Treasury Inspector General for Tax Administration
June 29, 2016
TIGTA - 2016-18 (revised)
Contact: Karen Kraushaar, Director of Communications
WASHINGTON — The Internal Revenue Service (IRS) needs to adhere more closely to established procedures for assessing its Volunteer Tax Return Preparation Program, although program review results showed that volunteers completed accurate tax returns for taxpayers they served for the 2015 Filing Season. This is a finding in an audit report that the Treasury Inspector General for Tax Administration (TIGTA) issued today.
The Volunteer Program plays an important role in achieving the goals of improving taxpayer service and facilitating participation in the tax system. It provides no-cost Federal tax return preparation and electronic filing to underserved segments of the population, including low-income to moderate-income, elderly, disabled, and limited-English-proficient taxpayers.
TIGTA completed this follow-up review to determine whether the IRS’s Quality Statistical Sample (QSS) review program provides a sufficient evaluation of the accuracy of tax return preparation at Volunteer Program sites. More than 90,000 volunteers at 12,057 Volunteer Income Tax Assistance and Tax Counseling for the Elderly sites assisted more than 3.6 million taxpayers during the 2015 Filing Season.
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 returns that volunteers prepared. TIGTA auditors evaluated a statistically valid sample of 44 of these returns and identified that volunteers prepared most of them accurately.
However, the Quality Program Office did not perform field performance reviews as IRS procedures require during the 2014 or 2015 Filing Seasons. The IRS designs these reviews to ensure that tax analysts follow the required procedures and processes when conducting QSS reviews, including randomly selecting three tax returns that volunteers prepared.
“Without proper performance reviews, there is less assurance that results from Quality Statistical Sample site visits accurately measure the services offered through the Volunteer Program to ensure taxpayers are receiving accurate tax return preparation and quality service,” said J. Russell George, Treasury Inspector General for Tax Administration.
In addition, QSS analysts did not report all identified Quality Site Requirement errors, which resulted in their overstating the Quality Site Requirements adherence rate. TIGTA evaluated Site Review Sheets for all 103 of the 2015 Filing Season site adherence reviews that the nine tax analysts responsible for performing these reviews completed, and found that 26 (25 percent) of them incorrectly rated adherence to Volunteer Program Quality Site Requirements as being met.
TIGTA also noted sites that the Stakeholder Partnerships, Education, and Communication function incorrectly identified as inactive and did not follow processes to identify and resolve sites using an invalid Site Identification Number. For example, the function erroneously identified 162 sites as inactive (i.e., site not in operation for the 2015 Filing Season) when in fact the site was in operation and volunteers prepared tax returns there.
In addition, 130 volunteer sites used invalid Site Identification Numbers. An invalid Site Identification Number is one that the Stakeholder Partnerships, Education, and Communication system does not include. However, similar to what TIGTA reported in prior reviews, the IRS did not take action to resolve these discrepancies.
TIGTA made four recommendations in the report. The IRS agreed with the recommendations and has taken or plans to take corrective action on them.
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.