals and families, but for their communities and the local economy as well,” Hughes said. “And we wouldn’t be able to do this without great partners like Eddie and his students. Eddie is among our most reliable and enthusiastic supporters, and we couldn’t do what we do in Birmingham without him and his students.”

As part of the course, students are required to complete 30 hours of volunteer work. “We had one student who volunteered for 57 hours,” Nabors said. “In his final reflection paper at the end of the class, he wrote, ‘I love these people. Working with the taxpayers has been so meaningful.’ It brings tears to my eyes to see that kind of impact.” At the end of class, “I’ll tell my students, ‘Ok guys, what are you going to do about it?’” Nabors said.

“I know Professor Nabors wanted all of us to walk away with a better understanding of what it means to be the working poor and also how we can help alleviate their burden,” Liles said. “Volunteering to file tax returns was a great way to start. And I’ve begun to pay more attention to the small ways I can help in my own community. Just last week I purchased a school supplies kit through our local school to go to a child in need. Hopefully that will boost a child’s confidence and alleviate the financial burden of their parent.”

 “It’s a really fulfilling class from my side,” Nabors said. “I am so blessed that my departmental administration and school administration support this. I could be teaching normal financial accounting classes, which is what I was hired to do, but the dean’s office and my department chair allowed me to take two of these classes and do something a little different.

“We are able to help people who really need help and enlighten students so they may think differently down the road. I’ll tell them, ‘Say you are an HR manager and have an employee who is arriving late. Do you fire them or talk to them and find out if they don’t have reliable transportation?’ Hopefully people will be more empathetic in the future.”