113 S1368 IS: Volunteer Income Tax Assistance (VITA) Act
U.S. Senate
2013-07-25
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
Volunteer Income Tax Assistance (VITA)
Act
.
2.Congress makes the following
findings:
(1)Community
Volunteer Income Tax Assistance (VITA) programs offer tax preparation and
related financial services, free of charge, to middle- and low-income
individuals and families. The majority of individuals served by VITA programs
have annual household earnings below $40,000.
(2)During the 2012
Federal income tax filing season, VITA programs filed 1,600,000 Federal income
tax returns and prepared more than 505,000 returns for the earned income tax
credit (EITC), helping program recipients claim $2,200,000,000 in Federal tax
refunds. One in five taxpayers who were eligible to claim the EITC failed to do
so.
(3)VITA programs
assist underserved taxpayers, including low-wage workers, persons with
disabilities, the elderly, Native Americans, rural populations, and taxpayers
with limited English proficiency.
(4)Volunteer tax
preparation programs save the Internal Revenue Service an estimated $5,500,000
a year in return processing costs. In 2012, clients of VITA programs
electronically filed their tax returns at a much higher rate (95 percent) than
the general population (82 percent).
(5)Not only do
electronic returns cost the Internal Revenue Service considerably less to
process ($0.17 per return) than paper returns ($3.66 per return), but
electronic returns also generate a low error rate of 2.5 percent compared with
a 25 percent error rate for paper returns. Low error rates reduce the need for
the Internal Revenue Service to correspond with taxpayers and for taxpayers to
resubmit paperwork.
(6)The use of
technology in meeting the needs of taxpayers with physical, sensory, or
cognitive disabilities is essential to the success of the VITA program, as
demonstrated through the expanded use of innovative assistive technology and
strategies intended to expand free tax preparation for deaf and hearing
impaired taxpayers. These innovative uses of assistive technologies should
continue to be replicated and tested to expand capacity of VITA programs in
successfully meeting the needs of taxpayers with various disabilities.
(7)An Internal
Revenue Service survey has shown that very low-income taxpayers are twice as
likely as the general population to visit a Taxpayer Assistance Center and half
as likely to use the Internal Revenue Service Web site. Volunteer tax
preparation programs serve as an accessible and cost-effective alternative to
other Internal Revenue Service channels.
(8)Internal Revenue
Service estimates from fiscal year 2005 found that the volunteer preparation
program cost $12.01 per contact, while Taxpayer Assistance Centers and assisted
toll-free calls averaged $28.73 and $19.46 per contact, respectively.
(9)The number of tax
returns prepared by the VITA program increased 220 percent between the 2004
(500,000) and 2012 (1,600,000 returns) tax filing seasons.
(10)The demand on
this integral community service continues to rise as the Nation recovers from
the significant economic downturn of recent years and VITA programs are
experiencing strained resources and limited capacity.
(11)In fiscal year
2013, 333 organizations applied to the Internal Revenue Service seeking more
than $27,900,000 in grant funding—more than double the available
resources—through the VITA program, and 206 received grants at a median grant
of approximately $38,500.
3.As used in this Act:
(1)Qualified return
preparation programThe term qualified return preparation
program
means any program—
(A)which provides
assistance to individuals, not less than 90 percent of whom are low-income
taxpayers, in preparing and filing Federal income tax returns, including
schedules reporting sole proprietorship or farm income,
(B)which is
administered by a qualified entity,
(C)in which all of
the volunteers who assist in the preparation of Federal income tax returns meet
the training requirements prescribed by the Secretary, and
(D)which uses a
quality review process which reviews 100 percent of all returns.
(2)
(A)The term qualified entity
means any entity
which—
(i)is
described in subparagraph (B),
(ii)is
in compliance with Federal tax filing and payment requirements,
(iii)is
not debarred or suspended from Federal contracts, grants, or cooperative
agreements, and
(iv)agrees to provide
documentation to substantiate any matching funds provided under the VITA grant
program.
(B)An entity is described in this subparagraph if such
entity is—
(i)an
institution of higher education which is described in section 102 (other than
subsection (a)(1)(C) thereof) of the Higher Education Act of 1965 (20 U.S.C.
