Volunteer Tax Preparers Have High Error Rates

Volunteers who prepare tax returns for free through the IRS’s Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs prepared nearly half the returns inaccurately, according to a new report.

The report, by the Treasury Inspector General for Tax Administration, found that 41 percent of the tax returns were prepared inaccurately by volunteers when TIGTA auditors anonymously visited volunteer sites around the country to gauge the preparers’ proficiency.

The IRS’s VITA and TCE programs provide free federal tax preparation and electronic filing services to low- and moderate-income taxpayers, the elderly, the disabled, and those who have limited English proficiency, but those services are questionable when the returns aren’t prepared correctly.

“In order to properly serve taxpayers who qualify for free tax return preparation programs, the IRS must ensure that volunteer tax return preparers are properly trained,” said TIGTA Inspector General J. Russell George in a statement.

TIGTA recommended that the IRS analyze the accuracy of returns prepared at individual volunteer sites to identify patterns and concerns on which to focus education, training and accountability. The report also suggested that the IRS improve the intake sheet that is used at the start of the tax prep process to include questions based on new tax laws and filing status, and improve the reviews of intake sheets and returns completed at volunteer sites.

In response, the IRS agreed with most of TIGTA's recommendations, but did not agree to analyze accuracy trends at each volunteer site, claiming that it lacks the resources to conduct additional reviews.