Color naming

Tax problems are hardest for people of color

CINCINNATI — The IRS website says it currently has more than 10 million unprocessed individual tax returns dating back to 2021 alone. He usually only has about 1 million unpaid returns before tax season. Experts say these delays and other systemic problems in the IRS help perpetuate the cycle of poverty for marginalized people, especially black Americans.

Yvonne Howard of Avondale said she suffered directly from IRS processing delays.

The 64-year-old thought she would spend her retirement days enjoying a quiet, modest life in her Cincinnati Metropolitan Housing Authority (CMHA) unit. It was supposed to be a nice change of pace from her hectic old job and a chance for her to focus on her health. However, a confusion between his former employer and the IRS disrupted his plans.

“I was actually freaking out,” Howard said. “I think they’ll take everything I have.”

Howard was mistakenly slapped with an exorbitant tax bill after ACSM, a funder of his former employer, mistakenly entered his name and income into a 1099. Even though ACSM admitted the error, the IRS told Howard she would have to pay $29,000. This happened in 2019; the IRS has still not processed his request to correct the bill.

“It’s 2022 and you’re still dealing? Come on. I get that you’re understaffed or whatever, but I don’t think it should last that long,” Howard said.

Howard said she suffered two heart attacks in part due to the stress of the situation. She is now stuck with another $79,000 bill for her heart surgery.

Howard had less than $10,000 in his savings account at the time of the confusion. Now she has a simple request for the IRS:

“The stress they caused me and the medical bills I racked up because of a lot of that stress, I think between them and ACSM there should be some sort of compensation,” said Howard.

Howard’s attorney, David Wovrosh of the Legal Aid Society of Greater Cincinnati, said there were a host of systemic issues behind the delays.

“The IRS has been underfunded for the better part of a decade now,” Wovrosh said. “They have constantly used outdated technology, they are understaffed. The pandemic has only made the situation worse.”

The Center on Budget and Policy Priorities reports that the IRS budget has dropped about 20% since 2010. Its workforce has shrunk about 30% over the same period. As a result, Wovrosh said marginalized people are being kept waiting for returns and tax credits meant to lift them out of poverty.

“They can’t afford a professional to help them, which might speed up the process a bit,” Wovrosh said. “So, unfortunately, we are once again seeing a system where people are supposed to receive these tax credits in a timely manner to lift them above the poverty line. But they can’t just because they can’t afford the time or the resources to do it.”

Wovrosh said race plays a big role. He sees people of color struggling disproportionately in their dealings with the IRS in the Southwest Ohio region. He said 61% of Legal Aid Society clients are black.

“Make sure you pay attention to every document that comes from the tax office,” Howard said. “Once the information is destroyed or wrongly submitted, you’re going to find yourself in a situation I’m in: waiting three years to hear about a mistake that was made and corrected, but you don’t. haven’t done anything about it yet.”

Monique John covers gentrification for WCPO 9. She is part of our donor-supported journalism program Report For America. Learn more about RFA here.

If there are any stories about gentrification in the Greater Cincinnati area that you think we should cover, let us know. Send us your tips at [email protected]