[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 193 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 193

     To facilitate nationwide availability of volunteer income tax 
 assistance for low-income and underserved populations, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 23, 2017

 Mr. Brown (for himself and Mr. Coons) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
     To facilitate nationwide availability of volunteer income tax 
 assistance for low-income and underserved populations, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Volunteer Income Tax Assistance 
(VITA) Act''.

SEC. 2. FINDINGS.

    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 $54,000.
            (2) During the 2016 Federal income tax filing season, VITA 
        programs filed more than 3,800,000 Federal income tax returns. 
        This included more than 714,000 returns for the earned income 
        tax credit (EITC), helping program recipients claim 
        approximately $1,100,000,000 in earned income tax credits on 
        their Federal tax refunds. One in every 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) In 2016, clients of VITA programs electronically filed 
        their tax returns at a much higher rate (96.5 percent) than the 
        general population (86.4 percent).
            (5) Electronic returns cost the Internal Revenue Service 
        considerably less to process ($0.22 per return) than paper 
        returns ($4.09 per return).
            (6) The high rate of electronic filing by VITA programs 
        saves the Internal Revenue Service millions of dollars each 
        year.
            (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 100 percent between the 2014 (1,900,000 returns) and 
        2016 (3,800,000 returns) tax filing seasons.
            (10) During tax filing season 2016, 298 organizations 
        applied to the Internal Revenue Service seeking more than 
        $24,300,000 in grant funding through the VITA program, an 
        amount which was more than double the available resources, and 
        210 organizations received grants at a median grant of 
        approximately $40,000.

SEC. 3. DEFINITIONS.

    As used in this Act:
            (1) Qualified return preparation program.--The 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) Qualified entity.--
                    (A) In general.--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) Entity described.--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 
                        Act, and which has not been disqualified from 
                        participating in a program under title IV of 
                        the Higher Education Act of 1965,
                            (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(13) of the Native American 
                                Housing Assistance and Self-
                                Determination Act of 1996 (25 U.S.C. 
                                4103(13)), including any tribally 
                                designated housing entity (as defined 
                                in section 4(22) of such Act (25 U.S.C. 
                                4103(22))), tribal subsidiary, 
                                subdivision, or other wholly owned 
                                tribal entity, and
                                    (III) a State government agency, 
                                but only if no other entity described 
                                in this subparagraph 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 entity described in this 
                        subparagraph is available to assist the 
                        targeted population or community.
            (3) Low-income taxpayers.--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) Underserved population.--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 organization.--The 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) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.

SEC. 4. GRANTS TO FACILITATE NATIONWIDE AVAILABILITY OF VOLUNTEER 
              INCOME TAX ASSISTANCE FOR LOW-INCOME AND UNDERSERVED 
              POPULATIONS.

    (a) In General.--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) Matching Grants.--
            (1) In general.--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) Application.--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) Priority.--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) Use of funds.--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) Duration of grants.--
                    (A) In general.--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) Extended grants.--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) Promotion and Referral.--
            (1) Promotion.--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 referrals.--The Secretary may 
        refer taxpayers to qualified return preparation programs 
        receiving funding under this section.
            (3) VITA grantee referral.--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) In general.--For each of fiscal years 2017, 2018, 2019, 
        2020, and 2021, there are authorized to be appropriated 
        $30,000,000 to carry out the purposes of this section.
            (2) Reservation.--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) Availability.--Amounts appropriated pursuant to the 
        authority of paragraph (1) shall remain available without 
        fiscal year limitation until expended.

SEC. 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) Establishment.--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) Purpose.--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) Administration.--
                    (A) In general.--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 organization.--The 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) Subgrants.--
            (1) In general.--The lead national organization shall make 
        available subgrants to eligible organizations to facilitate 
        specialized technical assistance in reaching one or more 
        underserved populations.
            (2) Eligible organization.--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) Application.--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) Use of funds.--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) Subgrant amount.--
                    (A) In general.--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) Underserved populations.--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) Duration of subgrants.--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) In general.--For each of fiscal years 2017, 2018, 2019, 
        2020, and 2021, there are authorized to be appropriated 
        $5,000,000 to carry out the purposes of this section.
            (2) Availability.--Amounts appropriated pursuant to the 
        authority of paragraph (1) shall remain available without 
        fiscal year limitation until expended.

SEC. 6. NATIONAL SERVICE PROGRAMS TO PROVIDE TAX PREPARATION 
              ASSISTANCE.

