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IRS Should Improve Volunteer Tax Program, US Treasury Watchdog Says

by Mike Godfrey, Tax-News.com, Washington

28 September 2017


The Internal Revenue Service (IRS) should improve its Volunteer Tax Assistance (VITA) program to extend coverage to underserved populations, the Treasury Inspector General for Tax Administration (TIGTA) has said.

The VITA Program was established in 2007 as a one-year Congress-funded grant program (with annual renewal) to fund free tax help for people earning less than USD54,000 as well as disabled and limited-English-speaking taxpayers who need assistance in preparing tax returns. IRS-certified volunteers provide free basic income tax return preparation for those who qualify.

TIGTA reviewed almost 4.5 million tax returns prepared by the VITA Program between 2014-16 and found that volunteers were preparing returns for taxpayers whose gross income exceeded the USD54,000 income threshold set for free tax return preparation, including 34,371 with incomes over USD100,000 and 11 with incomes over USD1m. The IRS also could not verify if 456,220 (10 percent) of tax returns with complex tax schedules were prepared by volunteers with advance certifications, while 15,402 returns were out of scope altogether.

TIGTA's report, published on September 20, said the IRS had failed to establish a process to verify the reliability of its data or analyze it to measure the success of the program. The report also found that some guidelines and procedures were not current or consistent.

TIGTA recommended that the IRS develop new procedures to measure the extent to which the program increases coverage to underserved populations, and maintain communication with volunteers under the grant program to ensure congressional funds are being utilized appropriately. It also called on the IRS to ensure that only volunteers with advanced certifications prepare complex tax returns, and that VITA internal guidelines are consistent.

Although the IRS agreed with most recommendations, it disagreed with TIGTA on the requirement for advanced certifications.

TAGS: compliance | tax | tax compliance | law | United States | Tax

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