Preparing accurate tax returns is still a challenge for all too many participants in the Internal Revenue Service’s Volunteer Program, according to a new government report.
J. Russell George
The report, by the Treasury Inspector General for Tax Administration, found that tax returns were prepared incorrectly because some volunteers did not follow all guidelines. For example, volunteers did not always use taxpayers' intake sheets correctly.
The IRS Volunteer Program provides no-cost federal tax return preparation and electronic filing to underserved segments of individual taxpayers, including low-to moderate-income, elderly, disabled, and limited-English-proficient taxpayers. It includes the Volunteer Income Tax Assistance, or VITA, program, and the Tax Counseling for the Elderly, or TCE, program.
TIGTA conducted an audit to determine whether taxpayers visiting IRS Volunteer Program sites receive quality service, including accurate tax return preparation. The resulting report recommended that the IRS continue to emphasize with volunteers the necessity of reviewing the intake sheet with taxpayers during tax return preparation to ensure that tax returns are prepared accurately. In addition, the IRS should also establish minimum due diligence standards for volunteers when preparing tax returns, TIGTA suggested.
"The IRS has taken numerous actions to ensure the integrity of volunteers," said J. Russell George, the Treasury Inspector General for Tax Administration. "The IRS must continue to train and educate volunteers so that taxpayers will receive accurate tax return preparation.”
IRS management agreed with TIGTA's recommendations. The IRS updated Form 13614-C, Intake/Interview and Quality Review Sheet, and plans to continue to emphasize training on proper intake and interview techniques. The IRS also plans to adjust volunteer training and resource materials to clarify and underscore the due diligence obligations of volunteers when preparing tax returns.
“A fundamental objective of the IRS is to promote voluntary participation within the tax system,” wrote Peggy Bogadi, commissioner of the IRS’s Wage and Investment Division, in response to the report. “The volunteer programs sponsored by the IRS help achieve that objective by providing tax return preparation and electronic filing services at no cost to those segments of the population most in need.” She pointed out that during the 2012 filing season, more than 98,000 volunteers assisted more than 3.2 million individuals with preparing and filing their federal and state income tax returns.
11 Comments
Krys:
Like all volunteer programs, there is obviously a tremendous difference in the way different VITA locations are run.
I don't know where you are, but I am in rural Ohio where the local VITA shop is run alongside the Medicaid and Food Stamp programs in a County building.
The preparers receive inadequate training, and they don't even know that they are screwing up (unlike the EIC chop shops who know but don't care).
The "agency" gets an $8 payment per return filed, and they push everyone onto a 1040-EZ to keep the numbers prepared high.
These preparers are a disaster because the people in charge are a disaster.
We could use an organization like yours here.
Are you connected to the County? State? Who is in charge of your operation?
Kate Harner, EA
Posted by: KATEHARNER | September 20, 2012 5:02 PM
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Dear Kate,
I commend you on taking the time to assist those in desperate situations at no charge.
While I certainly cannot speak for all VITA programs, I can tell you that my volunteers are not encouraged to file 1040EZ. Our IRS SPEC partner encourages us to file every return on a 1040, not a 1040A or a 1040EZ. As surprising as this may seem to others, it actually maximizes our efficiency rate.
Each VITA site is able to set the guidelines for which returns they will prepare, within the scope of VITA requirements. Again, I cannot speak for others, but our VITA sites will not accept taxpayers with more complicated returns. Any taxpayer with 1099DIV is redirected to our one and only site which prepares advanced returns. Again, they are prescreened on the phone to avoid most of the confusion at the site. Our advanced site is "staffed" by volunteers who are certified at more advanced levels. All of our advanced volunteers are CPA, graduate accounting students, retired IRS agents, etc.
Any taxpayer who is outside of the scope of our program is redirected to a paid professional. We actually have a list of professionals who are friendly with our organization and who are willing to prepare these advanced returns for low-income clients for at a lower rate.
