 My name is Simon Tran, and I am ProPublica's Events Associate. Welcome to what New Mexico needs to know about taxes in 2021. Tonight's event is sponsored by McKinsey & Company and co-presented by ProPublica and Code for America. So for those of who are new to us, welcome. ProPublica is a nonprofit newsroom dedicated to investigative journalism. We're currently growing our coverage of the Southwest, so it's great to be in conversation with New Mexico tonight, as well as folks outside of New Mexico, welcome. Code for America is a civic tech organization that uses technology to design equitable government services, and they operate GetYourRefund.org, a national coalition that provides free tax filing assistance to low-income families. Today, we'll talk about both our country's broader tax system and the tax filing process. To help guide us through this, we're joined by David Neuvel, Senior Program Director of Tax Benefits at Code for America, where he oversees GetYourRefund.org. David previously served as Vice President of Policy and Research at Prosperity Now, a nonprofit focused on building financial security for working families, as well as a senior policy advisor at the U.S. Department of the Treasury. Jeffrey Ledbetter is the Director of Tax Help New Mexico, an organization where he's been at for 10 years. He's also worked at the United Way of Central New Mexico and has been preparing taxes for 30 years. Tax Help New Mexico has 31 sites across the state of New Mexico and into the Navajo Reservation, and that in a non-COVID year, there's just over 17,000 new Mexico taxpayers. So I just want to say thank you again to our panel for joining tonight. One note, this session is not designed to give advice about your personal tax or specific financial situation. Rather, it's intended to provide resources and information to clarify the often confusing steps and requirements of the tax filing system. Also, this session is being recorded and a link to the video will be emailed tomorrow to everyone who is registered. So before we jump into the panel, to kick things off tonight, we will first hear from pro-publica reporters who have reported extensively on the tax prep industry and the IRS. To provide context about the systemic issues that can make taxes so complicated, we had a brief video that summarizes their findings across four key areas. And it's about 10 minutes long, so let's watch. Hi, I'm Justin Elliott. I'm Paul Keel. And I'm Lydia DePellis. We're investigative reporters at ProPublica covering business, economics, and politics. We're here today to talk to you about tax filing services, the IRS, and what you can expect during this year's tax filing season. We'll talk about a reporting from the past several years on these issues as well as information you need to know for this year. The modern history of how we do tax prep in the United States really begins about two decades ago, late 90s, early 2000s, around the turn of the millennium. And that was a period in which more and more Americans were getting personal computers, people were getting onto the Internet, and everyone at the time filed their taxes using paper forms. But there were people inside the government who were thinking a lot about the potential of the Internet. And there was a proposal actually during the early years of the George W. Bush administration to get the IRS to create a new online electronic tax filing system. And the idea was this was going to be a free option that any taxpayer could use made by the government in alternative to sending in the paper forms that everyone had been doing for so many years. Intuit the Silicon Valley company that makes TurboTax at that time already had a very lucrative business selling TurboTax software. And immediately when the Bush administration put forth this proposal to have the IRS create a government free tax filing system. Intuit and the rest of the tax prep industry saw this as a potentially existential threat to their growing tax prep business. The companies embarked upon a very aggressive lobbying campaign that was ultimately successful in beating back this free IRS tax filing proposal. The way that they killed the proposal was they basically made a deal with the government. This was sort of an early public private partnership in technology. And it's called the free file deal. And the basic deal going back to the early 2000s was the tax prep industry led by Intuit promised the government that they would offer a free version of their software to most Americans. And in exchange the IRS had to promise never to create its own public tax filing option. This free file option as it's called was available to most Americans, but the story of the 20 years since this deal was made is a story of the tax prep industry led by Intuit taking steps to make sure as few Americans actually use this this truly free option as possible. So that's the history of sort of how we got to where we are today. The situation that Americans find themselves in today when it comes to tax prep is if you go on to Google and type in found my taxes or found my taxes for free. You will be abarded by advertisements from Intuit for their product, TurboTax from H&R Block from a whole host of other companies offering what are advertised as quote unquote free tax filing options. The fundamental trick that the industry has been playing on American tax filers for many years now is that there are two different version free versions of the software and one is actually free and the other often leads you to pay a fee. So the truly free option is called IRS free file. It's a dot gov website. But on the other hand, there's a whole host of commercial products. The biggest one is called TurboTax free, which are actually very different than IRS free file. If you are one of the people who ends up clicking on a link for TurboTax free or H&R Block free. Essentially what happens is depending on your specific tax filing situation if you have certain types of tax forms certain types of income for example if you're let's say an Uber driver and you have 1099 that you get as part of your Uber income suddenly if you are in TurboTax free version after you've put in a lot of your information you've been spending a lot of time with the software. TurboTax will suddenly tell you actually to file this form