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Should the IRS Kill VITA Altogether?

September 24, 2009 · 29 comments

Shortly after I posted this piece about IRS cutting ties with ACORN, I received an email asking me, among other things, if I thought this was a good thing and if we should “get rid” of the VITA program altogether because of the potential for giving bad advice. I didn’t immediately respond to the email because I wanted to give it some thought. And then I thought it that it might my response be worth sharing. So here’s my take on the whole mess:

I absolutely think that the IRS decision to cut ties with ACORN’s VITA program was a good one. But not because a couple of folks gave bad tax advice – if that were the criteria, there are quite a number of tax preparers that would be out of a job. Rather, it’s because I share Commissioner Shulman’s concern that: [i]t is absolutely critical that taxpayers have trust in our Volunteer Income Tax Assistance program partners. I don’t think that’s the case right now – and that’s why stepping away was a good thing.

As to the question of whether the VITA program should be canned altogether – I couldn’t be more vehement that I think that’s a terrible idea. The implication in the email was that the population which is being served might have “complicated” tax issues that can’t be properly addressed by volunteers; the further implication was that those tax issues might be related to fraud.

I understand where that’s coming from because I saw the video and it was distressing to see that the ACORN staffers didn’t even flinch at some of the information delivered by the potential “taxpayers.” But that shouldn’t be interpreted as the norm.

A little explanation about VITA may be in order. First of all VITA, which stands for Volunteer Income Tax Assistance, offers free tax help to low- to moderate-income taxpayers. Being poor or living paycheck to paycheck isn’t a crime. Don’t be misled by a staged video (and yes, while I think the reaction was terrible, the video was clearly a set up) to believe that the only folks who would seek free tax help are those who want to commit fraud. These are people, for the most part, who want to pay their taxes. They want to be compliant.

Last year, VITA volunteers prepared 2.8 million tax returns, or about 2% of the total individual returns filed. These taxpayers were seniors, students, single parents… It well could have been you and I. They were also military – the military has a very active VITA program. Our Navy, Army, Marines, Air Force and National Guard – and their families – can get free tax assistance from volunteers who understand issues that matter to military personnel, like combat zone tax benefits, through VITA.

So the market that VITA serves is broad base that includes many, many good people. I can’t stress enough how unfair it would be to assume that those seeking free help are cheats.

As far as the character and competence of the volunteers go, I can speak to that firsthand. For years, I helped coordinate the VITA site at our local senior center. The volunteers at our center were first rate – many were actually tax attorneys, accountants and tax preparers who just wanted to give something back to the community. Others were retirees, engineers, students, bankers… you name it. Just good folks who gave up their time to help other people. Those folks received training which generally included how to prepare returns, new developments (like the rebate checks from last year) in tax law that affect taxpayers, and how to use the IRS tax prep software – there’s even a test! Additionally, there are supervisors on site to help out with more difficult questions – and hotlines to call when there are problems.

It’s a really wonderful program. Are there problems? Of course there are. Do folks occasionally screw up? Sure. Does that happen almost anywhere? Absolutely. I dare you to find one tax prep service that has never, ever made a mistake. You can’t.

I would encourage you to find out more about VITA if you have questions – and perhaps even become a volunteer. Don’t let some edited video and some bad behavior by ACORN color your impression of the more than 100,000 people who show up every tax season to try and do the right thing.

{ 25 comments… read them below or add one }

1 Sherra September 24, 2009 at 11:30 pm

Yay Taxgirl! “More than 100,000 people who show up every tax season to try to do the right thing” – exactly. Last year was my first year as a VITA volunteer. The supervisors made sure that the more experienced volunteers got the complicated returns, and I only got the ones with just W-2′s and Social Security income, at most. Everything was checked thoroughly, records were kept, and taxpayers got a phone call immediately afterward if the supervisors discovered a problem. Not to mention the money that these taxpayers saved by going to VITA instead of a paid preparer – a return that took me 20 minutes had cost one taxpayer (with just one W-2) $180 at H&R Block the previous year.