Additionally, at each of our sites we have representatives from Advocates for Basic Legal Equality (ABLE) who are available to speak with low-income taxpayers about legal issues with the IRS.
While I can certainly understand the frustration of professionals with underprepared VITA locations, I would like to stick up for the VITA sites who DO follow tax laws and VITA guidelines. We have worked very hard in my community to provide low-income taxpayers with quality returns for free. Our volunteers work extremely hard during their extensive training and certification, and throughout the entire season.
Again, we should all be in this together instead of bashing one another. If we work together as a community, we can all benefit. I have tax accountants, CPSs, retired IRS agents, and state tax agents conduct our trainings. In return, they network with new graduates who could possibly come work with them.
Posted by: Krys | September 20, 2012 10:15 AM
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Krys:
As followers of these posts well know, I am almost obsessed with putting check-cashing EIC Chop Shops out of business. The damage they have caused is almost beyond belief, especially in fraud and identity theft.
I certainly have no such complaints about the VITA-TCE volunteers. I just don't like giving away my valuable time fixing up the returns they prepare. The low-income population they serve goes to them because they cannot pay for tax return preparation, but when they end up with CP2000s and IRS bills for thousands of dollars, they need professional help. The volunteers who made these mistakes obviously lack the knowledge to fix them.
I have actually had some psychologically disturbed VTA-TCE clients would were suicidal because of these errors. I'm certainly going to do the ethical thing and help them for free.
If these VITA-TCE agencies are being paid for each return ($8), then are their people being encouraged to prepare 1040-EZs which are not appropriate so they can maximize the grant money?
I really don't need to inherit these free VITA-TCE clients that some agency got $8 per head for.
Kate Harner, EA
Posted by: KATEHARNER | September 19, 2012 8:00 PM
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As a coordinator of the VITA program in my three counties, we have put extra precautions into place to ensure that mistakes do not happen. We screen taxpayers over the phone before scheduling their appointment to ensure that the are only going to sites which have the correct certification level of volunteers. Each volunteer is trained in what they can and CANNOT prepare. Each volunteer is certified each year!
We also maintain quality site requirements, put forth by the IRS, which require our returns to be quality checked by another certified volunteer. I am not arguing that volunteers do not make mistakes, however, we also FIX our mistakes free of charge.
As the person above stated, as a national program we had an accuracy rate of 92% last year. Also, the TIGTA report was extremely small! 39 sites nationally?!? I have over 40 sites in my three counties.
There was another question posted about whether it is free or not if the agency is getting paid. Many of the agencies are non profits. Money from the grants to run the program is used to purchase computers, printers, paper, ink, etc. Some agencies also provide a stipend for the site coordinator who is responsible for recruiting and supervising all the volunteers, reporting, quality assurance, etc. The money is also used, in our organization, to provide food for volunteers during training days and a recognition luncheon at the end of the season.
We should all be in this together. People should be able to have their taxes done. In my counties there are over 130,000 people eligible as "low to moderate" income for our service. We help about 3,000 of them. There is plenty of business to go around.
Professional, experienced tax preparers should be more concerned with the payday lenders and the Stop N Go carryouts that constantly take advantage of people for thousands! Those people are taking away your business.
Posted by: Krys | September 19, 2012 2:36 PM
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I have been involved in VITA since starting to work with Internal Revenue Service in 1986. The education provided for preparers has become laughable, partly because the people assigned to do the teaching often do not actually prepare returns, or examine individual returns. They haven't the knowledge. Last year's instructor at our military base was asked if dividends that were automatically reinvested had to be reported as income, and he said no, because they were not actually received. That's a pretty basic question to get wrong!
Posted by: dthomp | September 18, 2012 5:18 PM
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Previously for over 25 yrs, I worked full-time as Executive Director for YMCA. We appreciated all the volunteers no matter how much & what kind of help they gave us. We provided training & education with out testing & requirements. You might find some help with your volunteer program by contacting them.