you have to upgrade to TurboTax Deluxe, which might cost $100 or maybe you have to upgrade to an even more expensive version of the software. And what we showed in our reporting was that there's literally millions of Americans every year who are getting caught by this fundamental trick where they're clicking on an ad or product that's labeled as free. But then they get three quarters of the way through the process and suddenly they realize they have to pay to finish. Even though these same people if they had just found the right IRS site, the free file site would have been able to file actually for free using basically the same software. There is a inspector general report that looked at this issue after our reporting a couple of years ago and an inspector general found that 14 million Americans in 2019 at least had paid for tax prep that they could have gone for free through the free file program. So if you're looking for the truly free tax prep option, try to find the IRS free file version, you should start on a .gov site. So a lot of our reporting for the last couple of years in the IRS is focused on the fact that the IRS has been starved of resources for the last 10 years really. Not like it was drowning in resources before that started. So what that means for people is that basic things like if you try to contact the IRS, a lot of times it's hard to even get through to talk to someone. Any correspondence in the mail is going to take months on end to resolve. And what we found is that a lot of the cuts that happened as a result of basically budget cuts to the agency, they've lost a lot of personnel. And it's been different story how people have been affected depending on how much income they have. So people at the top of the income ladder have really benefited from this because if the IRS is short staffed, what that means is a lot fewer audits are going to get done. Particularly people who are upper income because those types of audits are really resources intensive and take a really skilled agent to do them. Whereas people lower down the income scale often are really audited by computers. So a computer might challenge someone's claim of a child on their tax return or ask them to prove up the fact that they said they made this much money. Freelancing or something like that. And so you get a letter in the mail and it can be pretty intimidating to deal with. And then you have to deal also with the fact that the IRS is short staffed and it's hard to get answers for anything. We found there's a real imbalance in the cuts the agency has been impacted by that. So as Paul and Justin and probably already told you after a decade of declining funding and staffing, the IRS was asked to do something in 2020 that was unprecedented probably in its history, which was during a pandemic. Get stimulus checks out to 160 million Americans essentially overnight. And what the pandemic meant for the IRS was like many federal agencies, they had to shift to remote work as quickly as possible. And that meant shutting down many of their processing centers. But the way that the IRS still works, much of it is still on paper. And so you had mail coming into these processing centers, piling up and tractor trailers because nobody could get there to deal with it. And remember the pandemic came in the middle of 2019 tax filing season. So if you filed a tax return by mail, you may not have heard back even yet. And that causes a lot of trouble for people who normally depend on getting their dependable refunds back in a relatively prompt fashion and then later on it became important for stimulus checks. So but let me go back to the summer and fall of 2020 when the IRS was trying to get stimulus checks to the people who really needed them the most. And often those were folks either without bank accounts or who hadn't ever filed taxes at least recently. And those people all had to be asked to file a special form and reaching all of them was really difficult. So asking the IRS to cope with all these changing protocols with less money, less staff, less processing centers open and no extra money to do all this outreach that they were being asked to do, meant that inevitably there was going to end up being a cascade of problems that continue into 2021. Now they're being asked to do a second and third round of stimulus checks, which are getting progressively easier because they now know how to get the money out and how to find people. The IRS did get another one and a half billion dollars in the most recent stimulus bill the American Rescue Plan in order to try to modernize their systems and boost their staffing. But it's a paltry way to make up for 10 years of declining funding and it doesn't look like the problems are going to get much better just with that on an ongoing basis. I know there was a lot of information, a lot of different topics, a lot of different issues, a lot of different, you know, terms that were kind of discussed. And so hopefully this next panel discussion segment will clarify some of those questions. You know, there are a lot of resources and information to help navigate this. For one, ProPublica has published a free tax guide full of free fact check tax information, and I'll make sure to drop the link in the chat box so everyone can have that. But we also have our panel, this great panel to share this information. And if you have questions and I see some folks are starting to send their questions in the chat box, which is great. You can type that into the Q&A box at the bottom of your screen and we'll try to answer them. We've also received some questions in advance that we'll try to address as well. So my first question for the panel, you know, at ProPublica, we found that a lot of people don't know where to turn when it comes to, you know, they have questions about their taxes. And so in addition to the IRS free file system that the video discussed, what are some free tax prep options that you've had experience with? And David, I'd love to hear from you first. Thanks, Simon. It's great to be here and on behalf of Code for America, it's great to partner with ProPublica to host this event tonight. Thank you everybody for joining. Yeah, I mean, as we heard in the videos, you know, the tax system is incredibly complicated stress inducing and confusing, even in