Barring blizzards and fog, tax preparers help in bush Alaska

By Jeanette J. Lee
Anchorage, Alaska (AP) 3-08

On the island of St. Paul, winter is marked by the opening of the opilio crab fishery, the start of high school basketball and the annual arrival of the tax preparers.

Like most communities off the road system, there are no tax professionals among the 460 residents of the Bering Sea fishing port, 300 miles west of the Alaska mainland.

So each winter, volunteer accountants and students from as far off as upstate New York board tiny planes bound for St. Paul and dozens of other bush villages to prepare tax returns for free.

“Before this service, some people didn’t do taxes at all and some went to local helpers, like the city clerk, or mailed their materials to Anchorage,” said Faith Rukovishnikoff, executive assistant for the tribal government of St. Paul. “It was a service that our community members needed.”

The program, run by the nonprofit Alaska Business Development Center, secured $3.5 million in refunds last year for thousands of low-income taxpayers in 90 small communities, according to an annual report.

Some village residents have computers and can e-file, but many do not. Older residents in particular speak little English and can find it difficult to decipher the tax codes.

“Often we’ll get somebody who hasn’t filed for a few years, so we try to educate them,” said Michelle Kern, the center’s vice president. “For example we’ll see a commercial fisherman who didn’t know how to file for business expenses one year. The next year he’ll bring in all the receipts categorized into gas, food, supplies.”

The center began offering free rural tax aid in 1996 to help commercial fishermen, many of whom were filing incorrectly or had simply given up after fish processors stopped doing tax returns for the fleets in the 1980s.

The IRS had been seizing the valuable permits, required to catch and sell large amounts of fish and crab, of those fishermen who failed to pay. Captains who lost their permits faced near-certain unemployment, as did their crews, according to program co-founder Gary Selk.

“The IRS agreed that if we could get people into compliance that they would not repossess the permits,” said Selk, who is president of the Alaska Business Development Center. “It accomplishes the same thing without having to take a person’s livelihood from him.”

Villages are sponsored for the program by Alaska Native corporations and non-profits, or local and state government. Any resident can line up for tax help, regardless of income, as long as a return is not too complex.

The program now attracts volunteer accounting students and faculty from Ithaca College in New York, Gonzaga University in Washington state and universities in Idaho, Montana and Anchorage.

William Kolski, an accounting major from Montana State University, spent his spring break preparing taxes in three Yup’ik Eskimo villages on the Bering Sea coast.

“I think it’s a great experience to meet these unique people and to assist them in getting services,” Kolski said by phone from Quinhagak. “It’s really closely knit. Everyone knows each other and they joke around and poke fun at us.”

Most of the tax advice is routine. For instance, the preparers make sure everyone knows about the Earned Income Tax Credit, which made up 43 percent of client refunds last year, and the pros and cons of different filing statuses.

But occasionally issues arise that are vintage bush Alaska.

For instance, Inupiat Eskimo taxpayers on the North Slope can take advantage of an itemized deduction, unique to the region, for expenses incurred while whaling.

A flurry of postcards, fliers and radio announcements lets residents know when the tax preparers are coming. Word-of-mouth is quite effective in places like the coastal village of Platinum, population 38.

The teams spend one to three days in a village, filling out paperwork and answering questions, often for 12 hours at a stretch, in schools, local government offices or the washeteria, a hybrid self-service laundry and public shower.

“The villagers were teasing us that they’re going to shut down the airport until their taxes are done,” said Mannie Boitz, Kolski’s supervisor.

That might not be necessary. Each year, foul weather forces the tax preparers to skip over at least a few villages because their four- to six-seat planes cannot land in windblown snow, fog or cloud cover. At other times, volunteers are marooned at the air strips until the weather clears. The center runs a free mail-in tax prep service to reach these bypassed villages.

In 2007, the center spent an average of $1,115 per village on airfare, or about 70 percent of the program’s direct costs, according to its latest annual report.

The program brought $78,000 in refunds to St. Paul last year, a significant amount in a community where the average annual income is $18,400.

“It’s been a lifesaver for me and for a lot of other people,” said Brenda Jones, a 47-year-old school office manager and St. Paul city council member. “I don’t have to go through H&R Block in Anchorage and pay. With the way the economy is right now, a lot of people can’t afford that kind of luxury.”

On the Net:

Alaska Business Development Center: