The Earned Income Tax Credit (EITC) is a federal program meant to supplement the income of primarily low-income wage earners as a way of providing a helping hand for those that are qualified and working at gainful employment. According to cbpp.org "in the 2013 tax year… over 27 million working families and individuals received the EITC; ….the average EITC was $3,074 for a family with children." The EITC payment is made once a year, upon the completion and submission of the subject's fiscal tax year, to which the recipient of such, will receive their EITC payment in one lump sum. Not too surprisingly, this lump-sum payment for virtually all EITC recipients will often be looked upon as a monetary bonus or the equivalent of hitting the lottery, and thereby will quickly be allocated and used for the purposes of paying down debt, furniture, car expenses, clothing, medical needs, shopping spree, or similar, with very little or nothing being set aside as savings for future expenses or needs.
The EITC payment money is so important for so many recipients often because throughout the year they have struggled to make ends meet and quite frequently have had to use other means, such as the use of credit cards, friends, family, or charity, to keep their bills current or at least somehow to keep their creditors at bay. This implies strongly that each dollar of the said EITC monies, is of value to the recipient, and while it is one thing for the recipient, to spend it somewhat unwisely or carelessly, it seems a real shame to have a significant portion of that refund, siphoned off by tax preparers such as H&R Block and Jackson Hewitt, who take advantage of people's fear of the IRS, or of filing taxes correctly.
What these tax preparers do for the most part, is play upon the fear on their consumers as well as offering them the convenience and lure of getting their money even sooner, but like most anything, that sounds too good to be true, those tax preparers make sure to get significantly more than their fair share, for tax anticipation loans, for the preparation and filing of your taxes, for add-on services, and for useless audit and error-protection guarantees. Unfortunately, for the consumer signing up for these services, since they aren't actually paying anything out of their pocket, but instead are having these fees and services taken from their refund, they just see it as nothing more than the cost of doing business with the man. However, those hundreds and hundreds of dollars add up to millions of dollars of extra revenue for the tax preparers, while taking away much needed money from those that can least afford to sacrifice those dollars.
The main problem with the EITC as currently structured is that the payment is provided to the recipient as one lump sum, to which often they are not skilled in the best way to handle this money, and are invariably surrounded by sharks, parasites, leeches, snakes, opportunists, liars, cheats, con artists, and those that are expert at extracting monies from people in one way or another. While the government likes to pat itself on their back about how wonderful this program is and how responsible and beneficial it is to the working poor, they conveniently forget that it enriches far too many undeserving people and organizations at the very expense and on the sore tired backs of the exploited poor.