a normal year. And I think, you know, with the pandemic and all the tax law changes happening this year is probably one of the most confusing moments, I think, at least in my memory of tax season. So there's a lot to be, you know, concerned about and, you know, confused about and fearful of but the good news is, you know, on the more positive light that there are a lot of trustworthy free and kind of easy to access resources out there to help folks both file and get their questions answered and kind of navigate this wild tax season that we're all involved in now. And where the tax season is more important than ever, obviously, since a lot of folks are suffering during the pandemic and need access to this flexible cash and the refunds as quickly as possible to help them get by. So, you know, one of the first resources I always refer people to when thinking about free tax resources is the volunteer income tax assistance program also known as the VITA program, which is a public private partnership. It's overseen by the IRS, but it's actually administered by nonprofits across the country. It's led by folks like Jeffrey who you'll hear from in a minute who are doing excellent work helping folks get their taxes done and it focuses on folks typically with, you know, load a modern income so anyone with incomes below $57,000 a year roughly, and that have relatively straightforward not too complex tax returns to help them file and normally you would go to, you know, a VITA site in person and you'd be able to sit down with a volunteer that would help you kind of prepare your return and a highly trained volunteer through a rigorous IRS program. Obviously in the pandemic that it's hard to find face to face tax preparation, and that's where get your refund, which Code for America launched helped, you know, came about it started before the pandemic but really kind of ramped up during the pandemic to offer socially distant digital ways for folks to get their taxes prepared. There's a variety of different models, you know that you can go to the website itself to learn more about it get your refund dot org, and there you can find out more about get your refund but you can also find access to local VITA sites like Jeffries, or others if you're outside in New Mexico that are nearest to you. But the great news is when you go there, you know you can do your taxes almost entirely digitally virtually by uploading documents and you can there's a live chat function where you can ask questions with folks. There's a variety of different models that are out there. There's some phone support through 211 and United Way and there's also certain models where we call VITA valet where you can kind of drop off your paperwork at a site in a safe manner and then a volunteer will prepare your taxes and kind of either text you or call you or contact you with questions and kind of guide you through the process. There's a variety of different other models, depending on how comfortable you are and what your preferences are and what your VITA site offers. If you're someone who, you know, feels very brave and you're you're fine doing your taxes by yourself you would normally maybe use a Turbo tax or some other type of software but that's quite costly and may not be the route you want to go. There are online options that are free to my free taxes.com offered by United Way is another great option for folks who are comfortable kind of going to do it yourself route. The other route I would mention, you know, if you're particularly brave that the IRS offers that is not a free file program is something called free fillable forms. It can often get confused when you're going on IRS website between those two options but free fillable forms is basically the paper form and electronic version and you just have to fill it out and submit it. That is available to anyone of any income. So, again, you have to be brave and, you know, be the person who's willing to do paper and kind of fill it out electronically and submit it but, you know, if that's the route you want to go, that's available to you. And the one thing I didn't mention before when I was talking about VITA too is that VITA has a sister program that's focused on older Americans too. It's called the tax counseling for elderly Americans program. You know, particularly if you get pension income or if you have more complicated social security cases, they can also help you with your tax situation as well if you find a TCE site for and that's focused on lower income older Americans, anyone age above the age of 60. So, those are just a few of the options. Jeffrey might know of some other local options to New Mexico specifically there's often other local options are sometimes available as well or might have other ideas as well but those are some of the big ones. You are talking about the same things that I'm talking about. When it came time to go virtual. We were lucky enough to partner up with code for America and get your refund or at the end of last tax season and it was a great program to, to get us moving and in this virtual direction as you mentioned, as we're talking about alternate ways to get your taxes done which you can't do the face to face by the which I usually do every year we can't do that pandemic situation. The get your refund is the in New Mexico the way we are encouraging people to feel comfortable using what we're calling a end to end virtual model using their mobile device or tablet their computer anything like that. And the program itself is a is a handhold it walks you through what you need to do and you can use your own devices and you have your documents right there so if you can capture those documents with your camera on your phone. You have access to this program and you have access to a great help system and a great real time help system to walk you through and ask you some of the questions that you have. So it's it's as easy as you can get while still being in control of the process yourself from from start to end and do a good job and have proper people take taking do do proper taxes on it. And just as he said, my free taxes. That is what we call more of an interrogative program where you get in there and you say, yeah, I'm willing to do my own taxes, but the program itself is going to ask you, did you have a job last year