IRS Volunteer Programs To Assist Taxpayers in Return Preparation

GAO reviewed the Volunteer Income Tax Assistance Program and the Tax Counseling for the Elderly Program. The data which the Internal Revenue Service (IRS) gathers on its volunteer programs was incomplete, and discrepencies between IRS figures and the information GAO acquired occurred because not all volunteer-prepared returns were sent to IRS with the proper code to enable them to be identified as having been prepared by a volunteer. Also, IRS did not have information which showed the number of instances in which volunteers provided advice only. The error rate of returns prepared by volunteers compared favorably with the error rate for all returns prepared by individuals, but drawing conclusions regarding the quality of these returns could be misleading because of the lack of complete data. There were some staffing shortages at the centers serving low income clients. Legislation authorizing tax counseling for the elderly directs the IRS to provide training, technical assistance, and expense reimbursement to volunteers assisting individuals 60 years of age and older in preparing their Federal tax returns. IRS will not have complete data on the program this year to measure program impact. Program volunteers often also provided assistance in the preparation of State and local tax returns. Although State offices offer State tax return preparation help, taxpayers at most the sites GAO visited said that the availability of Federal, State, and local service at the same site was a convenient and energy-saving practice.