2151 112th CONGRESS
H. R. 2151
To facilitate nationwide availability of volunteer
income tax assistance for low-income and underserved populations, and for other
purposes.IN THE HOUSE OF REPRESENTATIVES
Mr. HONDA introduced the following bill; which was referred
to the Committee on Ways and Means
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 of 2011'.
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 2009
Federal income tax filing season, VITA programs filed 1,200,000 Federal income
tax returns and prepared more than 400,000 returns for the earned income tax credit
(EITC), helping program recipients claim $1,600,000,000 in Federal tax refunds.
An estimated 25 percent of households eligible for the EITC do not claim the credit.
(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 $1,800,000 a year in return
processing costs. In 2009, clients of VITA programs electronically filed their
tax returns at a much higher rate (92 percent) than the general population (68
(5) Not only do electronic returns cost the
Internal Revenue Service considerably less to process ($0.35 per return) than
paper returns ($2.87 per return), but electronic returns also generate a low error
rate of 2.5 percent compared to 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.
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
(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.
number of tax returns prepared by the VITA program increased 155 percent between
the 2004 (500,000) and 2009 (1,200,000 returns) tax filing seasons.
(10) The demand on this integral community service continues to rise due to the
current economic downturn and VITA programs are experiencing strained resources
and limited capacity.
(11) During the 2009 tax filing
season, taxpayers applied for 9,900,000 refund anticipation loans and spent an
estimated $733,000,000 in fees. Refund anticipation loans are especially prevalent
among low- and extremely low-income taxpayers. Free tax preparation programs serve
over 3,000,000 taxpayers each year, thereby reducing reliance on these other costly
(12) In fiscal year 2009, 379 organizations
applied to the Internal Revenue Service for over $30,000,000 in grant funding
through the VITA program, and 147 received grants at a median grant of $35,000.
RETURN PREPARATION PROGRAM- The term `qualified return preparation program' means
(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.
(A) IN GENERAL- The term `qualified
entity' means any entity which--
described in subparagraph (B),
is in compliance with Federal tax filing and payment requirements,
(iii) is not debarred or suspended from Federal contracts, grants, or cooperative
(iv) agrees to provide
documentation to substantiate any matching funds provided under the VITA grant
(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
(III) a State
government agency, but only if no other eligible organization is available to
assist the targeted population or community,
(iv) 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 adjusted gross 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.
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.
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,
in the provision of tax preparation services to low-income taxpayers and underserved
(C) an ability to train program
leadership and staff,
(D) capacity to disseminate
information throughout the United States, and
(i) maintain a Web site
through which information is disseminated in an easily accessible manner, and
(ii) to provide technical assistance and training through Web-based technologies.
(6) SECRETARY- The term `Secretary' means the Secretary of the Treasury or the
SEC. 4. GRANTS TO FACILITATE NATIONWIDE
AVAILABILITY OF VOLUNTEER INCOME TAX ASSISTANCE FOR LOW-INCOME AND UNDERSERVED
(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.
(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
(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 adjusted gross 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
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--
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
related to financial literacy, asset development, and the establishment of savings
accounts in connection with tax return preparation.
(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 2012, 2013, 2014, 2015, and 2016, 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
(3) AVAILABILITY- Amounts appropriated pursuant
to the authority of paragraph (1) shall remain available without fiscal year limitation
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
(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
(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.
(A) IN GENERAL- The Secretary shall--
designate, through a competitive process, one qualified entity to be the lead
national organization, and
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).
(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--
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
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--
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.
(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
(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.
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
(c) Authorization of Appropriations-
(1) IN GENERAL- For each of fiscal years 2012, 2013, 2014, 2015, and 2016, there
are authorized to be appropriated $5,000,000 to carry out the purposes of this
(2) AVAILABILITY- Amounts appropriated pursuant
to the authority of paragraph (1) shall remain available without fiscal year limitation