A new study titled "Missing Millions" by the nationwide community organizing group ACORN has found that across the country low-income residents are missing out on millions of dollars in money from the Earned Income Tax Credit (EITC) program. The organization estimates that between 4,095 to 7,735 households in Grand Rapids are not receiving the EITC. The study describes the EITC as "the largest and most effective poverty reduction program" in the United States, citing its role as a tax benefit for working low-income people that lifts as many as 5 million eligible families over the poverty line each year. ACORN explains that a typical a full-time worker making $7.50 an hour (well above the federal minimum wage of $5.15) earns only $15,600 a year. If the worker has three children they qualify for the maximum EITC benefit of $4,536, which effectively increases their income by 29% and raises them above the federal poverty line. The study asserts that while 21 million families received the EITC in 2005, there are an estimated 3.8 million eligible households that did not receive the credit and therefore missed more than $7 billion in assistance.

In Grand Rapids, the EITC has provided critical assistance to 23,206 households according to a review of 2002's tax filings by ACORN. Those households received a total of $39.6 million. Despite this, an estimated fifteen to twenty five percent of households eligible for the EITC did not file for it, therefore missing out on as much as $7 million in assistance. The study further explains that while there was a loss of $7 million directly, the actual loss in low-income neighborhoods is closer to $10.5 million. Economists have suggested that every dollar received by low-income and moderate-income families has a "multiplier effect" of 1.5 to 2 times the original amount in terms of money being spent at the local level.

To compound the problem, many low-income families turn to a variety of private tax companies offering services such as Refund Anticipation Loans (RALs), Refund Anticipation Checks (RAC), and Assisted Direct Deposit that produce substantial profits for tax preparation companies and the banks that they work with at the expense of low-income tax payers. Such services are often aggressively marketed to low-income communities and charge inflated fees for their services. In Grand Rapids, ACORN found that in 2002 34% of EITC recipients used high cost tax preparation services resulting in as much as $1,032,200 being lost in fees to tax preparation companies. Of course, the problem of predatory tax companies and lenders extends beyond those who qualify for the EITC, with 11,526 low-income households in Grand Rapids--defined as having an adjusted gross income below $34,138--losing $1,498,380 in fees to tax preparation companies in 2002.

In response, ACORN's Grand Rapids chapter is launching a grassroots door-to-door outreach campaign to help families obtain the EITC. The organization has opened a free tax preparation center to further facilitate this process and to prevent predatory tax preparation companies from making money off low-income families. In addition to assistance in filing, the service also offers electronic filing and direct deposit. The tax services are located in the ACORN office at 441 S. Division and is open Tuesdays through Thursdays from 4:00pm to 7:30pm, Fridays 2:00pm to 5:30pm, and Saturdays from 10:00am to 1:30pm.