#33: Probably. Maybe. More or less. I’m not sure.
Kafka-esque conundrums on the street.
“Street Cred” is about people and relationships, not social policy. But with April 15th coming, I wanted to raise awareness of the fact that an Earned Income Credit may be available to people on the street who earn most of their money under the table. I’ve also included some short pieces about other practicalities that are harder for people without a roof over their heads.
#1 Earned Income Credits.
A Public Service Announcement (not) from the IRS.
A while back, I handed Jake a little money and said, jokingly, “I should give you a 1099.” To my surprise he said he thought it was a good idea.
Just because someone doesn’t have permanent shelter doesn’t mean they have never filed taxes. Or that they don’t have at least some 2023 earned income (and withholding). So, I’m giving 1099s to three of my friends on the street. I need the expense to offset subscription income and they need it to qualify for an Earned Income Credit.
I feel they’ve easily earned that money by explaining to me the reality of life in tents and at the shelter; the difference between Suboxone and methadone therapy, what happens if you relapse, and how much these drugs cost at the Clinic, the pharmacy, and on the street—including the convolutions of Medicaid eligibility. They’ve also described the complexities of getting an ID, qualifying for rental subsidies and temporary housing, and other challenges of life on the street that I’d never thought of before. I would have needed extensive training to master all these subjects on my own, and better to learn about them first hand anyway.
Many of the people who ask passersby for money do work…usually under the table.12 They wash windows, stack wood, rake leaves, do some painting, heavy lifting, or even a little carpentry. Anyone who thinks people who panhandle are just lazy should see how many appear around 5 a.m. after a snowstorm to shovel the walks in front of businesses who’ve hired them to do so. To me, that’s earned income, although a whole lot harder to prove.
What about the money people make panhandling? I know the very idea may annoy people who think panhandlers should just go get jobs. But, as I’ve written, the issue is very complicated and, for many homeless people, panhandling is a way to supplement rather than replace income.2 I did find a site that said panhandling money could definitely be claimed as earned income. But several others said it couldn’t and tax laws change all the time. So can it be claimed? Probably. Maybe. More or less. I’m not sure.
I was confident I wasn’t breaking any tax laws. More importantly, I was convinced I wasn’t "accruing any karma” because I assumed that the money millionaires and billionaires avoid paying in taxes would more than cover the cost of earned income credits for all the homeless people in America with at least some earned income. But I wanted to make sure. After searching multiple websites, I learned that the difference between what the IRS thinks is owed in taxes compared to what is actually declared/paid is called the “Tax Gap.”3 The most recent year for which I could find comparable data was 2021. That year the IRS says the Tax Gap was ±$640 billion dollars,” which is ten times greater than the ±64 billion dollars in Earned Income Credits people qualified for that year. An even greater disparity than I expected.
Filing can be challenging for people on the street and, if they only make a little money, they may think there’s no point. Whereas they may actually be leaving money on the table for money earned under the table.
I’m hoping the 1099’s will encourage my friends to file, and make it easier for them to claim their cash income without having to jump through the hoops of Form 4852 [as per above] to prove it.
The form looks simple but meeting requirements seem pretty complicated to me. Does a person living on the street have the information and support to go about filling out forms 4852 and 1099 to get their EIC? Probably. Maybe. More or less. I’m not sure.
#2: Cashing Checks.
One day I was working in my coffee shop when a guy came over, handed me a check, and, after asking if I was David, said, “I think this is yours.”
It was a check I’d written a week before to Suzanne. She had asked me for a little money to deal with a prescription co-pay for an antibiotic. Since Suzanne usually tells me the truth (well, at least 80% of the time), I was willing to give her the money, but I didn’t have any cash and was late for a meeting. I did have a check, however and, after quickly writing it out, gave it to her, saying I hoped she could cash it.
Guess not. This guy was handing me back that check.
“I didn’t think she’d be able cash it…” I shrugged. “Even with an ID. Even at my bank without me being there. But I didn’t have time…”
“Don’t worry. I gave her the money she needed,” he said.
“That’s good. I’ll pay you back.”
“Whatever.”
“No, I should. Give me your Venmo name…”
He shrugged, tore the check in half and wrote his Venmo name on one half and ripped up the other.
Another time, a friend came up to me with a check from a local business he’d done a little work for. He had no ID and no chance of cashing it, but we figured if he signed it over to me, I could probably cash it at my bank.
No go.
Some banks cash third party checks. Some don’t. There’s no one clear answer. But this article in Forbes Magazine can tell you everything you need to know. Probably. Maybe. More or less. I’m not sure.
#3: Calling a Friend in Jail.
Isaiah got word to me through his lawyer that he’d like to talk to me. Isaiah’s the guy who’d been caught shoplifting at Wal-Mart while having some pot in his pocket. Even though this was probably not the first time he’d been caught for a victimless crime, it’s hard for me to think of him as a “serial offender.” That title should be reserved for people who commit felonies or steal millions from the poor to give to the rich—and often get elected to high political office. To me, Isaiah is more of a “serial annoyance” or “serial pain in the ass.”
Communicating with someone in jail is not as simple as picking up the phone and making a call. After calling the corrections department and being passed from one perky automated operator to another, I learned I had to set up an account on Securus Technologies.
Slowly, and not all that surely, I learned about calling, emailing, making a video call, or even sending photos, eCards and VideoGrams to someone in jail. For everyday emails you can just buy “stamps”. For calls, you put money in the prisoner’s account, and they can call you (or anyone on their list). For video you schedule a Zoom-type visit and pay by the call.
One reason I did this was to help his similarly homeless partner get in touch. She couldn’t do it herself because, like many people on the street she doesn’t have a phone, tablet, and/or computer—or, more importantly, a credit card. About $25 bought a quick video call for me and enough minutes for him to catch up with his partner. We even used a couple of “stamps” to send emails.
I was happy to learn that last week he was released to a nearby rehab facility. He still has to wear an ankle bracelet but maybe this time, when he’s released, he’ll report to his Parole officer and dot all the i’s and cross all the t’s he needs to stay out of jail.
His partner told me that his caseworker had gotten in touch with her and said she thought he’d be able to call her in a week.
Probably. Maybe. More or less. I’m not sure.
https://taxfoundation.org/blog/irs-tax-gap-report/
Note: there are also child tax credits and other opportunities for low-income filers.