Running a Successful Volunteer Income Tax Assistance Program

This is my sixth year in the Volunteer Income Tax Assistance Program (VITA) in Berrien County.  The last four of those years have been as the county's volunteer coordinator for the program.  Many of the VITA programs are sponsored by non-profit agencies:  United Ways, Community Action Agencies, even DHS offices.  Accountants and non-profits use different terminology.  I still like to call the folks we serve our "tax clients."   The non-profit organization that sponsors our volunteers often refers to our tax assistance as "clinics."   The latter term still sounds more like something a doctor or nurse does and little like what a financial person or accountant does.

In the last several years, the average federal adjusted gross income of the households we serve has hovered around $12,000 or $13,000 per year. Adjusted gross income does not include certain governmental benefits, such as, Supplemental Security Income (SSI), food assistance (Bridge Card), and for our lower earning clients does not include any Social Security or Social Security Disability.   Thus, the average household income might be slightly higher if it included these benefits.   My guess is that it would not be significantly higher, but only somewhat.   (These benefits are included in Household Income for calculation of Michigan homestead or renter's credit or Home Heating Credit.  Unfortunately, the tax software used by VITA sites does not readily lend itself to maintaining statistics on Michigan Household income.)

The non-profits which sponsor VITA programs are always anxious to serve more clients (i.e., to hold additional clinics.)   I concur with this goal.  Personally, I am always disappointed that we have to turn some clients away, especially early in the tax season when many folks want to get their tax refunds, since we do not have enough time nor volunteers to serve everyone.

On the other hand, I wanted to share some of my thoughts on how much more important it is to maintain a quality VITA site rather than just focusing on the numbers of clients served.  Please let me give you an anecdote or two to sharpen this point.

My first client six years ago was a young single mother with her two year old toddler in tow.  I arrived a little late at the tax site and volunteers had already started tax preparation an half hour or so earlier.  It was about 5:00.  So, I helped the young lady complete her Intake papers which provide basic financial information about her taxes:  demographic information as well as the client's income and expenses, deductions and credits.

We did not get to the young lady's tax return until after 9:00 that evening.  Mind you, she sat there with her little two year old the entire time.  The kid was probably better than most of the adults who were also waiting.  At just before 10:00 that evening, the custodian in the building where we were working came in and said we had 10 minutes to clear the building before the night alarm came on.  So, I was unable to complete the young lady's tax return.  I apologetically asked the young lady to come back in a few days for the next tax clinic and told her that she would not have to wait to complete her return.

I must have thought a lot about the young woman in the next few days.  It kept rolling over in my mind as to why she was not getting as big a refund back as one would expect.  I was determined to arrive early to check out her return to see if there was something wrong or incomplete.  Indeed, I had forgotten to check one box on the return which told the tax software that she qualified for the earned income credit (EITC).   One box unchecked would cost her a couple thousand dollars.  (I don't remember the young lady's income, but I am sure it was under $20,000, probably well under.  So, $2,000 is a huge amount to someone like her.)

Unfortunately, in the meantime, the inexperienced site coordinator had electronically filed her return.  The site coordinator was simply trying to follow IRS rules which say that returns should be e-filed within 48 hours of their completion.  The problem was the return was not complete.  But it was e-filed anyway.

A month or more later, the young woman returned to the VITA site and expressed frustration that her refund was much less than expected.  A couple thousand dollars less.  Being a newbie, I was not aware that the return had been e-filed.  The site coordinator was not aware that it had been e-filed before being completed. Thus, the only thing we could do for the young woman at that time was file an amended return.  The refund of her EITC was delayed by perhaps a couple months because of our error.

There are other examples that I could bring forward, but I hope you get the point as to the importance of training and appropriate site coordination of volunteers.

Here are some other tips that I would like to offer on running a quality VITA site:

1.   Give Adequate Time For Training

From my experience, the IRS's volunteer training takes 15-18 hours of class time with a competent, tax instructor before a volunteer is ready to complete tax returns:  basic tax returns or IRS form 1040A type returns. The 15-18 hours of training is probably a minimum.  Add several more hours of training if you want to ensure volunteers are trained at the intermediate level or higher and have training in the tax software and on state tax returns.

2.  Ensure Training Instructors Understand the Tax Software and the Types of Returns Being Prepared.

In my first year as a volunteer preparer, I had been a member of the Michigan Association of CPAs (MACPA) for something like 25 years.  Over the years, I had attended many MACPA tax workshops.  None of which prepared me to assist the clients we serve at VITA sites.  In CPA workshops, one discusses capital gains, depreciation, and all kinds of complicated tax situations which primarily relate to high earner clients.  VITA clients, by definition, are not high earners. CPAs for the most part focus their tax practices on wealthier clients who can afford their fees and not on lower earning clients who may not be as profitable

Over the year, I have learned more and more each year about the Tax Wise tax software that we use at VITA sites.  Each year, I learn something new.   Trust me.  Checking the EITC box on the tax software is very important to me.  In southern Berrien and Cass Counties, we serve quite a few tax clients who cross the Indiana/Michigan border to work for employers in Indiana.  The W2 information entered into Tax Wise does not properly flow to the Indiana 1040RNR tax return.  It has to be entered manually.  Otherwise, the return is not correct.   There are similar nuances on the Michigan returns.

The IRS Link and Learn training has NO training for Michigan, Indiana, Ohio, or any other state taxes.  It is solely federal tax training.

Fortunately, the metro-Detroit Accounting Aid Society has developed a training module for Michigan taxes.  If you are not using that, please ensure that your volunteer tax trainer has included a module on Michigan Homestead/Renter's credit, the Home Heating Credit and other unique aspects of Michigan returns.

3.  Make Sure Site Coordinators Are Experienced and Reviewing Returns

New VITA volunteers make mistakes.  Lots of them.  Even experienced preparers make mistakes.  Having an experienced site coordinator who is checking tax returns prepared by the volunteers is essential to a quality site.  In my opinion, a site coordinator should have at least two or more years of experience as a VITA volunteer and should be certified to complete at least intermediate level tax returns or higher.   (In Berrien County, about 75% of our tax returns are "basic" returns. Another 20% require someone with intermediate training.  The remaining 5% or so of returns need more advanced or specialty training (for instance, debt cancellation, foreign student or international income training).

In my sixth year of Volunteer Income Tax Assistance volunteering I am still learning.  But the one thing that I learned from my very first client is that we need to do a better job of treating every client with dignity and respect and ensuring that we provide them with a quality tax return that is prepared accurately and filed in a timely manner.

Saturday, we had a learning disabled client who was reduced to tears when her volunteer preparer told her that she and her newly wed husband were not going to get a refund this year.  In reviewing her return, I discovered that the volunteer, who is in his third year of volunteering and is not a newbie, had double entered her family's SSI.

I look forward to seeing this couple again next year.  I hope that she tells her friends that we took the time to listen and to get her return prepared accurately.

P.S.  Please feel free to call the United Way of SW Michigan, after tax season when we are not so busy, if I can offer any additional tips to your non-profit on running a VITA program. 

By the way, I never saw my first tax client again.  So let me say to the young lady, who happened to be Hispanic:   perdóname