if so, well, let me have what's in box one it's going to walk you through the program so the my free taxes calm way to do your taxes is called do it yourself but it very much walks you through in a sort of like it's an interrogative question oriented way that that will get you out the other side. It's not the same as having somebody else do it for you, but those two ways that David mentioned are the exact best two ways we've tried to get to folks here in New Mexico as an alternative to the face to face model that we would be using in the past, taxes. So I absolutely agree with those two. The free file is something we've been encouraging since the beginning. We give out three sources when they call us which is the free file which is the .gov free files the my free taxes and refund.org and that's pretty much giving us access to most people access to what they need one way or the other to those items. And you know, Jeff, my next question is really for you to, you know, we're talking about the pandemic, you're talking about transitioning to being virtual and not being able to help people, you know, in person and so with the pandemic we've also seen widespread taxes and a spike of unemployment, right, which, you know, adds to the, you know, the issues of, you know, filing taxes. What are ways that unemployment insurance will affect people's taxes. For example, do you have to pay like pay taxes on it. What should people expect. Okay, this question has the answer to this question has evolved over the past few weeks here nationally, federally and as well in New Mexico. First of all, in New Mexico, employment, if you receive unemployment, that's considered taxable income. So that's going to be put into your taxes represented in your taxes is taxable income. And when you go to have unemployment insurance they will ask you if you want to have federal taxes taken out for the simple purpose of it's going to be taxable later on so if you do get unemployment you probably do want to have taxes taken out. But what has happened and David you definitely have to be sort of my bumpers on this to keep me going down the lane straight here is fairly recently, the federal government made $10,200 worth of unemployment. Excludable from income. So, if you had unemployment of $10,200 or less, it will be excluded from your tax return. That obviously creates on the face of it some problems if you've already filed your taxes, and you've already got your refund and you already paid the taxes on the unemployment that was on the original tax return. And then how does it work moving forward on both federal and state levels if you've already filed your taxes with unemployment on those tax returns. The guidance from the federal government just came out this week that said that they, the federal government the IRS is going to recalculate those unemployment tax returns. And for lack of a better way to put it send you the difference. There's no need to amend the tax return if you've already done it. This is going to be a process done by the IRS. Now, that doesn't translate down to the state here in the state of New Mexico. Looks like we will probably have to do some sort of amendment to make that match on the state we haven't heard final guidance from the state on exactly how to do that just yet. So that's a that's just a big that's been an unemployment has been in play recently for those reasons but you've already filed it will be taken care of on the federal level. New Mexico level will still waiting to get your guidance on that and then moving forward. It's going to be in all the calculations on all your tax returns moving forward so if you go to file your taxes expect your unemployment to be in the technical terms is excluded up to $10,200. For example, if you only have $5,000 worth of unemployment, all of that would be excluded. If you had $10,500 worth of unemployment. There would still be $300 that would not be excluded. It's up to $10,200 right so if you had $30,000 worth of unemployment only 10,200 of the excluded from your taxable income. It was the same number for everybody so unemployment is taxable. It's kind of in play right now but if you've already filed. It's going to be taken care of by the feds and moving forward, it's going to be in the calculations for both the federal and the state. Thank you Jeffrey. My next question is, you know, folks who are, you know, gig workers right you know people who took on gig work to replace lost income during coven like driving for Uber, which is an example in the video. How does that affect how their income is classified for their taxes and either one of you feel free to jump in. But I don't know if you have your set speech about the 1099 miscellaneous that's now the 1099 any see and how a lot of people don't necessarily expect to be getting that form and how it turns them into a small business. That's where we see some of the surprise. But what happens is if you drive for Uber. You get treated like it's called an independent contractor. And for lack of better way to put it that's being treated as a small business. And so when you're paid you're paid as a small business person you're not paid as an employee. So usually taxes aren't taken out on the federal level or the state level or if you think about your W2 there's no social security or Medicare withholding all those kind of things taken out either. And so when it comes time to do your taxes, you as your own business are now responsible for your federal taxes your state taxes and what would be the employers portion of those other social security taxes and so it's a. It's just a with the gig economy. There's an opportunity for employers to treat employees not as employees to the benefit of the employer. And we see that utilized in the Uber lift that kind of situation where they're treated as independent gate worker drivers, but we also see it with the construction industry where somebody says would you like $500 a week to work or like you know $1,000 a week to work or whatever they're going to pay them. And they said like that job and they get paid in cash every week. And then at the end of the year they get a 1099 for $26 27,000 and they end up only $7,000 in taxes. Most of the time it was the exploitation of a language barrier or exploitation of English as a second language