Ensuring High-Quality, Affordable Assistance for America’s Taxpayers: Highlights of the Volunteer Income Tax Assistance Program’s 2011 Efforts
The National Community Tax Coalition (NCTC) is the nation’s leading coalition of non-profit, voluntary entities providing free tax preparation assistance and financial services to low-income individuals and families.
NCTC is dedicated to strengthening economies, building communities and improving lives through tax assistance and asset building activities that produce financial security, protect families and promote economic justice.
Overview of Volunteer Income Tax Assistance (VITA)
VITA sites offer free tax preparation assistance to low- and moderate-income taxpayers and provide tax-specific information to help hard working Americans comply with the federal and state tax codes. Additionally, many VITA programs provide assistance to taxpayers who desire financial education, opportunities to save and access to other essential community services and supports. More than 52,000 community VITA volunteers prepare basic tax returns for low-income taxpayers with a focus on at least one specific underserved group, including persons with disabilities, non-English speaking persons, Native Americans, rural taxpayers and the elderly. According to the most recent data provided by the Internal Revenue Service, community VITA sites prepared approximately 1.3 million tax returns across 5,700 sites during the 2011 tax filing season and brought back more than $1.9 billion in tax refunds to taxpayers whose average Adjusted Gross Income (AGI) was $21,000.
The National Community Tax Coalition, with its 2,100 members across the nation, has focused heavily in recent years on extending services to underserved populations and hardest-to-reach areas. Additionally, the VITA field is committed to increasing electronic filing capacity, heightening quality control, enhancing training of volunteers and significantly improving the accuracy rate of returns prepared by VITA sites.
The VITA Quality Framework: Compliance, Efficiency, Accuracy and Affordability
Recent efforts to improve quality of VITA services reinforce the following fundamental components of the VITA framework:
- Strong Compliance among Underserved Taxpayer Populations –VITA programs are committed to reaching out and educating underserved taxpayer populations to ensure increased compliance among low- and moderate-income taxpayers in the timely and accurate filing of annual tax returns.
- Significant decrease in administrative burden and costs associated with operating the federal tax return process. VITA services also result in decreased administrative burden on the IRS as well as significant cost-savings related to annual tax return processing. For example, the IRS strongly encourages the electronic submission of annual federal tax returns because electronic filing results in a tremendous savings of $3.10/return over paper submissions. Over 92% of returns prepared by community VITA sites are electronically completed, compared to only 69% of all taxpayers submit their tax returns electronically. Thus, community VITA’s primary use of electronic submission saves the IRS approximately $4 million in administrative costs every year.
- Ensuring Accurate Completion of Tax Returns: Independent evaluations of VITA have consistently reported a higher accuracy rate on average in terms of successfully completed tax returns than any other subcategory of available tax preparations services. A recent evaluation conducted by the Internal Revenue Service confirmed that during 2011, the accuracy rate for preparing individual 2010 tax returns at community VITA sites rose two percentage points from last year to 85%*. Accuracy is determined by correctly computing the tax liability.
- Furthering the Best Interests of Taxpayers through Access and Affordability: VITA programs provide a free, safe alternative to the commercial tax preparation chains as well as to untrained and unlicensed tax preparers who often target low-income filers during tax time. During the 2011 tax filing season, community VITA programs saved taxpayers claiming the Earned Income Tax Credit an estimated average $80 million in paid preparer fees. This is money that went back into the hands of workers and local economies. VITA sites often serve as a critical portal to assisting low-income taxpayers from underserved communities with other asset development and financial education services in addition to tax preparation.
- Preservation of High Quality Standards: In order to maintain consistently high-quality standards across the field, VITA volunteers undergo extensive training and testing annually prior to serving taxpayers. Additionally, NCTC provides technical assistance on innovative strategies and disseminates information on the most promising practices in the tax preparation field to VITA sites across the country to ensure the highest quality standards are being implemented nationwide.
*Internal Revenue Service. “FY2011 Quality Statistical Sample (QSS) Review Results.” August 2011.
By Dan Fair, Manager of Communications & Member Relations