The Internal Revenue Service needs to do a better job of assessing the performance of its Volunteer Tax Return Preparation Program, according to a new report, which nevertheless found the volunteer tax preparers completed mostly accurate tax returns this past tax season.

J. Russell George

The Volunteer Program includes both the Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. Together they offer no-cost federal tax return preparation and electronic filing to qualified low-income to moderate-income, elderly, and disabled taxpayers, and taxpayers with limited proficiency in English. More than 90,000 volunteers at 12,057 VITA and TCE sites helped more than 3.6 million taxpayers this past tax season.

The IRS evaluates the accuracy of the tax preparation services at the sites through its Quality Statistical Sample, or QSS, review program. This past tax season, QSS tax analysts reviewed 298 tax returns prepared by volunteers. For its report, TIGTA in turn evaluated a statistical sample of 44 of those returns and found the volunteers prepared most of them accurately.

However, the IRS’s Quality Program Office did not perform field performance reviews, as required under IRS procedures, during either the 2014 or 2015 filing seasons. The reviews are supposed to ensure tax analysts follow the necessary procedures and processes when conducting QSS reviews, including randomly selecting three tax returns prepared by volunteers.

“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 TIGTA Inspector General J. Russell George in a statement.

QSS analysts also did not report all the Quality Site Requirement errors they identified, and thereby overstated the adherence rate. In addition, QSS analysts incorrectly identified as inactive and did not follow processes to identify and resolve sites using an invalid Site Identification Number. The analysts erroneously identified 162 sites as inactive, that is, not in operation for the 2015 filing season, even though the sites actually were in operation and volunteers prepared tax returns there. In addition, 130 volunteer sites used invalid Site Identification Numbers.

TIGTA made four recommendations for fixing the problems discussed in the report, and the IRS agreed with them. It has taken corrective action, or plans to do so, on the suggestions. TIGTA recommended the IRS ensure at least one field performance review for each QSS analyst is performed during each filing season, and that tax analysts accurately and consistently evaluate Volunteer Program Quality Site Requirements. Territory managers or their designees should also confirm the accuracy of site operational status during each filing season as required, TIGTA recommended, and all monthly Site Identification Number reports should be generated and reviewed to identify sites using a Site Identification Number that is not in the system. 

“The IRS recognizes the importance of maintaining the integrity of the Volunteer Program and will continue to evaluate its processes to ensure adequate oversight,” wrote Debra Holland, commissioner of the IRS’s Wage and Investment Division, in response to the report.