Never fun and sometimes painful, filing income taxes can be a confounding and sometimes painful experience for the average American citizen. But for new immigrants, the process can be a downright nightmare.
Lourdes Montes, who helps Latino immigrants understand their taxes, can rattle off the most common myths about filing: The more dependents, the fatter the refund check. Even if dependents live abroad, they can always be claimed. And those who earn more than $30,000 don't have to pay taxes at all.
"There is so much misinformation out there," she said. "And it makes them more susceptible to a lot of predatory services."
It's why Montes' employer, the East Harbor Community Development Corp., launched an outreach campaign for non-English-speaking immigrants. The program's main goal is to educate and warn those who may be vulnerable to scam artists masquerading as tax preparers. And the organization has begun its work far in advance of the crush of tax season with a series of community meetings held around Baltimore city and county.
In June, the nonprofit began offering informational charlas, or seminars, in Spanish with the help of an initial $25,000 grant from the Internal Revenue Service. The organization recently received a three-year grant from the tax agency to continue the project, which also offers participants financial coaching and free tax return preparation.
"We could offer it at our office, but unless tax season is already here only a few people are going to come," said Robin McKinney, assistant director of East Harbor CDC. "Our strategy is to go through providers that are already in existence. They are going to a place that they know and trust."
This month, Montes instructed a group of about 20 at a gathering at the Hispanic Apostolate of Catholic Charities, while a vocational English as a Second Language class was being held in an upstairs classroom.
Montes passed out copies of state and federal forms and tackled her clients' most confusing questions.
She explained that the most common problems involve Individual Taxpayer Identification Numbers, or ITINs, which allow individuals without Social Security numbers - such as undocumented immigrants - to pay taxes. The ITIN program began in 1996, and the IRS has since issued more than 7.3 million numbers, at a rate that has grown steadily over the years. But not all ITIN recipients file taxes, and others run into a multitude of problems while doing so.
During much of the discussion, Patricia Salazar nodded her head and took notes. The 46-year-old from Peru said she applied for an ITIN from a local tax preparer in February, hoping to receive the number and file taxes by April. She paid $100 for notarization of documents, but never received her number. Salazar said she tried to reach the tax preparer by phone, but her calls went unreturned.
"I brought my passport. I had everything notarized," she said in Spanish. "But it's really difficult. I want to inform myself so this doesn't happen again."
Many undocumented workers use fake Social Security numbers to obtain employment, but then use an ITIN to file taxes.
In one case, McKinney found that local tax preparers had entered a falsified Social Security number on a client's tax return rather than the legitimate ITIN. The preparer told the client that doing so would ensure a larger refund and offered the client a refund-anticipation loan, McKinney said. However, the IRS rejected the return when the name and Social Security number did not match. Now the client owes back taxes plus the interest on the loan - a total of about $2,000, McKinney said.
Often, tax preparers who dupe customers don't get caught because the preparation businesses are open for only a few months of the year.
For immigrants, income taxes can be complex because citizens of different countries have different rights. For example, a Mexican or Canadian national in the United States may claim dependent children who reside in their country of origin, but people from other countries may not.
"Generally, the people that we service, they have complex lives," McKinney said. "We know the tax codes and people's lives don't always fit. But for this population, we need to do education."
Montes, who has been offering sessions twice monthly since June, said the complaints from advocates of tighter immigration policies that immigrants don't pay taxes is untrue.
"They just want to do things right," she said. "They want to be good residents and follow the law."
No one knows how many undocumented immigrants pay income taxes, but those who do, Montes points out, pay into systems such as Social Security and Medicaid from which they won't reap the benefits.
Others say some undocumented immigrants are skeptical of using an ITIN to pay taxes. The ITIN does not offer some of the benefits afforded to other individuals, such as the Earned Income Tax Credit, which can offer low-income individuals up to $4,000 per family.
"They wonder what is the incentive," said Jose Zambrano of Towson, who prepares taxes part time at H&R Block.
East Harbor CDC also uses seminars to point out the benefits of paying taxes. Attendees learn that if they eventually try to change their immigration status or citizenship, inspectors often review tax records.
"I'm not interested knowing their immigration status. I'm not interested in knowing how they got to the U.S.," Montes said. "I just want them to have the right information and do the right thing while they are here."
So does the IRS, McKinney added.
"The IRS doesn't care how you earn the income. They are not Homeland Security. They just want a piece of it," McKinney said.