IRS Volunteer Income Tax Assistance Program

The Volunteer Income Tax Assistance (VITA) grant program is an Internal Revenue Service (IRS) initiative designed to support free tax preparation service for the underserved through various partner organizations. This service helps low- to moderate-income individuals, persons with disabilities, the elderly, and limited English speakers file their taxes each year. IRS awards matching funds to these support organizations that offer free tax preparation services during the tax filing season at locations in all 50 states and the District of Columbia. The IRS awarded $18 million in grants for FY2019. The next IRS VITA Grant application period will open May 1, 2020 and will close May 31, 2020. Pub 4671 provides the IRS VITA Grant overview and application instructions. A list of current grantees is available here.

IRS Volunteer Income Tax Assistance Program
AbbreviationVITA
ServicesTax preparation assistance
Parent organization
Internal Revenue Service
WebsiteIRS VITA site

IRS VITA Grants are designed to help partner organizations:

  • Increase VITA services to the underserved across the country;
  • Increase the number of returns filed electronically;
  • Enhance volunteer training; and
  • Significantly improve the accuracy of returns prepared at volunteer sites.

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VITA was founded in 1971 by Gary Iskowitz at California State University, Northridge. Since the 1970s the program has grown to several thousand sites nationwide, partnering with non-profit organizations, local municipalities, and colleges and universities to file millions of returns every year. In Tax Year 2015 3.7 million returns were filed with a 94% accuracy rate according to Frank Nolden, Director of Stakeholder Partnerships, Education, and Communication/SPEC.[1] The program is intended to provide service to low to moderate-income taxpayers, which the IRS has defined as those households making less than $56,000 per year.

Returns are prepared by IRS, tax law certified volunteers. Certificates in the program start at Basic, and are followed by Advanced. In order to prepare returns, a volunteer must be certified in one of these two base levels. There are additional, optional certifications for Health Savings Accounts (HSA), Military personnel, International tax issues, Foreign Student returns, and Puerto Rico returns. Volunteers are taught how to use tax software and specific tax law issues November to January of each year, with training schedules varying based on the program. One of the focal points of the VITA program is raising taxpayer awareness and receipt of the Earned Income Credit (EIC). The average refund for taxpayers claiming the Earned Income Credit was $2,450 as of 2015.[2]

Some military bases participate in the program with IRS agents training service members to complete military tax returns. Due to the complexity of foreign students' returns, they are prepared at major public universities such as Arizona State University by more advanced experts.

Scope of Service

The IRS requires that all returns are prepared by certified volunteers. There are various tax law, and non-tax law related certifications. Each volunteer, whether they will be preparing tax returns or acting as a greeter, or intake specialist, is required to pass a volunteer code of conduct exam, and an intake interview/quality review exam. Those volunteers who wish to become tax preparers must pass one of the tax law exams mentioned previously. To be considered proficient, volunteer must score a minimum of 80% on an exam to receive a passing score. Certifications last for one tax year, then the preparer must renew their certification. The different tax law certification levels are:

Certifications
Parts of Tax Law Covered
*Not All Inclusive*
Basic - Filing and dependency status

- Basic income, such as salaries & wages, interest, and dividends

- Disability Income

- The Earned Income Credit

- Education Credits

- Disability Income

Advanced - Self-Employment Income

- Calculating the taxable amount of retirement distributions

- Sales of Stock, Bonds, or Real Estate and other Capital Transactions

- Tip Income

- Cancellation of Debt *Previously was its own certification

- Marketplace Insurance, ("Obamacare")

Puerto Rico I/II - Income and deductions relating to Puerto Rican residents,

and mainland US Residents with Puerto Rico sourced income

Health Savings

Account

 - Contributions and Distributions from Health Savings Accounts (HSA's)

- Penalties for ineligible distributions

International U.S. Citizens living abroad or with non-U.S. sourced income
Foreign Student - Non-citizen students and scholars living in the United States on

non-immigrant student visas.

Military - Rental of home due to deployment or other ordered absence

- Military Moving Expenses

There are also a number of tax topics that are "out-of-scope" for the program regardless of a tax preparer's certification. Even professionally licensed volunteers are prohibited from providing advice to taxpayers on out-of-scope topics in the capacity of a volunteer. A brief outline of the services provided by vita:

Can Prepare Cannot Prepare
  • Forms 1040 (including 1040-EZ and 1040-A) – Federal Tax Return
  • Schedule A – Itemized Deductions
  • Schedule B – Interest and Dividends
  • Schedule C/C-EZ – Business Expenses
  • Simple Schedule D – Capital Gains and Losses
  • Simple Schedule E for Royalties or income reported on Schedule K-1
  • Schedule EIC – Earned Income Credit
  • Schedule SE – Self Employment Tax
  • Form 2441 – Child Care Expenses
  • Form 8863 – Education Credits
  • Form 1040NR
  • Most State Tax Forms
  • Returns with K-1 Income, fiduciary pass-through's only
  • Form 8889 & HSA's
  • Schedule R
  • Schedule C – Business Expenses with:
    • An overall loss to report
    • Deductions for depreciation
    • Deductions for business use of the home
  • Complex Schedule D – Capital Gains and Losses
  • Schedule E – Rental Income, except for military rental income
  • Dual Status Tax Returns
  • Income from pass-through entities including:
    • S-Corporations ("Sub-S's")
    • Partnerships
  • Form 1120, 1041, or 1065
  • Schedule F - Farm Income
  • Responses to IRS Notices for issues other than an amended return
  • Tax Returns for taxpayers who have declared bankruptcy or intend to (Refer to professional) * Married Filing Separately may be treated as out of scope. * Tax For Certain Children with Unearned Income, or "Kiddie Tax" returns

References
  1. [Tax Volunteers Tax Volunteers] Check |url= value (help). Missing or empty |title= (help)
  2. . 2014-11-24 [VITA and EITC VITA and EITC] Check |url= value (help). Retrieved 2017-04-12. Missing or empty |title= (help)

1) IRS 4012 VITA/TCE Volunteer Resource Guide (2) IRS 4491 VITA/TCE Training Guide (Includes content for Military Certification) (3) IRS 5157A VITA/TCE Affordable Care Act Taxpayer Scenarios (4) IRS 4942 VITA/TCE Specialty Course-Health Savings Accounts (HSA) (5) https://apps.irs.gov/app/vita/ (6) https://www.irs.gov/individuals/choose-your-tax-volunteer-role

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