Treasury Inspector General for Tax Administration
Office of Audit
BETTER ADHERENCE TO PROCEDURES IS
NEEDED TO ACCURATELY ASSESS
THE VOLUNTEER TAX RETURN PREPARATION PROGRAM
Final Report issued on June 17, 2016
Highlights of Reference Number: †2016-40-045 to the Internal Revenue Service Commissioner for the Wage and Investment Division.
IMPACT ON TAXPAYERS
The IRSís Volunteer Program plays an important role in achieving the goals of improving taxpayer service and facilitating participation in the tax system.† The program provides no-cost Federal tax return preparation and electronic filing to underserved segments of individual taxpayers, including low- to moderate-income, elderly, disabled, and limited-English-proficient taxpayers.†
WHY TIGTA DID THE AUDIT
This follow-up review was completed to determine whether the IRSís Quality Statistical Sample (QSS) review program provides a sufficient evaluation of the accuracy of tax return preparation at Volunteer Program sites.† Over 90,000 volunteers at 12,057 Volunteer Income Tax Assistance and Tax Counseling for the Elderly sites assisted over 3.6 million taxpayers during the 2015 Filing Season.
WHAT TIGTA FOUND
The IRS established processes and procedures for selecting volunteer sites and volunteer-prepared tax returns for review.† During the 2015 Filing Season, QSS tax analysts completed 298 tax return reviews of volunteer-prepared returns, and the TIGTAís evaluation of a statistically valid sample of 44 of these returns identified that 42 (95 percent) were accurately prepared by the volunteers.†
However, we found that the Quality Program Office was not performing field performance reviews as required during the 2014 or 2015 Filing Seasons.† These reviews are designed to ensure that tax analysts follow required procedures and processes when conducting QSS reviews, including randomly selecting three volunteer-prepared tax returns.
In addition, we identified that QSS analysts are not reporting all identified Quality Site Requirement errors, which resulted in the Quality Site Requirements adherence rate being overstated.† We evaluated site review sheets for all 103 of the 2015 Filing Season site adherence reviews completed by the nine tax analysts responsible for performing these reviews and found that 26 (25 percent) incorrectly rated adherence to Volunteer Program Quality Site Requirements as being met.
Finally, we identified sites that were incorrectly identified as inactive, and processes to identify and resolve sites using an invalid Site Identification Number (SIDN) are still not followed.† For example, we identified 162 sites that were erroneously identified as inactive (i.e. site not in operation for the 2015 Filing Season) when in fact the site was in operation and preparing tax returns.† In addition, we identified 130 volunteer sites that used an invalid SIDN.† An invalid SIDN is a site identification number that is not included in the Stakeholder Partnerships, Education and Communication system.† However, similar to what we reported in prior reviews, actions were not taken to resolve these discrepancies.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS ensure: 1) at least one field performance review for each QSS analyst is performed during each filing season; 2) tax analysts accurately and consistently evaluate Volunteer Program Quality Site Requirements; 3) Territory managers or their designees confirm the accuracy of site operational status during each filing season as required; and 4) all monthly Site Identification Number reports are generated and reviewed to identify sites using a Site Identification Number that is not in the Stakeholder Partnerships, Education and Communication system.† The IRS agreed with the recommendations.
READ THE FULL REPORT
To view the report, including the scope, methodology, and full IRS response, go to: †
E-mail Address: ††TIGTACommunications@tigta.treas.gov
Phone Number:†† 202-622-6500