where there was a misunderstanding on the part of the worker, not getting that they're not being paid as an employee. And there's a there's an exploitation of that whole loophole. So this week, they tried to correct it a little bit by creating a singular form called a 1099 NEC. It's simply a new form for the same category, same category. But again gig workers are treated as small businessmen and that's the big difference and when you pay your taxes as a small businessman you're not only paying your taxes as an independent citizen but you're paying your taxes as that small businessman as well that's incorporated into your personal taxes. So there are different requirements like expenses and some other things that you need to keep track of that a normal citizen wouldn't have to do. David, did you want to add anything to that. Yeah, I think those are the big pieces that Jeffrey covered. Yeah, for 1099. It's unfortunately, especially in the pandemic. A lot of folks who lost their jobs who were on w two's got a very nasty surprise kind of experiencing you know what it's like to receive a 1099 to be considered a consider a small business when it's it's pretty clear that most people are not small businesses they're working for, you know companies like Uber or others. My next question is about the earned income tax credit that was a term that I just heard about really in the last few weeks and that was also featured in the video so David. Who qualifies for it and what what is the earned income tax and what are the new rules for it this year. The earned income tax credit I think is it's one of the most impactful tax credits for kind of low and moderate income workers it's a, it's a credit spin around for a while but it's slowly kind of increased in size and prominence. You know, you often hear about the income tax credit that it's refundable that's the term that's used and, and basically what that means is if you don't you have a lower income and you don't have a liability attacks liability or it's already offset that you can still get a refund of that so you know it can range anywhere refund sizes can range up to $6,600 roughly it can be quite a large credit for the for families with dependents who fall on the right income levels and and once you start working it slowly kind of ramps up in size and then it hits up, it's a point as it gets toward modern income slowly starts to the kind of level out for folks but it's one of the biggest anti poverty programs in the country it really it really makes a huge difference and I think many folks every year get a large refund and don't realize you know that a good chunk of it sometimes is to the credit of the earned income tax credit that's a it's a it's a great program one of the downsides unfortunately of the earned income tax credit it's very confusing and it's complicated and because of that it leads to folks sometimes making honest mistakes even professional tax preparers making mistakes when calculating the earn income tax credit or you know incorrectly claiming a child or dependents they think is eligible for the earning income tax credit when they aren't and then this can lead to trouble with the RS down the road for some folks unfortunately it has to get sorted out. You know I think this is one of the reasons why I highly recommend another yet another reason I would recommend this program is because you know by the volunteers are highly trained. Vita has the highest accuracy rate of any type of tax preparation out there it's in the 90s I mean even paid preparers. Don't get accuracy ratings quite as high as is vital volunteers because both volunteers in the process the review process are very thorough to make sure they get it accurately done for you so I think you know highly encourage folks to number one. Just look in to see if you're eligible for the earned income tax credit and definitely use the volunteer income tax assistance program if you are because many, many people who do their taxes on their own sometimes forget to claim it and they're missing out on a lot of money you know, you know there's there's billions of dollars that are kind of left on the table each year because some folks failed to claim it you know I said some estimates put it as high as one out of every five. And then Simon, as you mentioned, you know, the the newest bill that just passed Congress, the American Rescue Plan enhances the ITC, even further and this would not take place in this tax year but it would be for the next tax year. And what it does particularly a lot of the folks who miss out the one out of five are usually workers but they don't have any dependence or they're not non custodial parents and they're filing for themselves. So the ITC can be a little bit lower than that larger number at throughout for you can be you know as low as like $500 is, you know what folks can get, but under the new law that's actually going to roughly triple it'll be up to like $1,500 potentially for for single workers. So even, you know, even if you don't have a lot of dependence where the bigger refunds come into play for folks, it can still be a lot of money and if you haven't filed in the past you can, you know if you go to your vita site and I'm sure Jeffery does all the time to for folks who are not traditional filers who might be coming in because of all the stimulus payments the IPs and coming into file. You know you can file back taxes as well and that can add up to a lot of money and there's you know a lot of people are hurting right now behind on rent need money for food, you know bills, you know, because of dealing with the economic fall out the pandemic. This is a huge resource of money that's available to folks and there are free secure services that can help them and it's your money you know this is the money you're entitled to to so we really encourage people to claim and file for it. The ITC itself you know there are many other features we'll talk about I'm sure more but the ITC is one of the biggest the biggest benefits out there for folks. Thank you. I just want to chime in that the earned income time here in New Mexico we have what's called the working families tax credit as well. And the working families tax credit is a credit specifically that shows up on the New Mexico tax return is absolutely directly correlated to