2 Ralph Lee September 25, 2009 at 2:33 am

Thanks for sharing your anecdote. I looked briefly at the IRS website on VITA and it appears that VITA is run only in partnership in local organizations. Do you have a reference or suggestion in Orange County, CA?

3 Odetta September 25, 2009 at 3:30 am

As a coordinator of a VITA site, I just wanted to say THANK YOU for this post. There has been so much negative information shared and this has inspired fear and doubt in individuals. The VITA program is a great program for those individuals that do not have the resources to pay a tax preparer for services that should be free, but don’t feel confident enough to prepare their own taxes due to the nature of tax law changes and the underlying fear of the Internal Revenue Service. All employees and volunteers of VITA sites have to go through certification yearly and are subject to IRS monitoring. ACORN has been on a downward spiral for a while and the incidents across the East Coast are poor reflections of what the Volunteer Income Tax Assistance services are about.

4 Mike Piper September 25, 2009 at 7:38 am

“These are people, for the most part, who want to pay their taxes. They want to be compliant. ”

In my experience, that’s not true for taxpayers as a whole. (Not making any income/economic distinctions here.) Granted, this is entirely anecdotal, but from what I’ve seen most people cheat in some way from time to time. It freaks me out how frequently I hear in conversation “oh, I wasn’t going to report that.”

Either way, I’m absolutely with you that VITA is, for the most part, a wonderful program and that it would be a shame to see it go.

5 Eddie Parsons September 25, 2009 at 8:41 am

I totally disagree with you about saying the video was a set up. This idea that two young people revealed the corruptness of ACORN was a setup misses the whole purpose of the VALIANT EFFORT made by these two 20 year olds. They exposed the kind of people ACORN were using for their organization. Nothing in their video was trying to show that people who employ free tax help are corrupt or that all those who offer free tax help are corrupt. I don’t know how you logically could deduct that from what they did. I just want to say the these young people put their lives on the live to help America see what some organizations in this country are getting away with. I personally think everyone of good character should stand up and say to them “THANK YOU FOR LOOKING OUT FOR US” !

6 My Journey September 25, 2009 at 9:25 am

I 100% agree with Eddie about ACORN.

But beyond that I think the VITA program is a great one. Most people who utilize the services of the volunteers truly need free help. To get rid of it would be akin to destroying every pro bono program out there, why do it?

7 Ralph Lee September 25, 2009 at 1:01 pm

Nothing in their video was trying to show that people who employ free tax help are corrupt or that all those who offer free tax help are corrupt. I don’t know how you logically could deduct that from what they did.

I don’t think Kelly made this mental connection; I just re-read her blog post and she said it was a reader e-mail.

For what it’s worth, I think ACORN does some good things and some bad things. In particular, they’ve done a fair amount of advocacy for the underprivileged. I’m not sure they’re deserve to be thrown under the bus.

8 Mary Kay Foss September 25, 2009 at 1:56 pm

I occasionally amend returns for seniors who normally have returns done by VITA volunteers. These situations are so few and far between that I think the program is doing an incredible job in helping taxpayers.

The last time I worked with someone who had a problem with VITA was when a couple decided not to take their IRA RMDs one year. The volunteer didn’t ask them about it or suggest a way to mitigate penalties but those were technical issues that many paid tax preparers might miss.

9 Eddie Parsons September 25, 2009 at 4:27 pm

No Ralph–at the end of paragraph one Kelly says “here’s my take on the whole mess” and proceeds in her words. I’ m not trying to be picky here, but I do enthusiastically endorse what these two kids did. ACORN has gotten away with a lot of corruption including voter fraud which is the very foundation of our trust in our government. If our voting is going to be corrupted then we might as well not worry about our tax system. It will be corrupted too! Sorry, I make no apologies for what I said–it still stands. We are only at the tip of the iceburg with this case. Anyone or any organization that corrupts America should be investigated and lets face it the American media is in Obama’s pocket with the exception of “talk radio and Fox News”.
There is no excuse for letting this corrupt organization off the hook nor any other organization be it liberal or conservative. Corruption of any kind destroys the fabric that makes up a Republic. Again what these kids did was courageous, bold, and we are all better off for showing us what responsibility being an American citizen really means. The American media should be ashamed because at one time we figured they were the watchdogs of Freedom. Now we find them corrupted by self-interest and not for justice and the American Way–which they no longer no anything about!