I have served since 1974 as a tax preparer, etc. in many different capacties doing over a million returns free & paid. I have earned a nice income to pay the bills. I have tried to meet all IRS requirements & be a perfect tax preparer. I am planing to retired as a paid tax preparer December 31, 2013. There are to many fees, rules & requirements to continue.
I was planning to continue as a volunteer tax preparer. After reading the above, I think I will retire as a Volunteer Tax Preparer and bury my talents, knowledge, & service. There just are to many fees, rules & requirements to continue.
Sorry ! You may contact me at jmswatling@sbcglobal.net. I am very thankful for all the years of service as a tax preparer & wanted to say thank you by volunteering. Thanks, Jerry
Posted by: swatling | September 18, 2012 12:56 PM
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I am an long-term enrolled agent, and I run one of those VITA programs. In fact, we were one of the 39 (!) sites visited for the TIGTA survey. At my location, the preparer missed an item, but it was caught when the return was reviewed. The TIGTA visitor was actually quite impressed with how well the process worked.
My volunteers still attend stand-up training as well as the online training, and, unlike EAs and RTRPs, must pass certification tests EACH YEAR. (My CPA, EA, and tax attorney volunteers all have to take these tests, too.) These dedicated volunteers perform a remarkable service, and I believe it's unfair to paint such a broad-brush picture from this statistically nonexistent survey. Incidentally, the IRS showed a 92 percent accuracy rating for tax-year 2011 volunteer-prepared tax returns.
Posted by: Maggie D | September 18, 2012 10:44 AM
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Kate Harner put it very well. I, too, have seen my fair share of incorrect returns prepared by well-meaning volunteers who try to cram every scenario into one that meets their filing criteria rather than honestly telling "clients" that they do not qualify for a VITA return. With seniors, stocks and rental properties are the most common ones that I see, but income forgiveness and foreclosure of primary residence were big a couple years ago. My biggest gripe though is the VITA program at our local community college. They consistently tell students to claim their own exemption and take the AOC on their own return when it would be far better for the parents to claim them.
On one hand, the VITA preparers cut into my business, but on the other hand, they are a great source of new clients for me because I end up fixing a lot of their returns and responding to a ton of CP2000's generated as a result of their oversights. The program, in theory, is a good one. In practice, it needs A LOT of improvement.
D Kennedy EA
Posted by: trixiespishak | September 17, 2012 9:33 AM
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I have known several senior and disabled taxpayers who found their way to my office for help (at no charge) after having their lives turned upside-down by a well-meaning but incompetent VITA or TCE volunteers.
Under-trained VITA-TCE volunteers try to cram everything onto a 1040-EZ which results in lots of CP2000s for unreported Forms 1099-DIV, 1099-B and 1099-C.
Many taxpayers who would benefit from using the Capital Gains Worksheet are instead victimized by the use of Tax Tables by volunteers who don't know any better. One taxpayer was told that she didn't have to report the sale of stock.
I believe the VITA and TCE programs should be suspended until the IRS is willing to improve the training given.
Also, I discovered last year that the local County Public Assistance office is in fact being PAID through grants to do tax returns. The PREPARERS receive no income, but their EMPLOYER does - can this still be considered a "free" tax return?
Kate Harner, EA
Posted by: KATEHARNER | September 14, 2012 5:57 PM
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When I first started participating in the VITA program in the 1980's, the IRS provided a week long training session with required attendance for all volunteers. In later years, attendance was waived for experienced tax preparers. Now, all the training is online, very few training sessions are offered, and the ones that are offered are taught by other volunteers regardless of their expertise in tax law. I attended one training session where the facilitator was an IRS employee and had no experience preparing tax returns; in fact, he did not even have a college degree. Add to that the increasing complexity of the tax code and it is no wonder the returns are not accurate. Even IRS agents have trouble preparing accurate returns.
Posted by: si451 | September 14, 2012 7:41 AM
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Posted by: Care Accounting Plus | September 14, 2012 2:16 AM
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