Brittany Dixon, a supermarket cashier and college student, was charged nearly $400 in fees by a storefront tax preparer in Alabama. Photo credit Bob Miller for The New York Times. Caption credit: The New York Times
On April 7, 2014, The New York Times published a story featuring Impact Alabama’s SaveFirst initiative. The article, “Tax Preparers Targeting Poor With High Fees,” explores the burden that is placed on low-income families when they face large fees from commercial tax preparers.
BIRMINGHAM, Ala. — In December, they begin showing up in empty storefronts in neighborhoods where empty storefronts are easy to come by. Cars with phone numbers brightly displayed on the doors roll down the streets, and signs pop up along the sidewalks promising fast money.
For millions of low-income Americans, tax season means the biggest one-time influx of money all year. It also means the annual sprouting of commercial tax preparers: some of them big-name franchises, some mom-and-pops and some, as 20-year-old Brittany Dixon discovered this year, shockingly expensive.
Ms. Dixon, a supermarket cashier and college student, took her tax documents — a W-2 form and some education expenses — to the first place she saw, in a storefront near the interstate. The preparation took about a half-hour, and Ms. Dixon was told the amount of her refund — and that she would be charged nearly $400, about a quarter of the total, in fees.