10 Bill Winterberg September 25, 2009 at 4:50 pm

Keep in mind that VITA volunteers are specifically instructed not to prepare returns that contain “out-of-scope” items. VITA publications and training materials are very specific concerning what topics volunteers are qualified to complete.
If a VITA volunteer is found to assist with OOS items, he or she is no longer protected by the Volunteer Protection Act of 1997 and is subject to personal liability for the OOS advice given or prepared return.

11 Kelly September 25, 2009 at 6:31 pm

Eddie, Ralph’s interpretation was correct. I was responding to an email that implied that people who seek out free tax help are disproportionately seeking to cheat the government and that people who help them are more than happy to assist with the fraud in order. The specific examples given related to stimulus checks and the Earned Income Credit, each of which, admittedly have received their fair share of negative press when it comes to cheating – including from this blog and in interviews that I have given. However, Mike’s point about equal opportunity cheating is well made and I do not agree that folks who seek out free tax help are more likely to cheat.

12 Jeff Day September 25, 2009 at 11:16 pm

Well now who am I to disagree? Of course I thnk that IRS and everyone else should fire ACORN and probably hundreds go to prison for all types of crimes.

Relative to the VITA Program, I would love to carry on a discourse with people that support it. I am bitterly oppossed to that program. I think that very few people should prepare their own tax returns online. I think that at least one third of the persons that prepare tax returns should be out of the business immediately. I think half of the others should be no more or no less than assistants to the ones that should prepare returns.

Three years ago, I volunteered my time as a VITA preparer, because the 163rd National Guard went to IRAQ. It was my duty to do something as little as it might be to help those that would risk their lives for our freedoms. I prepared aproximately 75 returns for military through that program.

There is no where near enough training for those volunteers. I imagine there is no small percentage of viewers on your blog, that can prepare many family tax returns correctly. It is my responsibility to prepare the most advantageous tax returns that are within the law for all citizens.

Can/should a 19 yr old girl who makes aproximately 12,000 a year that is not in school that lives with her parents claim her 16 yr old sister on her tax return as a dependent/child tax credit/earned income credit. She did not provide over 50% of the support of the sister. My question is concerning 2005-2008 tax returns. The answer for 2009 is perhaps different. If a preparer says no way, then they need to get out of the business and not prepare any more “simple” returns.

If parents have four children ages 19, 17, 16, 15. The 19 yr old is not in school and lived all year with the parents and the siblings. The 19 yr old made $8,000. She did not provide 50% support of any of the siblings. Dad made aproximately $35,000 and mom did not work outside of the home. Can/should the 19 yr old claim any of the siblings on her 2008 tax return? Remember I said the answer would be different on a 2009 tax return. If you do not prepare the return that the 19 yr old claims the 17 yr old on her tax return as a dependent and earned income credit, you should never ever again prepare a tax return for simple returns. No on 2009 returns she can not claim the 17 yr old.

Neither of those examples are “out of scope”, but guaranteed these examples would almost always be prepared not in the best interests of the families within the laws at all VITA locations.

Anyone disagrees with me, feel free to write: jad012547@yahoo.com
Perhaps I could help you realize why you need to amend prior year tax returns and get the benefits your taxpayers were/are entitled.

Jeff Day EA
Evansville, IN 47710

13 Jeff Day September 25, 2009 at 11:32 pm

I should have also commented, I support the commissioner relative to all preparers being licensed. I would increase the requirements to prepare returns greatly.

However, would love to see a discourse also on why it should be illegal for lawyers/judges to determine in a divorce/support case how the children should be claimed on tax returns. I can’t imagine how many times I have seen a divorce decree that was beneath contempt in those regards.

Then it becomes very difficult to get taxpayers to understand when it is in the best interest of the families if they can agree, they do not have to conform to the degree.