    (a) VISTA.--Section 103(a) of the Domestic Volunteer Service Act of 
1973 (42 U.S.C. 4953(a)) is amended--
            (1) in paragraph (12), by striking ``and'' at the end;
            (2) in paragraph (13), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(14) in connection with tax preparation assistance 
        programs for low-income and older individuals and families, 
        particularly Volunteer Income Tax Assistance and Tax Counseling 
        for the Elderly programs.''.
    (b) National Service Senior Corps.--Section 225(b) of the Domestic 
Volunteer Service Act of 1973 (42 U.S.C. 5025(b)) is amended by adding 
at the end the following:
            ``(17) Programs that promote financial literacy and 
        financial empowerment, such as through providing tax 
        preparation assistance to low-income or elderly individuals.''.
    (c) AmeriCorps.--Section 122(a)(5)(B) of the National and Community 
Service Act of 1990 (42 U.S.C. 12572(a)(5)(B)) is amended--
            (1) in clause (x), by striking ``and'' at the end;
            (2) by redesignating clause (xi) as clause (xii); and
            (3) by inserting after clause (x) the following:
                            ``(xi) carrying out tax preparation 
                        assistance programs for low-income and older 
                        individuals and families, particularly 
                        Volunteer Income Tax Assistance and Tax 
                        Counseling for the Elderly programs; and''.
    (d) National Civilian Community Corps.--Section 157(a)(1) of the 
National and Community Service Act of 1990 (42 U.S.C. 12617(a)(1)) is 
amended by striking ``urban and rural development'' and inserting 
``rural and urban development, including improving financial 
capabilities of urban residents through tax assistance programs''.
    (e) Social Innovation Funds Pilot Program.--Section 198K(f)(3) of 
the National and Community Service Act of 1990 (42 U.S.C. 12653k(f)(3)) 
is amended--
            (1) in subparagraph (G), by striking ``or'' at the end;
            (2) in subparagraph (H), by adding ``or'' at the end; and
            (3) by adding at the end the following:
                    ``(I) financial literacy for low-income and older 
                individuals and families, particularly through 
                assisting low-income and older individuals and families 
                with tax preparation;''.
    (f) Notification From the Internal Revenue Service.--
            (1) In general.--The Secretary of the Treasury, acting 
        through the Commissioner of Internal Revenue, shall provide 
        notification to any eligible organization (as defined in 
        paragraph (3)), at such time and in such manner as is 
        determined appropriate by the Secretary, that such organization 
        may be eligible for additional assistance through programs 
        which are administered by the Corporation for National and 
        Community Service, including--
                    (A) the National Service Trust program under 
                subtitle C of title I of the National and Community 
                Service Act of 1990 (42 U.S.C. 12571 et seq.);
                    (B) the National Civilian Community Corps Program 
                under subtitle E of title I of the National and 
                Community Service Act of 1990 (42 U.S.C. 12611 et 
                seq.);
                    (C) the Volunteers in Service to America program 
                under part A of title I of the Domestic Volunteer 
                Service Act of 1973 (42 U.S.C. 4951 et seq.);
                    (D) the Social Innovation Funds grant program under 
                part III of subtitle H of title I of the National and 
                Community Service Act of 1990 (42 U.S.C. 12653k);
                    (E) the Volunteer Generation Fund program under 
                section 198P of the National and Community Service Act 
                of 1990 (42 U.S.C. 12653p); and
                    (F) the National Senior Service Corps programs, 
                including the Retired and Senior Volunteer Program, 
                under title II of the Domestic Volunteer Service Act of 
                1973 (42 U.S.C. 5000 et seq.).
            (2) Notification.--The notification described in paragraph 
        (1) shall provide resources for eligible organizations to apply 
        to programs described in such paragraph and direct such 
        organizations to materials available on the public website of 
        the Corporation for National and Community Service. The Chief 
        Executive Officer of the Corporation for National and Community 
        Service (or the Chief Executive Officer's designee) shall 
        prepare those resources and materials.
            (3) Eligible organization.--The term ``eligible 
        organization'' means--
                    (A) a qualified entity which administers a 
                qualified return preparation program that receives or 
                has received a grant from the Commissioner of Internal 
                Revenue; or
                    (B) an organization which enters into or has 
                entered into an agreement with the Secretary of the 
                Treasury under section 163 of the Revenue Act of 1978 
                (26 U.S.C. 7804 note) to provide tax counseling 
                assistance for elderly individuals in the preparation 
                of their Federal income tax returns.
    (g) Matching Funds Requirements.--Section 121(e)(2) of the National 
and Community Service Act of 1990 (42 U.S.C. 12571(e)(2)) is amended by 
striking ``laws)'' and inserting ``laws, but including funds made 
available under the Community Volunteer Income Tax Assistance Matching 
Grant Program established under section 4 of the Volunteer Income Tax 
Assistance (VITA) Act.''.
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