1088), as in effect on the date of the enactment of this section, and which has
not been disqualified from participating in a program under title IV of such
Act,
(ii)an
organization described in section 501(c) of the Internal Revenue Code of 1986
and exempt from tax under section 501(a) of such Code,
(iii)a
State or local government agency, including—
(I)a
county or municipal government agency,
(II)an Indian tribe,
as defined in section 4(12) of the Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4103(12)), including any tribally
designated housing entity (as defined in section 4(21) of such Act (25 U.S.C.
4103(21))), tribal subsidiary, subdivision, or other wholly owned tribal
entity, and
(III)a State
government agency, but only if no other eligible organization is available to
assist the targeted population or community,
(iv)a
local, State, regional, or national coalition (with one lead organization which
meets the eligibility requirements of clause (i), (ii), or (iii) acting as the
applicant organization), or
(v)a
Cooperative Extension Service office, but only if no other eligible
organization is available to assist the targeted population or
community.
(3)The term low-income taxpayer
means a
taxpayer who has an income which does not exceed 250 percent of the poverty
level, as determined in accordance with criteria established by the Director of
the Office of Management and Budget.
(4)The term underserved population
includes populations of persons with disabilities, persons with limited English
proficiency, Native Americans, individuals living in rural areas, and the
elderly.
(5)Lead national
organizationThe term lead national organization
means an organization described in section 501(c) of the Internal Revenue Code
of 1986 and exempt from tax under section 501(a) of such Code which has
demonstrated, to the satisfaction of the Secretary—
(A)capacity in a
minimum of 15 States, territories, or tribal areas,
(B)expertise in the
provision of tax preparation services to low-income taxpayers and underserved
populations,
(C)an ability to
train program leadership and staff,
(D)capacity to
disseminate information throughout the United States, and
(E)capacity
to—
(i)maintain a Web
site through which information is disseminated in an easily accessible manner,
and
(ii)provide technical
assistance and training through Web-based technologies.
(6)The
term Secretary
means the Secretary of the Treasury or the
Secretary’s delegate.
4.Grants to
facilitate nationwide availability of volunteer income tax assistance for
low-income and underserved populations
(a)The Secretary, through the Internal Revenue Service,
shall establish a Community Volunteer Income Tax Assistance Matching Grant
Program (hereinafter in this section referred to as the VITA grant
program
). Except as otherwise provided in this section, the VITA grant
program shall be administered in the same manner as the Community Volunteer
Income Tax Assistance matching grants demonstration program established under
title I of division D of the Consolidated Appropriations Act, 2008.
(b)
(1)The Secretary shall make available grants under the VITA
grant program to provide matching funds for the development, expansion, or
continuation of qualified return preparation programs assisting low-income
taxpayers and members of underserved populations.
(2)In
order to be eligible for a grant under this section, a qualified return
preparation program shall submit an application to the Secretary at such time,
in such manner, and containing such information as the Secretary may reasonably
require for each fiscal year.
(3)In
awarding grants under this section, the Secretary shall give priority to
applications—
(A)demonstrating
assistance to low-income taxpayers, with emphasis on outreach to and services
for persons with an income at or below 250 percent of the Federal poverty
level, as determined in accordance with criteria established by the Director of
the Office of Management and Budget,
(B)demonstrating
taxpayer outreach and education around available income supports and refundable
credits such as the earned income tax credit under section 32 of the Internal
Revenue Code of 1986, and
(C)demonstrating
specific outreach and focus on one or more underserved populations.
(4)Qualified return preparation programs receiving a grant
under this section may use the grant for—
(A)ordinary and
necessary costs associated with program operation in accordance with Cost
Principles Circulars as set forth by the Office of Management and
Budget,
(B)outreach and
educational activities relating to eligibility and availability of income
supports available through the Internal Revenue Code of 1986, such as the
earned income tax credit, and
(C)services related
to financial education and capability, asset development, and the establishment
of savings accounts in connection with tax return preparation.
(5)
(A)Except as provided in subparagraph (B), a grant awarded
under this section shall be for a period of 1 year and shall not be renewed
other than through an application under paragraph (2).
(B)The Secretary may award a grant under this section for a
period of not more than 3 years to any qualified return preparation program
which—
(i)received a grant
under this section for the preceding year, and
(ii)received a score
of 90 percent or better on a technical evaluation.
(c)
(1)The
Secretary shall promote the benefits of, and encourage the use of, tax
preparation through the Volunteer Income Tax Assistance program through the use
of mass communications, referrals, and other means.
