Chapter 1 discusses the legal business of tax preparers such as H & R Block, who legally take advantage of the poor by misrepresenting their business tactics in 'helping' the poor. "Tax time in poor neighborhoods is not April. It is January." I cannot lie, I can't wait till January 30th myself. That is the date that employers are supposed to have mailed out your W-2's. Our family usually receives the W-2's before the end of January and we run to our tax preparer. We look forward to our Earned Income Tax Credit and most of the time it is spent before we actually get the deposit to our account. Mostly we catch up on bills, splurge a little for ourselves and kids and replace whatever is broken in the house.
Shipler uses H & R Block as an example but I think it is safe to say that their tactics are used nationwide by all tax preparers. Tax preparers set up shop mostly in low-income neighborhoods, hire teenagers to dress up in costumes to remind the working class that it is that time of the year again. Time to file! The problem Shipler highlights in this business is not that it is illegal to operate, but they fail to properly inform customers of their rights, and responsibilities. They mask words like 'loan' to rapid refund. I admit I was duped once myself. Like those commercials on TV say "It's my money and I need it NOW". I wanted my money now, and when they said "Did you know you can get a rapid refund in three days rather than waiting six to eight weeks for it?". My response, sign me up now! I didn't care about the legal garble, all i understood was that i had a right to get my money soon rather than later. It wasn't until I got home and stopped fantasizing about the shopping sprees, that I sat down and read what I signed up for. They charged me an exaggerated loan rate, but I didn't sign up for a loan. I went back the next day and asked for an explanation. The word 'loan' magically appeared behind rapid refund. I was so furious for being lied to, but they tried to comfort me by reminding me that my money would be there the next day. After that tax year, I never signed up for a rapid refund, I rather have that extra $300 later in six weeks than not to have it all. For the record, I've never waited more than 2 weeks to receive my tax refund.
Shipler discusses that people can do what these tax preparers do as well, with a little time, patience, basic math skills and a calculator. While I agree, most people like myself hate math, much less calculating something so risky like a tax refund. Like 'Evon Johnson' in the chapter, I do not have the courage to do taxes myself in fear of being audited by the IRS, and I would rather pay someone else who knows what they are doing and have them be responsible for whatever mistake IRS finds.
So these tax preparers take advantage of the poor by not being honest and upfront about their practices in phrasing and masking the words 'rapid refund'. Even after Federal judges were involved and "ordered Block to stop using the misleading term 'rapid refund' in advertising loans", "Block continued with the ads by redefining 'rapid refunds' as a reference to electronic filing only." After numerous class-action lawsuits were filed, "H & R Block agreed to a $25 million settlement without admitting any wrongdoing."
Shipler, D. (2005). The Working Poor: Invisible in America. New York: Vintage Books.
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