Nearly a third of the income tax returns prepared by volunteer preparers for an IRS program were incorrect, according to a report by the Treasury Department's inspector general.
The Treasury Inspector General for Tax Administration checked the accuracy of 36 tax returns prepared by participants in the Internal Revenue Service's Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs and found that 11 of the returns were prepared incorrectly.
The VITA program provides free federal tax return preparation and electronic filing to approximately 2 million low- and moderate-income taxpayers. TIGTA also found inconsistencies among the volunteer preparers in executing required procedures such as quality assurance reviews to ensure the accuracy of tax returns before filing.
Nevertheless, TIGTA did find that the accuracy rate has improved since it began auditing the VITA program during the 2004 filing season. At that time, the accuracy rate was 0 percent. For the 2008 filing season, the accuracy rate rose to 69 percent.
"While accuracy rates for tax returns prepared by these volunteers have improved, it is troubling that nearly one-third are incorrect," said TIGTA head J. Russell George in a statement. "They must do better."
TIGTA recommended that the IRS improve the documentation of its reviews of VITA sites, require volunteer applicants to disclose any criminal convictions and require sites to document whether they offer refund anticipation loans. The IRS agreed with most of TIGTA's recommendations.
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