(2)Internal revenue
service referralsThe Secretary may refer taxpayers to qualified
return preparation programs receiving funding under this section.
(3)Qualified return preparation programs receiving a grant
under this section are encouraged to refer, as appropriate, to local or
regional Low Income Tax Clinics individuals who are eligible to receive
services at such clinics.
(d)Authorization of
Appropriations
(1)For each of fiscal years 2014, 2015, 2016, 2017, and
2018, there are authorized to be appropriated $30,000,000 to carry out the
purposes of this section.
(2)From
the funds appropriated under paragraph (1) for any fiscal year, the Secretary
shall reserve not more than 3 percent for administration of the program.
(3)Amounts
appropriated pursuant to the authority of paragraph (1) shall remain available
without fiscal year limitation until expended.
5.National center
to promote quality, excellence, and evaluation in volunteer income tax
assistance
(a)National center
to promote quality, excellence, and evaluation in volunteer income tax
assistance
(1)There
is hereby established the National Center to Promote Quality, Excellence, and
Evaluation in Volunteer Income Tax Assistance (hereinafter in this section
referred to as the Center
).
(2)The
Center shall—
(A)promote the
adoption of a universally accessible volunteer training platform for the
preparation of Federal income tax returns,
(B)provide
capacity-building technical assistance to qualified return preparation program
managers,
(C)identify and
disseminate best practices related to tax site management emerging from States,
community-based organizations, nonprofit providers, and local government
entities,
(D)support outreach
and marketing efforts to encourage the use of qualified return preparation
programs receiving funding under section 4, and
(E)provide evaluation
of programs and activities funded under this Act, including—
(i)identification,
both in aggregate and disaggregate, of gaps in services for low-income
taxpayers and underserved populations, and
(ii)independent
evaluation of progress toward program objectives, as defined by the
Secretary.
(3)
(A)The Secretary shall—
(i)designate, through
a competitive process, one qualified entity to be the lead national
organization, and
(ii)provide an annual
grant to the lead national organization designated under clause (i).
(B)Duties of lead
national organizationThe lead national organization shall use
funds provided through the grant in subparagraph (A)(ii) to—
(i)carry out the
purposes of the Center, and
(ii)make subgrants as
provided in subsection (b).
(b)
(1)The lead national organization shall make available
subgrants to eligible organizations to facilitate specialized technical
assistance in reaching one or more underserved populations.
(2)For purposes of this subsection, the term
eligible organization
means any organization which—
(A)is described in
section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code,
(B)has, to the
satisfaction of the lead national organization, demonstrated expertise and
evidenced-based practices in specialized outreach to, and service of, one or
more underserved populations, and
(C)has, to the
satisfaction of the lead national organization, demonstrated expertise in the
provision of specialized technical assistance relating to qualified return
preparation programs for one or more targeted underserved populations.
(3)In
order to be eligible for a subgrant under this subsection, an eligible
organization shall submit an application to the lead national organization at
such time, in such manner, and containing such information as the lead national
organization may reasonably require for each fiscal year.
(4)An eligible organization which receives a subgrant under
this subsection shall assist the Center by—
(A)providing
technical assistance to qualified return preparation programs with targeted
outreach and assistance to one or more underserved populations, and
(B)including
strategies for the provision of technical assistance targeting individuals and
families with annual household earnings at or below 250 percent of the poverty
line within the underserved populations served by the subgrant.
(5)
(A)Each year, the lead national organization shall make
available subgrants which, in the aggregate, do not exceed 40 percent of the
grant received under subsection (a).
(B)Of the amount of subgrants provided under
subparagraph (A)—
(i)not
less than 25 percent shall be dedicated to specialized technical assistance in
serving taxpayers with disabilities,
(ii)not
less than 25 percent shall be dedicated to specialized technical assistance in
serving limited English speaking taxpayers, and
(iii)not less than 25
percent shall be dedicated to specialized technical assistance in serving
Native American taxpayers.
(6)A subgrant awarded under this subsection shall be for a
period of 1 year and shall not be renewed other than through an application
under paragraph (3).
(c)Authorization of
Appropriations
(1)For each of fiscal years 2014, 2015, 2016, 2017, and
2018, there are authorized to be appropriated $5,000,000 to carry out the
purposes of this section.
(2)Amounts
appropriated pursuant to the authority of paragraph (1) shall remain available
without fiscal year limitation until expended.