14 Bill Winterberg September 26, 2009 at 12:38 am

@Jeff

The answers to both scenarios are found on page C-4 of 2008 Publication 4012, which all VITA volunteers should have in their possession. The taxpayers get to decide who gets to claim the qualifying child exemptions. If they cannot decide, the IRS applies tiebreaker rules.

15 Jeff Day September 26, 2009 at 1:04 pm

Bill you already obviously know that I know you are correct.

But the problem isn’t what you or I or any other preparer know, but does the person preparing the return know how and do a good job probing? Do you think the family if they prepare their own return online have any idea?

But the problem is, if the parents came into a typical VITA or even a professional preparers office. And they told the preparer that they had 3 children they wanted to claim on the tax return, would the preparer probe and find out one of the children should be on the tax return of another child they didn’t even mention? If they don’t in my example you just cost that family aproximately $3000.00

In the first example, the parents don’t even file a tax return. Both parents were on social security disablity only. The 19 yr old comes into a typical preparers desk and has one W2 only and expects some of the withholding taxes back. Entirely too many prepares both VITA and professional will never probe and find out she can legally claim her sister. How is it possible if she files online on any website in existence she is legally entitled to the $5000 that she is entitled?

The 2009 rules changed and says the 19 yr old has to have a higher AGI than the parents. But if the parents only income is Social Security and therefore none of it is taxable. Is their AGI not zero? Can she not claim her sister again in 2009?

I was in Dallas, Texas @ IRS forum couple weeks ago. I was in a focus group with 11 other preparers and there were 3 preparers there that said that for the sibling to claim the 19 yr old had to provide 50% support. Now you would think they should be the best of the best if they were @ such a forum.

My mother used to say that to prepare tax returns a good preparer has to be a “snoop”. She was correct. Tax returns should not be prepared by anyone other than those that have a talent of probingl, no matter how simple it seems the return is.

Jeff Day

16 Jim Howard September 26, 2009 at 4:03 pm

One correct concerning the ‘edited video’. The full unedited start to finish videos and full written transcripts of all the ACORN interviews are available on line at http://biggovernment.com/ .

VITA isn’t a bad program, but it is good that ACORN is out of it.

I wonder if Jackson-Hewitt and H&R Block will continue to donate to ACORN? Both companies started donating shortly after ACORN started sending in large groups of ‘volunteers’ to disrupt some of their tax offices.

17 Eddie Parsons September 26, 2009 at 10:04 pm

Sorry Kelly I don’t mean any disrespect–But it seems your words was your take on it” –still appears that way to me, but I’ll take your word for it . The wording above that caused my response really obscures whose saying what then is all I’ve got to say. Perhaps there was some prior writings that I missed. Again no disrespect to you–but “WHOEVER SAID IT WAS A SETUP” missed the true point, and that is the object of my response. But I don’t want it to be taken that I am against tax help for those who truly need it, but let’s all be for genuine and lawful help. ACORN has done itself in, not the people who are seeking genuine honest help.

18 Bill September 27, 2009 at 7:19 am

I ran a VITA site for two years at an Air Force base on the East Coast.

My nightmare was when people previously had their taxes done by (well-known tax preparation franchises) in prior years. A significant number of those customers would throw fits when I told them (in CY 2005 and 2006):

1. No, you can’t include your textbook costs as an expense for the education credit, unless they were fees payable to the institution as a condition of attendance.
2. No, you can’t include (the price of your computer/Internet costs) as an expense or the education credit, unless they were fees payable to the institution as a condition of attendance.
3. No, you can’t include tuition costs paid by the military as an expense for the education credit. You didn’t incur the expense, so…
4. Offsets: If you got $1000 in VA educational benefits and your tuition was $1300, you have $300 in expenses toward the education credit. If you got $1300 from VA and paid $1000 in tuition, you have $0 in expenses toward the education credit.

Some would get outraged and say “why are you denying this? (insert firm) let me take that!”

I would respond that I wasn’t denying them anything; that was up to IRS…but that I would not knowingly prepare an improper return.

Short version: In my experience, we tried to do the right thing. Based on customer anecdotes, the tax franchises either missed elementary issues or would put anything down that made the customer happy.

19 Kelly September 27, 2009 at 8:02 am

No problem, Eddie. Apparently, I was confusing.

