Teen's $4.50 in earnings turns into financial status

February 06, 1996|By MICHAEL OLESKER

The youngest in my household, Sara, 16, finds herself initiated into the great American game of high finance with the arrival of that most dreaded of documents, the W-2 wage and tax statement.

It's a swell country, no? So let me inform everyone concerned, which means not only the IRS but the income tax specialists Gilman and Ciocia and the VISA credit card company, all of them somehow already alerted to Sara's marvelous new financial status and attempting to cash in, that they shouldn't be expecting too much business out of her.

According to documents painstakingly prepared by her employer, Limited Too Inc., Sara made, in her first full year of participation in the American workplace, a total of $4.50.

Minus the 28 cents Limited Too removed for Social Security tax, and minus the 7 cents they removed for Medicare.

Thus leaving $4.15 for the Internal Revenue Service, and Gilman and Ciocia, and the folks at VISA to fight over.

Sara earned this $4.15 by the sweat of attending an hourlong training seminar offered by the Limited Too company. She might have earned more had not the beguiling call of Ocean City been heard across the summer landscape, enticing all manner of area teens more interested in a beautiful tan than a magnificent bank account.

But it's a tribute (of a sort) to everyone concerned that her single hour, and her $4.15, seems to have alerted so many institutions, and so many computers, and put her on so many mailing lists.

Start with the folks at Limited Too. A spokesman said yesterday that the company has about 100,000 employees around the country. Many are kids who work part time, who live at home and who don't make nearly the $650 required to file income tax returns. But Limited Too is required by the IRS to process all their W-2 forms and send them out both to the kids and to the government.

And that's just the beginning of processing.

Sara's name seems to have arrived on some private lists, the way names do once they've been entered onto various payrolls. One list was sold to VISA, the credit card people, who took one look (a quick look, one assumes; a look that might have overlooked the decimal point between the 4 and the 1 in $4.15) and sent her a Notice of Selection declaring her a "preapproved cardholder," with a note from Joseph B. McFadden, president of First Virginia Card Services Inc., declaring:

"I just wanted to add my own personal note of congratulations and explain why you are so special. ... We can't offer [Classic VISA] to everyone -- only to those who have achieved a superb credit rating. As your personal invitation confirms, this includes you."

And what gives this 16-year-old 11th-grader such a "superb" credit rating?

"Her credit criteria," VISA spokesman Terry Cabell explained yesterday.

"Which criteria?" Cabell was asked.

"It's extremely complex," said Cabell. "But, essentially, she has a good credit history."

"Ah, excuse me," I said, "but she has no credit history. Absolutely none."

"Then I have no answer," said Cabell.

He suggested a call to the Equifax Credit Bureau in Langley Park, which supplied Sara's name to VISA. How did Equifax get Sara's name? And how did they determine her "superb" credit rating?

Equifax declared such financial matters "can't be discussed over the phone."

Financial matters of such enormous magnitude as $4.15, that is.

Which leads us to Gilman and Ciocia, New York-based income tax specialists with eight offices around the Baltimore area. Two days after Sara's W-2 forms arrived, she got a letter from Gilman and Ciocia, noting, "This is the year-above-all-others that you need the professional help of an experienced Accountant. ... You would be surprised how many times we have seen taxpayers lose Big Money because their tax man was not thoroughly knowledgeable."

Heaven forbid that Sara should lose any of her $4.15 "big money" because some "tax man" wasn't properly versed on the way to keep her from blowing 28 cents on Social Security taxes.

"Actually," said Henry Seegers, speaking from Gilman and Ciocia's New York offices yesterday, "we send 9 million of these letters out every year. We buy lists by ZIP code. Beyond that, we don't know a thing about you."

Meaning, they don't know Sara's 16, or that she made $4.15 last year, or that her family finds overtures from various financial institutions invasive and manipulative.

Yesterday, Gilman and Ciocia's Baltimore manager, Joel Weinberger, said, "I apologize. You're not the only one who's complained. I don't like it either. It's costing me money, buying lists and sending letters to 16-year-olds. It's an invasion" for a 16-year-old. "And I don't want her business, I want yours."

Guess what? Companies sending such letters aren't getting her business -- or mine.

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