Director, Earned Income & Health Coverage Tax Credits
Internal Revenue Service
Department of the Treasury
Revamped outreach efforts for the Earned Income Tax Credit, helping hundreds of thousands of Americans receive vital benefits, and oversaw the Telephone Excise Tax Refund–the largest one-time tax refund in history.
The Earned Income Tax Credit (EITC) is widely recognized as our federal government’s most effective anti-poverty program, embraced by Presidents ranging from Reagan to Clinton. But despite the program’s overall success, studies revealed an erroneous payment rate of roughly 25 percent, and millions of eligible workers were not claiming the credit. David Williams, who heads the EITC office at the Internal Revenue Service, led the effort to revamp the program. Thanks to his leadership, as many as 500,000 more people each year are receiving vital benefits.
The Earned Income Tax Credit was created to help ensure that work really pays for low-income workers by creating a dollar-for-dollar offset for Social Security taxes paid.
Unfortunately, the program can be quite complicated, even for professional accountants. In 2003, Williams identified some key problems with the EITC. He worked hard to eliminate error and fraud within the program, cutting erroneous payments by more than $2 billion annually, but he realized the IRS needed to do more than focus on compliance. In fact, millions of low-income, working people forgo billions of dollars each year because they fail to claim the EITC to which they are entitled. Williams set out to change that.
Williams knew that the IRS had to step up its outreach. He understood one of the biggest challenges in reaching out to potential beneficiaries is that when the IRS comes calling, people don’t want to answer – even if the IRS is trying to give them money. That is why Williams set out to revamp the IRS’s EITC awareness efforts. The key strategy was to create a network of partners, including local nonprofits and businesses that people already trusted.
Today, under Williams’ leadership, the IRS works with more than 150 nonprofit and community-based organizations to host EITC awareness events in more than 50 cities, creating volunteer tax assistance sites at banks, businesses and community centers. He also used news conferences and local media to help drive people to seek out this assistance.
In just one year, more than 2 million tax returns were prepared at these volunteer tax assistance sites. The tax credits these low-income working Americans receive help them cover the essential costs they face every day – from child care to fixing the car. One person who attended a workshop reported that the tax credit helped her go from being an apartment renter to a homeowner. Since David Williams launched these new outreach efforts, the number of eligible taxpayers receiving the credit has increased by 500,000 people a year, and last year, more than 22 million people received $41 billion in EITC payments.
In addition to his leadership of the EITC program, Williams also led the Telephone Excise Tax Refund initiative—the largest refund program ever operated by the IRS. Under this program, every American (individual, business or non-profit) who paid for long-distance service between the years of 2003 and 2006 was eligible for a refund. Understanding the logistical nightmare that would ensue if taxpayers were asked to provide old phones records to claim the refund, Williams brought together the Department of Treasury, IRS divisions, the Small Business Administration and telecommunications industry leaders to reach consensus on a framework for the refund. In the end, the IRS had a process in place for tax year 2006 that enabled individual taxpayers to claim a standard amount for their refunds and for businesses and nonprofits to use an estimation formula. This solution was easier for taxpayers, the government and industry. In the end, more than 85 million taxpayers will receive billions in refunds.
As a senior official at the IRS, it would be easy to think of David Williams as a numbers guy. But his people skills, strategic approach and ability to lead diverse groups to achieve shared public policy goals have distinguished him as one of our government’s most outstanding employees and have helped him positively affect the lives of millions of Americans.