the earned income tax credit on the federal return. If you get the earned income tax credit on the federal return you're going to get the working families tax credit on the New Mexico return. It's roughly 10% of what you got on the federal return so it's another good chunk of change. Again, to make sure it's a good idea that's another reason to make sure all that earned income credit information child information all that kind of stuff is correct like David was saying because if you get it in there and you're entitled to get it it's it's it's a good idea to make the system work for you, you know and that's part of what by the program is about is making sure that programs like the ITC and child tax credit get utilized by the people that it's there for you know what I mean that if it's there that you that you get that those are the kind of programs that we want to make sure you see when you come to see people like fire. If you think I was just going to say with David if you in New Mexico if you think of the he was talking about the TCE programs in New Mexico. There's basically two ways to get your taxes done if you're talking about the free tax preparation there's tax help in New Mexico. And then what most people associate with, which is the TCE is the ARP programs that are around here in New Mexico you can think of the program David discussed about the, the little more complicated returns for the older Americans that that's the TCE program. That's the ARP programs here in New Mexico. And then the other programs around the state of the tax help in Mexico programs but just to clarify that because here in New Mexico they have most people would see it as the one of the ARP programs. So thank you for clarifying and localizing that. My next question is about the IRS. So what if someone has is having trouble with the IRS. They can't get something sorted out or they're getting audited. What resources can people access for problems like this. David let me start first. Yeah, I think, you know, one of the first things that you, you know, oftentimes, you know, these things come as mail audits, you know, you'll get like a very large threatening letter from the IRS that shows in your mailbox. And I think it's natural human reaction is to kind of panic and maybe try to ignore it and hope the problem goes away and kind of bury it under the mail pile. I can tell you this, that is the absolute worst thing that you can do because the IRS will not forget that they sent you that letter. I think one of the most important things you can do is, you know, usually that, you know, they can be complicated but they're written in plain English they've been kind of long but like, you know, make sure you review it make sure it looks roughly accurate to you and seek out help. You know, I think you can low income taxpayer clinics are a great resource to help people with more complicated cases if you're in a confused situation. You know, so I think, you know, that can be a great resource for folks who feel like they don't know where to turn about it. You know, as we heard in the videos at the beginning, you know, the IRS itself, you know, does have lines open in resources where you can contact them to get further information and that's not a bad route to go either. But, you know, they are severely understaffed anyone who's tried to call the IRS knows that you can get disconnected you can be on hold for a very long time, you know, recommendations are usually to call really early in the morning, you know, it's usually around 8am Eastern time, which is really, really quite early New Mexico time. But you know, if you want to go that route and try to talk to someone at the IRS that's not a bad way to go either. But I do, you know, whenever it comes to, you know, whenever you're, you know, my experience with vita sites and folks who own money or run into problems with it, you never want to ignore the issue with the IRS, you can negotiate with the IRS you can do payment plans if it's an issue you can get things settled so you know don't feel like you know if they if you get a big number if you get an audit letter from them that you know you have to do everything immediately and then we're also going to come after you. The other thing I should really clarify about is the IRS doesn't really call you no one's, you know, there's a lot of scams out there where they say like you owe it's money and the IRS is going to arrest you or they're going to show up at your door and you know you need to do this and that. You know, I can guarantee that that is typically should be very skeptical if you get one of those calls and it's very highly likely to be a scam that no one will call you like that to kind of threaten you in that way and I think a lot of people have been taken advantage of by pieces like that. It's something in the mail if they're auditing you and it'll look very official from the IRS and like I said, you know calling the IRS contacting your local your loan come tax payer clinic. If you have questions to you can go to folks like Jeff free as well, you know by the sites may not be able to help can't you know represent you in an audit defense or do any of those pieces but they can help you understand some of the basic steps and point you to local resources in order to kind of help you get through this. There's a lot of the letters that come back and and I usually say or people afraid of the letters coming back as well but I usually say it's they're going to send you a letter that says they're going to come you know eat your children and burn down your house and it's going to be a horrible thing. But if you just read through the letter they're also going to explain to you what's going on and what they want you to do, and they may not want you to do what you think they want you to do. They just want one form related to another form they may not want you to redo your taxes they may not want this at that of the other at all. So, it's the IRS just wants to communicate with you and just wants to settle the score so to speaking and get into an engagement or just basically collect the agency. And so as David said, the best thing to do always is to not throw away the letters and not do that the that's not the pathway to getting along with the IRS at all you need to get in communication with them as