Serving employees in Memphis
The Peabody Hotel Group in Memphis, Tenn., is in the service industry, and found there was a service it could provide its employees: Access to EITC.

Merilyn Mangum (cq), vice president and general counsel of the Peabody Hotel Group, learned about EITC and the need to increase access to the credit by more eligible working people from the local United Way.

"United Way is working with the IRS in looking at ways to help the lower income population," Mangum says. "EITC was very underutilized."

With 800 employees at three hotels in Memphis alone, "many of our associates were eligible for this, but instead, go to (for profit) tax preparers and pay a fee to get their credit back," she says. "Even though they file for EITC, they're still spending money on a tax preparer. We decided we could help them."

Five people volunteered at the Peabody Hotel to coordinate the free tax preparation program, Mangum says. Each went through training on the computer tax program, some of it during work hours, for which they were paid. "It was quite an effort on the part of the program coordinators," Mangum says. "But we felt that it's a very worthwhile program."

The Peabody Hotel Group is a division of Belz Enterprises. Belz is considering Memphis its test case for expanding free tax preparation throughout the company, Mangum says.

The hotel put posters up near time clocks advertising free tax preparation. Leaflets enclosed in payroll checks promoted the free tax prep program, and it was highlighted at new employee meetings.

Last year, employees signed up for free tax preparation on a poster, but Mangum says organizers discovered it was better to have sign up in a more discreet area. "We made the opportunity available to sign up in private at the payroll office."

This February for two days, Peabody will do taxes free for its associates. "It's truly money in their hands," Mangum says.

Education is a challenge for employers who want to offer free tax preparation for their employees. Some employees get their last paycheck of the year and head to a for-profit tax preparer to get their EITC money back quickly. Not only are the interest rates for Refund Anticipation Loans costly, but some pre-tax deductions don't show up on the last paycheck. Those sometimes aren't corrected until W2 tax forms come out at the end of January, so filing early can cost employees tax refund money.

"We've tried to educate associates that if they just wait a few weeks, we'll do it free," says Mangum.

This will be the second year Peabody has offered free tax preparation to its associates. "This year, we did a much better job in publicizing not only what we will do but the benefits to the associates," Mangum says.

Two lessons Mangum would share with other companies planning to offer free tax preparation services to its employees:

• Offer a private place to encourage people to sign up.
• Find a positive way to encourage people to wait until their W2s come out rather than rush to have taxes prepared based on final paycheck. In the long run, it costs them to have it done.

"The people who have participated have been very pleased," Mangum says. "We hope to see a measurable increase in the numbers each year."