Volunteer Tax Preparers Show Big Improvement

Volunteers who prepare income tax returns at the Internal Revenue Service’s Volunteer Income Tax Assistance Program sites improved their accuracy during the 2010 filing season, according to a new report that found a 90 percent accuracy rate, compared to only 59 percent a year ago.

The report, from the Treasury Inspector General for Tax Administration, found that 90 percent of the 39 tax returns volunteers prepared for TIGTA auditors were prepared correctly, a sharp increase from the 59 percent accuracy rate reported by TIGTA in its 2009 review. TIGTA attributed the improvement to an increase in volunteers’ use of the IRS’s Intake/Interview and Quality Review Sheet (Form 13614-C), improved training, and enhanced oversight. Only 5 percent of the 39 tax returns were prepared without use of the Form 13164-C, versus 33 percent in TIGTA’s 2008 filing season review, and 22 percent in its 2009 filing season review.

The VITA program provides no-cost federal tax return preparation and electronic filing for individual taxpayers who are low- to moderate-income, elderly, disabled, or have limited English proficiency. TIGTA reviews the program each year to determine whether taxpayers receive high-quality and accurate service when visiting VITA tax preparation sites. More than 87,000 volunteers prepared approximately 3.1 million tax returns during the 2010 filing season at 12,326 sites around the country. TIGTA auditors posed as taxpayers at 17 sites during this review.

“This report is a positive indication of the good work that the IRS is doing for America’s taxpayers,” said TIGTA Inspector General J. Russell George in a statement. “I commend the IRS on the progress it has made in helping volunteers accurately fulfill the very important task they assumed.”

TIGTA made four recommendations to the IRS in its report, and the IRS agreed with all four recommendations. TIGTA recommended that the IRS revise the check sheet at the volunteer sites to ensure that volunteers and site coordinators understand the process and that the required signs are posted. The report also said the IRS should ensure that any referrals reporting improper activities are properly documented, investigated and resolved. In addition, the IRS should try to reduce or eliminate the amount of paper produced at the VITA sites, and revise a managerial check sheet used for Quality Statistical Sample Reviews to include a focus on tax return selection and documentation standards.