Treasury Inspector General for Tax Administration
June 14, 2012
TIGTA - 2012-22
Contact: David Barnes
WASHINGTON - The Internal Revenue Service (IRS) should take additional steps to ensure that its Volunteer Income Tax Assistance Grant Program reaches more underserved taxpayers, according to a report released publicly today by the Treasury Inspector General for Tax Administration (TIGTA).
The IRS's Volunteer Income Tax Assistance (VITA) Grant Program has become a significant component of the IRS's Volunteer Program. One-third of the tax returns prepared by the Volunteer Program are prepared by VITA Grant Program grantees. TIGTA's overall objective was to determine whether the VITA Grant Program is achieving its purpose of extending services to underserved populations in hard-to-reach areas, both urban and rural.
TIGTA determined that the VITA Grant Program has established appropriate guidelines to ensure grant funds are distributed according to the law and regulations. From Fiscal Years 2009 to 2011, the number of grantees grew 61 percent (from 111 to 179 grantees), and the number of tax returns prepared by grantees grew 38 percent (from 786,058 to 1,080,875). However, much of this growth appears to be a transition to the VITA Grant Program rather than overall growth in the Volunteer Program.
Analysis of the 51 grantees that received VITA Grant Program funding for Fiscal Years 2009 through 2011 showed that 21 (41 percent) did not reach 90 percent of their tax return preparation goals but received increased funding in the subsequent year. In addition, taxpayers with incomes over the thresholds for free tax return preparation had tax returns prepared by the VITA Grant Program. Nine percent of the tax returns prepared by the VITA Grant Program in Calendar Year 2009 and 6 percent in Calendar Years 2010 and 2011 were for taxpayers with incomes over the income threshold.
"While the IRS collects data to select grantees and allocate awards in the VITA program, our study found that the Service is not using those data to determine where to market the program and what underserved geographic areas need more coverage," said J. Russell George, Treasury Inspector General for Tax Administration.
TIGTA recommended that the IRS use current data to develop measures and goals and establish a baseline against which future performance can be measured to ensure the VITA Grant Program is meeting the legislative intent of extending services to underserved populations and hardest-to-reach areas. These data would assist the IRS in targeting its recruitment efforts to new partners assisting the underserved populations and by establishing performance measures for the individual grantees to determine if they are meeting the Program's objectives and goals.
In their response to the report, IRS officials agreed to continue analysis of available data to ensure the VITA Grant Program is meeting legislative intent. However, the IRS did not address the establishment of a baseline for the VITA Grant Program in its response. Without a baseline, it will continue to be difficult for the IRS to determine what underserved geographic areas need more coverage.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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