soon as possible because they will work with you, they will figure out something with you as well, because in the end they want their money. No thank you for clarifying that. This next question is also related to the IRS. So, with the backlog of paperwork at the IRS, due to not only the processing of the stimulus checks, but also the pandemic. In addition to the decade of declining funding. What are you seeing, are you seeing delays in tax returns and what kind of timeframe should people expect this year. It would be to start on this one, you know, the IRS, you know, as we heard in the video they're under considerable stress, you know, in the past, you know, if you filed they have these tables which are pretty reliable about like the date that you filed and when you get your refund. That is obviously all kind of gone out the window. You know the biggest thing we've heard, you know, it really depends on your return and kind of what's going on with it. And, you know, I think anything that's flagged for complications, for example, you know we've heard from a lot of folks who, you know, the recovery rebate credit, you know if you didn't receive one of the first two stimulus payments or EIPs, or maybe you didn't get the correct amount and you need to amend for that. We're hearing from a lot of folks you know that is getting flagged and kind of set aside and taking a little bit longer as the IRS kind of checks the records to reconcile and make sure that the payments are going to the right place, you know, being short staffed and, you know, they're trying to still have and finish getting out the third round of EIPs and they're dealing with the unemployment issue to reconcile that Jeffrey brought up earlier there's a lot of pieces and still trying to finish, you know, tax forms for 2019 in some cases the paper ones in particular are pretty bad. You know we are recommending to everyone whatever you do like don't file by paper if you can help it by any means try to do it electronically. You know, paper is always slower but in this case it's really you know it's it's the timeframe for getting a response or getting you know everything through is even more ridiculous. Just because of the pandemic and handling physical paper and those types of things in addition to call the other burdens that the IRS is dealing with. But you know, roughly, you know we've heard from folks if you don't have some kind of issue in your return this flag and that doesn't mean there's something wrong with your return necessarily or that you know you did anything wrong it just means it's getting closer to a review by the IRS and they just have limited folks to do that. Because again they're social distancing like everybody and trying to treat this properly that that can slow down your return but roughly around two months is you know what we've heard from the IRS for a lot of these returns at the most. But again, if you don't hear anything the IRS has to get my to get my payment tool on the website, you can go on there and look, you know, there are different levels sometimes you know them in stories about people that just doesn't have information for them whether it's the statuses or the timeline is, but if there is any detailed information that's one of the best places to go when looking for this and, you know, the other thing I would say I know everybody wants to refine quicker. Like I said, we're in the pandemic, especially now, but people shouldn't panic, you know, things will get processed and you know, even particularly a lot of people asking questions about EIPs or stimulus payments and trying to figure out oh do I have to claim it now or do I have time for this. The IRS has made clear that you can still claim all these things if there's an error with it you can still get it reconciled. You know for several years down the road up to three years down the road to get these things reconciled so you won't miss out on these things. But you know, we do encourage everyone because of all the benefits overall definitely file a 2020 tax return. Definitely file earlier and definitely do it electronic if you can and be patient. From my side it's just anything with paper is just not moving. So we're doing everything we can to avoid paper obviously there's some glitches with the 19s that are still stuck out there some amended returns that got sent out by some of our sites that have disappeared in there but electronically is absolutely the way to go if you can get it done that way. Just definitely avoid paper is my only thing on this one. Avoid the paper. Thank you. I think that's the biggest takeaway during these times. Great. Well, we have some audience Q&A from, you know, from folks who previously submitted also some folks, feel free to please submit any questions may have as we, you know, we have about 10 minutes left or so so you know we'll try to get to your questions but David you had just you know making sure folks file for you know the 2020 taxes but what if folks didn't file for last year. Should they. What would you suggest to recommend. Yeah, no it's a great question Simon you know I think you know it again this is an unusual tax year and in many ways some good some bad but I think, you know we're encouraging everyone, you know to file whether you know for this year if you didn't file for last year you could like I said you can file for three years back. You know typically you know there's a there's a minimum income level for folks who don't need to file if you fall below it. You can still file it's optional. And in many cases, you know, for some folks it would make a difference for others it wouldn't. But you know we've entered this new realm. You know, with, with all the relief the coven relief where, even if you have no income whatsoever obviously you can qualify for stimulus payments. If you meet certain conditions, we have the, you know, Jeffrey mentioned the child tax credit part of the new tax law expands the child tax credit before it wasn't eligible for really low income families that had low incomes, or no incomes it wasn't refundable fully refundable as the earning compact credit is now it is fully refundable so again that means even if you don't have a tax liability you can still receive this benefit. The child tax credit credit benefit is quite large as well you know it