To be clear, I DO think the video was a set up. Those were my words. I DO think that the filmmaker, rightly or wrongly, set out to make a point and was going to go about it until he did it. The fact that he went to many, many ACORN offices before finding this one, clearly impersonating someone that he wasn’t, says to me that he was hoping for a certain result – and he got it. Like Michael Moore cornering CEOs for his flicks, it’s a set up.

But the bit about the VITA clientele and VITA volunteers being more likely to commit fraud – that was in an email that I was responding to.
Sorry for the confusion.

20 Eddie Parsons September 27, 2009 at 10:43 am

Thank you Kelly for claryifying who said what–I didn’t want to infer it was you if it was someone else. But lets explain something here –there were more than one office where ACORN is committing crimes. There may also be more videos on the way. More than one was willing to engage in sex trafficking with girls 13 and 14 years from El Salvadore. Kelly I know you are a mother and I responded one time to you when you offered a young lady advice because she was being taken advantage of by her boyfriend. You did the right thing. The right thing in this case was what these 2 young peoplc did by exposing a corrupt organization. Perhaps not all the people in ACORN are corrupt –I certainly would hope not, but to extent ACORN was willing to engage in sex slavery appalls me to no end. I have a young daughter and I feel no mercy toward this organization. Now offering people tax help as our discussions here do and you do a marvelous job –that’s one thing –but remember that you as a mother and me as a father–that’s first in our lives and when I saw these 2 young people expose these corrupt people I offer my praise and thanks to them. Setup or not –I don’t care –what they did was a GOOD THING.

21 Kay September 27, 2009 at 11:53 am

great post. I cited in my blog, but I obviously do not know how to get a trackback to show up on your site. Hence, this note. Thanks for the sane analysis of a very good IRS program.

22 Jim Howard September 27, 2009 at 11:54 am

“The fact that he went to many, many ACORN offices before finding this one, clearly impersonating someone that he wasn’t, says to me that he was hoping for a certain result’

It wasn’t just one office, it was several. Plenty enough to show a pattern.

23 Eddie Parsons September 28, 2009 at 8:35 am

True Jim-because they knew there was corruption in ACORN–I’m sure they as I thought that not every office would go as far as the ones in the video, but that these people who engaged in this wrongdoing displayed, there was push in this direction, that is, to get around the law at taxpayers expense. ACORN first thanked the couple for what they did in an ingenuine display of remorse what had happened and then a day or two later filed suit against them. They were sorry they got caught, not for the wrongdoing on their part.

24 Joe Mastriano, CPA November 30, 2010 at 2:56 pm

I think the VITA program should stay. Anyone is capable of making mistakes on tax returns. For people who can’t afford professional fees, it’s better to risk preparation from VITA then a low cost tax factory! After 30 years of preparing returns, we sometimes make mistakes too. O.K. , well I do. Marie says she doesn’t. At least our returns are not audited. Knock on wood! We occasionally tell people that the IRS will prepare their return for free. At least it will get done. There are too many non filers that still exist.

25 Susan April 2, 2014 at 2:05 pm

2014 VITA RETURNS WERE WRONG! I caught it before my Mother sent them in. Ok, here’s the thing. I asked intelligent questions and was given soft unsure answers about e-file and a payment schedule. They were guessing, and so were the supervisors (who was a Property Manager Bookkeeper as a day job). My late Father’s USPS Survivor Benefits were taxable, and the twits didn’t even look it up. They accused the 2012 tax return of being wrong, It was correct, they were screwing up. They didn’t have SS income on the state return for some reason. Both returns weren’t correct. The tax software would not let my mother e-file, and when I kept digging, they were not very happy about my well thought out questions. I was making them unsure of their feeble knowledge base. All young college kids, which I believe get 24 hour training. Although no itemized deductions, the pension was out of their league, and not one VITA volunteer would cop to it. AARP trains ADULTS, who do a better job. We are going back to the Senior Ctr. I heard the AARP has a 30 day training program, and really gets the cream of the crop retirees.
I read on a CPA site, VITA’s error rate was 41%, but haven’t confirmed it.

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