Thread: Tax Prep Chains Attract (illegal) Immigrants

Tax Prep Chains Attract Immigrants

Last Edited: Saturday, 07 Apr 2007, 6:17 PM EDT
Created: Saturday, 07 Apr 2007, 6:17 PM EDT


By DAVID TWIDDY
AP Business Writer


KANSAS CITY, Mo. -- Pedro Morales filed his first income tax return four years ago, a difficult decision for an illegal immigrant and one that caused years of headaches because the apartment manager who prepared his return made so many mistakes.

"It doesn't help when you have a bad experience, because it makes you want to give up," said Morales, 37, through an interpreter, acknowledging that many of his neighbors in Johnson County, Kan., who are illegal immigrants don't file income tax returns.

But Morales has continued to file taxes with the help of more-informed preparers, hoping to build a tax history that will help his case when he eventually applies for permission to remain in the United States.

Morales isn't alone. Many immigrants are filing tax returns either because of requirements showing a five-year record of tax payments when applying for a green card or a simple desire to get a refund.

"They want to be compliant," said Maria Aranda, who teaches financial literacy classes for El Centro, a Kansas City-are organization. She helped Morales with his taxes.

It's difficult to determine how many immigrants are filing income tax returns in the U.S. because the Internal Revenue Service doesn't track tax filers by their immigration status. But paid tax preparation chains, such as H&R Block Inc. and Liberty Tax Service, say they have seen anecdotal growth and are working hard to attract more of them through targeted offices or greater marketing in their native languages.

"It's the fastest-growing segment of our population," said John Hewitt, chief executive of Virginia Beach, Va.-based Liberty Tax Service. "There's going to be a spectacular opportunity in the next three to five years with (immigration) amnesty and guest worker programs creating 10-15 million new taxpayers."

One measure of the immigrant market is the growth of Individual Taxpayer Identification Numbers, or ITINs, which the IRS issues to immigrants to use on their tax forms instead of Social Security numbers.

Last year, the IRS issued 1.5 million ITINs, the most since the program was started in 1996 and a 30 percent increase from the 1.2 million issued in 2005. In total, the agency has issued 10.8 million ITINs since the program began, although it noted some of those are for people living overseas with some tax-filing responsibility.

Kansas City-based H&R Block, the nation's largest tax preparer, is going after the market in two ways.

First, it has bulked up the number of retail offices with bilingual tax preparers, hoping immigrants are more comfortable discussing their financial situation in their own language.

They also have translated their marketing into 15 languages, including Spanish, Chinese, Creole and the Filipino dialect of Tagalog.

Next, the company last year rolled out what it calls its "spot franchise" program, which establishes H&R Block offices in major metropolitan neighborhoods where immigrant groups have concentrated.

"It's an opportunity for us to reach a client base that in general we have not been able to reach before," said Doug Duty, H&R Block's assistant vice president for franchise operations.

Many of the offices are established mom-and-pop outfits that have decided to become H&R Block franchisees.

Waseem Hashlamoun's company, Al-Muhaseb, or "The Accountant" in Arabic, has served his Middle Eastern-rich neighborhood on the north side of Chicago since 1995.

Hashlamoun became an H&R Block affiliate last year, a move he said has allowed him to focus more on running the business than worrying about training his tax filers and has provided his customers with H&R Block's full menu of financial services, including mortgage lending and investment advice.

"When we switched last year, over 95 percent of those who walked into the office asked, 'Why did you change?' It's for you guys that I changed, so I can offer better services and products to you," he said.

Duty wouldn't say how many spot franchises the company has, but he said the number has doubled in the past year.

Hewitt's Liberty Tax Service hasn't created special offices for immigrants but has spent more time and money marketing to Hispanic customers.

In 2004, Hewitt said he hired a Hispanic consultant and began testing Hispanic-focused marketing in Raleigh, N.C. One office set a record with 1,500 tax returns in the first month.

"Raleigh isn't a heavy Hispanic market and we were very excited by that," Hewitt said.

Since then, Liberty has begun offering tax software online in Spanish, something H&R Block has yet to do, and has watched Hispanic returns double every year, reaching 100,000, or about an eighth of all returns, last year.

Parsippany, N.J.-based Jackson Hewitt Tax Service Inc., the nation's second-largest tax chain, doesn't have a corporate strategy aimed at immigrant customers, said spokeswoman Sheila Cort. "But we have a lot of franchisees who may be pursuing their own efforts in their communities," she said.

The companies acknowledge serving the immigrant community involves a great deal of education, especially for people from countries where income taxes don't exist or for people who have to tackle both a language and a math gap.

They also have to deal with the intricacies of illegal immigrants, who may think filing a return either changes their citizenship status or makes them more vulnerable to being seized by immigration agents. The IRS has said it doesn't provide income tax information on individual filers to U.S. Immigration and Customs Enforcement.

"Dealing with tax policy is intimidating for me, and I've worked in tax preparation for years," said Sheila Dougherty, a senior manager in H&R Block's multicultural marketing division. "It's especially intimidating for an immigrant who doesn't understand the bureaucracy."


http://www.myfoxny.com/myfox/pages/News ... geId=3.6.1

They also have to deal with the intricacies of illegal immigrants, who may think filing a return either changes their citizenship status or makes them more vulnerable to being seized by immigration agents. The IRS has said it doesn't provide income tax information on individual filers to U.S. Immigration and Customs Enforcement.

It should!

Reading that news article makes my blood boil. Isn't it wonderful that they (illegal immigrants) are filing tax returns and filing for unearned income credits and getting huge refunds back. You See they get to claim their aunts, uncles, nieces, nephews and illegitmate children that live in mexico, if they come here to live for 40 days and return to Mexico. Then there are those that use their brother's, sister's tax nos. to claim income tax refunds that they (brother, sister) did not work for and are in livinig in Mexico.

I had a friend that worked for a tax service who informed me of all this.

When and what president pushed this ItIN no. I think it was Georeg H Bush.

Interesting story, DTaft, and welcome to alipac.
Please continue to post, read and get involved. You will find many good people here.
Again, big welcome!

Welcome to Alipac Dtaft

Thank you for the welcome and the interest in the info. I would like to know if ya'll are interested in other information I receive from my friends and other group I belong to? Also, the letters that I mail to my Senators, State Rep and others in government that I vent to.

Great. Just PM a moderator if you have questions of whether to post something. I would post information in the New and Articles from other groups

W. our President has asked everyone not to post anything from the grassfire. It's posted at the top of this forum.

I hope you signed our Bank of America boycott petition on our homepage. We also conduct focus campaigns to urge town councils to enforce strict immigraiton enforcement ordinances. We have been been successful in almost 100 towns across America. You can write a letter of your own or use one of ours to change and add info. Thanks again for joining and just pm if you want more information.

Thank you for the info and I wasn't refering to Grassfire. I have received other news articles from friends and was interested in sharing with ya'll and didn't know if you wanted to have it posted anywhere at all. But, I have it and will follow your suggestions.

Happy to have the info. and a new recruit!