can be, you know, 3000 it's been expanded to $3,000 it depends on your income but for for low income folks can be $3,000 for children up to 17 and for younger children six and below it can be $3,600 per child which is quite a sizable amount of money. It, it's going into effect not for this tax season so this is working get confusing for some folks it's going to affect not for this tax season which for the next tax season like the EITC change, but they're doing a piece where you can claim it in advance, starting at least theoretically again the IRS has to implement this they got a lot in their plate. But starting in July folks can start receiving it in monthly installments in advance half the credit they would get so for folks it could be $253 per child that they could start receiving in advance. The IRS is going to release new information on this they're going to set up a portal that allows people to, you know, change their family information or payment information and address information. But you know, because of all these benefits it's a long story but I think you know because of all these benefits we're encouraging people, everyone to file. And this is again why by does a great resource going file electronically file for back taxes if you can, again, you know it can set you up for future payments that might be coming down the road for many years to come but it also, you know we've seen folks get incredibly large, you know refunds that hadn't filed in the past and you add that up with all the VIPs child tax credit, earned income tax credit if they're eligible so it's really to everyone's advantage to file and and to you know, this is the time more than ever to get in there and do it. We're encouraging everybody to file their 2020s this year for basically stimulus purposes just to get in there and get the books now we have a lot of folks in New Mexico. We did not receive their stimulus payments and we have a lot of folks in New Mexico who didn't do their 2019s. And so we've been doing a lot of both 19 and 20 and specifically as David just said, if you didn't do your 19s you didn't do them for a lot of people because they didn't have the income requirements or anything like that but we are suggesting that you file the 2020s for the stimulus payments basically and we actually put together a one pager for various groups around town here in Albuquerque to use the my free taxes.com DIY program to specifically go in and do nothing else but claim your stimulus payments at this income. So 2020 is definitely a tax year that you need to file taxes for to make sure you're in the game for everything that's going on this year and then, as you said you also have three years to go back with 2020 this year when you had taxable income or you earned money or however you are situated this year you should file for 2020 to make sure you're eligible for whatever's coming down the pipeline. No, thank you Jeffrey and thank you David. Yeah, and that was one of the questions people, someone did ask, actually ask, can you still get a stimulus payment if you haven't filed tax for 2019 right and I think that, you know, we were able to hear that you are able to still do that. Jeffrey, I was curious about another question about unemployment. What happens if someone gets unemployment from a state that they don't currently live in? What is that process like what should they know? Well, that's basically, as I said, it's going to be income. So that's going to be technically income from another state. And so when you're doing your taxes, either the program you're using or the preparatory that you're talking to is going to ask you, were you a resident of the state we are now in or were you a resident of the state that we got this unemployment from, because if we're doing a tax year it would have been in the same year. So it wouldn't have been an unemployment from a previous year or anything like that. So during this particular tax year which state were you the citizen resident of, based on that determination, whether you are a resident of New Mexico and your income unemployment was from out of state, New Mexico might have a different way of dealing with that income than let's say Pennsylvania might. New Mexico is going to count that unemployment as income is going to give you some credit for the taxes you would have paid in the other state. But other states would do it differently. But you just have to report it with each state as you are defined as a resident. But if you made money in a state and you pay taxes in a state, you have some tax responsibilities in that state, depending on what kind of resident you were in that would be a basis on which state you lived in the most and that kind of stuff. No, thank you. I'm just trying to look at our questions. One question we got was, you know, our paper federal forms for student February still good, or did the recent COVID relief law make them possibly. That's kind of a good question. I have not I assuming since David talked about him earlier the paper filable forms that you can get online. We've had the changes that have flown have flowed all the way down into our day to day tax preparation from the IRS into our local into our preparation system that we use our commercial preparation system. Not that far I'm hoping that it got on to the actual IRS principal forms, but I don't know for sure. Yeah, that is a good question actually yeah because the software that we use has definitely been updated to take that into account. But yeah, you know normally I would say the IRS I would hopefully would have updated the forms by now but you know given the COVID situation and the other things going on. It's quite possible that they haven't so yeah, that's a great question. I think that's really you know the questions that we've been able to cover more broadly. I just want to thank David and Jeffrey for taking the time today to be our panelists and for such an informative discussion and to our audience. Thank you so much for joining us and for asking questions. And you'll receive an email tomorrow with some of the resources that we talked about tonight as well as the full video of tonight's discussion. And I just want to say from all of us at ProPublica and Code for America. Thank you for joining us. Have a great night and we'll see you next time.