VITA: On Congress’ radar screen

U.S. Rep. Tammy Duckworth (left) – here visiting with Center for Economic Progress Tax Site Manager Denise Bauch at a program in suburban Chicago – has joined nearly 50 Congressional colleagues in calling for strong VITA resources.

It’s good to see the value of VITA reemerging in key federal policy communications recently – the product of strong efforts by advocates and Congressional champions alike.

For example, as lawmakers begin to focus on budget decisions, nearly 50 of them have personally endorsed the need to ensure strong resources for Volunteer Income Tax Assistance in Fiscal Year 2014.

New proposals for strengthening tax credits, working families

Tax credits that help working families make ends meet should be treated as no less important than tax benefits exclusive to the very wealthiest of households. In fact, they’re even more critical to the overall stability of our nation’s economy.

Thus, NCTC has obtained the signatures of more than 300 local, state, and national organizations for a letter supporting new legislation to protect and strengthen the Child Tax Credit (CTC) and (EITC).

The biggest error: Losing paid-prep regs

An estimated two-thirds of taxpayers claiming the Earned Income Tax Credit (EITC) turn to commercial preparers for help filing their tax returns.

However, basic Internal Revenue Service (IRS) regulation of such preparers – setting minimum training and licensing standards – was halted by a federal district court judge in January. That makes the latest report on improper EITC payments particularly frustrating.

The costs of being “free”

FREE!! The first thought that comes to mind when I see the word “free” is “Ooh lalala.” I usually get a euphoric feeling especially if the good or service is something I value. As a consumer, I get to save money and it allows the opportunity to take that money and use it for something else. That’s great!

But who really pays for it to be “free”? Usually when something is marketed as “free”, it is the consumer who receives it for free. Someone still has to pay to provide that service or create the good. So that service or good may be free for the consumer, but the business still has to pay for it.

VITA = tax simplicity = tax reform

Strengthening VITA should be among the first orders of business for any federal tax reforms prioritizing “simplicity,” according to comments NCTC submitted to Congress on Tax Day.

The working families who would benefit from improvements in Volunteer Income Tax Assistance also need policymakers to bolster targeted tax credits as well as important savings policies, we added.

A budgetary bright spot for VITA

President Obama’s call for substantially bolstering VITA reflects important recognition of the program’s great value to struggling taxpayers – and the VITA field’s strong advocacy efforts. And while chances of its enactment as-is are practically nil, it nonetheless challenges us to strengthen our advocacy work.

The federal matching grant for Volunteer Income Tax Assistance would grow to $18 million in Fiscal Year 2014, under the budget proposal the President unveiled Wednesday. That’s up from its $12 million level of recent years.