Liberty Tax Service Taps the Underserved Hispanic Market

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The third largest tax preparation company undertakes an intensive campaign to reach the fastest growing population segment.

Recent research shows that foreign-born Hispanics with less than five years in the United States are tremendously underserved in the tax preparation industry. According to the    According to the Census, out of 42 million Hispanics in the United States, 40% are foreign born. A new report by the Center for Immigration Studies found that 7.9 million people moved to the United States in the past five years, the highest five-year period of immigration on record.

This represents significant potential revenues for the tax preparation industry. According to Training Resource Clinic, which conducts focus groups of Hispanic immigrants, “As many as 70% of newly immigrated working Hispanic immigrants in some areas are missing out on refunds as well as the ability to establish credit and purchase homes by not filing taxes.”    

Training Resource Clinic reports that the lack of accurate information about tax preparation has been one of the biggest hurdles for this market segment. Inability to speak English is another impediment. Another factor is fear in the undocumented community. These Hispanics are unaware that you do not need to be a citizen or Permanent Resident to file taxes. The IRS does not communicate with Immigration and thus undocumented workers (an estimated eleven million) are able to file taxes as well using an ITIN. (Individual Taxpayer Identification Number)

Even if Hispanics received education about these issues, there is a dire lack of tax preparation companies who have experience handling issues that pertain to the new immigrant. After a three year study, Training Resource Clinic reports that “If Hispanics were not turned away from tax preparation companies due to the language barrier, many received rejections from the IRS for problems with ITIN numbers, invalid social security numbers, dependents in foreign countries and confusion with multiple names. All of these problems are surmountable but require specific training procedures and resources which tax preparation companies were lacking”.

Armed with this information, Liberty Tax Service has implemented an intensive Hispanic Services division that focuses on a holistic approach to growing and serving the Hispanic customer base. Community relations, educational outreach and cultural sensitivity training for franchisees are all parts of the package.

Marketing materials are created in Spanish rather than merely translated into English and are focused on answering questions that would not typically be addressed in standard American marketing efforts. What is a W-2? Can I file taxes with an ITIN? Can I claim my family members in Mexico? Seven hundred Franchise owners participated in two- day trainings across the country sponsored by Liberty that focused on specific cultural customer service issues, bilingual recruiting and tax laws pertaining to the Hispanic immigrant.

Employees are being trained in recruiting, interviewing and testing employees to ensure that offices are staffed with truly bilingual and bicultural employees. All customer forms and office signs are translated into Spanish and offices assist clients with obtaining ITINS for themselves and their families at no charge.

To ensure that the initiative was successful, Liberty has hired the industry’s best known Hispanic marketing consultant, Blaire Borthayre, author of “Marketing to the Hispanic Community: A Comprehensive Guide for Tax Preparation Offices” and “A Tax Preparer’s Guide: Everything You Ever Wanted to Know about ITINS” to oversee and implement the project.

According to Ms. Borthayre “This is a long term commitment by Liberty Tax that shows true vision on the part of CEO, John Hewitt. In terms of tax preparation companies, they are truly pioneers in fully implementing these strategies of outreach, inclusion and support for the Hispanic community. ”

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Blaire Borthayre
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