Volunteer Income Tax Assistance (VITA) Act - Directs the Secretary of the Treasury, through the Internal Revenue Service (IRS), to establish a Community Volunteer Income Tax Assistance Matching Grant Program (VITA grant program) for the development, expansion, or continuation of volunteer tax preparation programs to assist low-income taxpayers and members of underserved populations.
Establishes the National Center to Promote Quality, Excellence, and Evaluation in Volunteer Income Tax Assistance. Requires such Center to: (1) promote the adoption of a universally accessible volunteer training platform for the preparation of federal income tax returns, (2) provide technical assistance to tax return preparation program managers, (3) identify and disseminate best practices related to tax site management, (4) support outreach and marketing efforts, and (5) provide evaluation of programs and activities funded under this Act.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1368 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1368
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
July 25, 2013
Mr. Brown (for himself, Mr. Udall of New Mexico, Mr. Rockefeller, and
Mr. Menendez) 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 $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.
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
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) 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 2014, 2015, 2016,
2017, and 2018, 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 2014, 2015, 2016,
2017, and 2018, 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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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