By Frank Byrt
College students, eager to get a taste of the accounting profession, are once again turning out to assist low-income taxpayers file their tax returns through the IRS Volunteer Income Tax Assistance (VITA) program.
Launched in 1971, the on-campus program's goal is to provide a valuable community service and a hands-on learning experience for students.
Student volunteers, typically undergraduate and graduate accounting students, receive rigorous certification training at their schools and via an IRS online website. Students then take an exam to become IRS-certified volunteers who provide free basic income tax return preparation with electronic filing to taxpayers who qualify.
Generally, the program is meant to serve people who make $51,000 or less; need assistance in preparing their own tax returns; or are eligible for special tax credits, such as the Earned Income Tax Credit, the Child Tax Credit, and the Credit for the Elderly or the Disabled.
"The IRS has strict standards we have to abide by," William Dilla, an associate professor of accounting who oversees the VITA program at Iowa State University
, told AccountingWEB. "And anybody who volunteers at a VITA site nowadays – even just to greet clients at the door – has to know the IRS conduct standards."
Those conduct standards include behaving professionally and maintaining the confidentiality of client data. "And having an online program means that our client data is up on the Cloud and not on student computers where someone may see it," he said.
"Everything we do is under the guise of IRS assistance and rules," echoed Dennis Raible, MBA, CPA
, former IRS agent, accounting lecturer, and VITA program leader at St. Joseph's University
Tales of an Undercover Tax Client
In my senior year of college, I worked for H&R Block during the spring tax season. Block saw the VITA program as potential competition, and so I helped design a set of bogus documents and was then sent "undercover" to the VITA location on campus. I worked with a student who prepared *my* tax return using the fake documents.
My instructions from Block were not to volunteer any information (for example, my character was running a small contract business in addition to having two W-2 forms) unless specifically questioned.
The student who was assigned to help me was inexperienced and didn't ask the right questions, so my report back to my boss at Block was that there was nothing to worry about in terms of competition.
But competition isn't what VITA is about, and Block should have known that from the start. VITA is about helping people who can't afford to pay a tax preparer or who don't know where to turn for tax help. It might not always be the final solution for some taxpayers, but it's a place to start.
– Gail Perry, CPA, Publisher/Editor-in-Chief, AccountingWEB
The IRS has a series of procedures VITA preparers must go through for returns that have the potential for mitigating errors, Raible told AccountingWEB. For example, the taxpayer and the tax preparer must complete the lengthy Form 13614-C, Intake/Interview & Quality Review Sheet. Working through the questionnaire form should result in the disclosure of a typical lower-income taxpayer's potential sources of income, deductions, and credits, he said.
The VITA program at Utah's Brigham Young University (BYU)
has one of the highest participation rates nationally, preparing as many as 2,000 returns annually. This year, 292 student volunteers are in the program, including 40 senior members, who serve in managerial and oversight roles, reviewing others' returns, and answering questions, Jacob Hager, BYU's VITA site coordinator
, told AccountingWEB. Volunteers typically work at least two hours a week, have taken a tax class at BYU, and have or are seeking the required IRS certification.
The majority of the returns are prepared for BYU students, followed by university employees and members of the local community, Hager said.
In situations where taxpayers encounter unanticipated tax issues, the VITA preparers provide them with explanations, Hager added. For instance, people who are paid as independent contractors can often be surprised to learn that their employer did not deduct taxes from their paychecks throughout the year, which is likely to result in a lower tax refund if one is due.
Occasionally, taxpayers have returns that are too complex for student volunteers to handle, he said. When that happens, taxpayers are advised to seek a professional tax preparer.
Hager said students find being a VITA preparer worthwhile, not only in interacting with people in a real-world environment, but because the experience "also plays pretty well on a resume."