When people think about domestic violence, the initial assumption is that the abuse is physical or sexual. But that’s not always the case. Abuse can take many forms, including emotional, verbal, psychological, and financial. In fact, research shows that 98% of people experiencing domestic violence also experience economic abuse. If you’re a tax preparer or tax professional, the first thing you should do this tax season is familiarize yourself with the issue of economic abuse.
Abusers can establish and maintain power over a survivor’s finances by preventing or limiting access to funds, sabotaging or interfering with employment, coercing debt, forging tax documents, and more, which often prevents a survivor from leaving the relationship. Economic justice advocates see many issues arise during tax season, and tax preparers should be on the lookout for signs of abuse. Because survivors often feel shame about what they have experienced, many choose not to disclose their abusive situation to anyone, let alone their tax preparer.
Given that it is normal for survivors to not self-identify as survivors, tax preparers should look for other indicators that someone has experienced or is currently experiencing economic abuse. Just because a client does not disclose their situation doesn’t mean that there are not things that you can look out for as indicators that someone has experienced abuse. When assessing a client, it is important to remember that anyone can be a survivor of economic abuse and that it affects people of every socioeconomic status, gender, race, ethnicity, and sexual orientation.
For survivors who have left an abusive relationship, it is common that they were not aware that their abuser had previously filed taxes for them or their children, resulting in the survivor not receiving the money that is rightfully theirs in tax credits or refunds. Abusers will often rush to file taxes first, claiming the survivor and children, which forces the survivor to file a more strenuous paper return and prove the children’s residency is with them. As a result of Covid-19, many survivors have seen issues with not receiving pandemic-related payments such as stimulus checks or the Child Tax Credit. These types of payments provide a great deal of needed financial support for survivors, and without them, there is a heavy financial impact.
Advocates often find that a survivor might have been forced or coerced into signing tax documents they didn’t understand and is in trouble with or owes money to the IRS because of their abuser’s actions as a result. If a person says that they don’t have access to official documents in order to file, including an ID or passport, that may be an indicator that the documentation was purposely withheld from the person as a form of power and control.
Survivors can be reluctant to include a valid address on formal paperwork out of fear of being tracked down by their abuser. If you have a sense that there may be a history of domestic abuse, ask about confidentiality to initiate filling out an innocent spouse relief form—which can relieve an individual’s responsibility for paying tax, interest, and penalties if a (former) spouse forged documents—that will protect them moving forward.
When meeting with a couple, if you notice behavioral elements that may indicate an abusive relationship—complete domination of the conversation by one party, looking for approval from a partner when answering any questions, insisting that one partner does not need to know certain information—take a mental note. Do not alert them to you knowing that something is amiss, and do not confront the suspected abuser. Discussing abuse with or in front of an abusive partner can have unintended consequences that may be dangerous for the survivor.
An effective way to mitigate the situation is to be sure that the survivor clearly understands the meaning of each document you are presenting and the impact of what they’re signing. Tax preparers who take the time to explain how tax documents work will help survivors who may not even realize they are experiencing economic abuse until they receive more information from a tax expert.
If, as a tax preparer, you notice any of these signs, it is important to respond sensitively and avoid inflicting any judgment or blame. Victims of abuse have had to make difficult decisions to survive and protect themselves, their children, and loved ones, as any type of pushing back on an abuser could result in increased violence or be deadly. Avoid any accusatory language, such as, “well, you shouldn’t have done that,” or the survivor might feel increased shame and will be less likely to seek help. These are phrases that an abuser may have already used against the survivor throughout their relationship, and survivors often have been made to feel as if they did something to deserve the violence. Instead, try using language such as “that sounds like it was very difficult” or “you did the best you could.” By responding with compassion, you are creating an environment that will be more effective to help navigate the situation.
Unfortunately, there are few protections for survivors when it comes to taxes and the IRS, even though most have to suffer the effects for years, if not decades. Steps are being taken in the right direction on a federal level, with the introduction of economic abuse and coerced debt to the Violence Against Women Act and the recognition of coerced debt in the new Fair Credit Reporting Act, but we have a long way to go. As tax professionals, you are positioned to be an advocate for the clients you work with. I urge you to take an active role in working with advocates and survivors to alleviate the devastating effects of economic abuse, specifically when it comes to taxes.
This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Teal Inzunza, LMSW, is the program director of the Economic Empowerment Program at the Urban Resource Institute.
We’d love to hear your smart, original take: Write for Us