Volunteer IRS Sites Prepare 50% of Tax Returns Incorrectly

VITA Sites Still Preparing Tax Returns Incorrectly
VITA Sites Still Preparing Tax Returns Incorrectly

In a follow up to a report by the Treasury Inspector General for Tax Administration (TIGTA), free income tax preparation sites have made no significant gains in increasing the accuracy of the tax returns they prepare. The new report states that Volunteer Income Tax Assistance sites (VITA) who prepare income tax returns for low/moderate-income, elderly, disabled and limited-English-proficient taxpayers are still filing approximately 50% of tax returns incorrectly!

Of the 39 tax returns prepared for auditors during the 2013 filing season, 20 of them (or 51 percent) were prepared correctly, while 19 (or 49 percent) were prepared incorrectly. That represents a two-percentage-point increase over the 49 percent accuracy rate for the same number of returns in the 2012 filing season. The 19 incorrect tax returns resulted from incorrect application of the tax law, insufficient requests for information during the intake and interview process, or lack of adherence to quality review requirements.

While this is a small sample of the 3.3 Million tax returns prepared by over 90,000 volunteers across the country, it is still nonetheless troubling that TIGTA continues to find these types of accuracy related problems 2 years later due to “incorrect application of the tax law, insufficient requests for information during the intake and interview process, or lack of adherence to quality review requirements”.  TIGTA recommends–and the IRS agrees–that all volunteer instructors, return preparers, quality reviewers and site coordinators complete intake/interview and quality review training annually.  I am not sure what is more head scratching: that so many returns are being prepared incorrectly, or that these volunteers have receiving little to no training over the past two years since this problem came to light.

The VITA system is supposed to be helping those that are the neediest as a) they cannot afford professional income tax preparation and b) they need their refunds essentially to live.  In theory this is a vital service that needs to continue.  In practice, how do you motivate volunteers to devote more of their time (and possibly money) for training & licensing to put out a better product, yet receive no compensation? Furthermore, it sort of defeats the purpose of “helping” these taxpayers if their return is prepared incorrectly which potentially opens them up to delayed refunds, audits and penalties/interest. The old adage “you get what you pay for’ apparently applies here.

If you have had your return prepared at a VITA site, please let us know about your experience in the comments section below.  Plus, if you’ve had your return prepared in the past 3 years at a VITA site or any other tax establishment, and would like it checked for accuracy, contact an R&G Brenner professional today for a no obligation consultation, and we will review them for FREE!

Source: Accounting Today

5th Amendment Protection? Not From The IRS


Taking the 5th? Not So Fast...
Taking the 5th? Not So Fast...

By Robert W. Wood

…Imagine getting a grand jury subpoena to produce your own offshore bank records. Can’t you take the Fifth? The Fifth Amendment says you cannot be forced to incriminate yourself. It turns out there’s an exception for “required records.”

In In re Grand Jury Investigation M.H., the Ninth Circuit allowed prosecutors to compel someone to produce offshore account data even if it was self-incriminating. The Seventh Circuit has just done the same in IN RE: SPECIAL FEBRUARY 2011–1 GRAND JURY SUBPOENAUnder the Required Records Doctrine, it doesn’t violate your rights if:

~The government’s inquiry is essentially regulatory;

~The information is a preserved record of a kind customarily retained; and

~The records have taken on public aspects making them analogous to a public document.

You might be shocked to learn that foreign bank records could be viewed in this way. But two appellate courts have said so. In the Ninth Circuit, it was “M.H.” who lost. In the Seventh, it was “T.W.” These names may not remain secret much longer.

Suppose the IRS and Department of Justice are investigating, trying to determine if you used offshore bank accounts to evade taxes. The grand jury issues a subpoena demanding records you are required to keep under the Bank Secrecy Act of ’70—that’s the law requiring FBARs. You try to quash the subpoena based on your Constitutional privilege against self-incrimination, since handing over the records clearly would incriminate you.

But the courts are saying the Required Records Doctrine trumps your Fifth Amendment privilege. Sure, the government has to establish the three elements of the Required Records Doctrine. But once they do, youhave to hand over the documents no matter how incriminating they are. The Fifth Amendment doesn’t allow you to refuse to produce them.

This kind of development should make the IRS voluntary disclosure program even more attractive…

Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009 with 2012 Supplement, Tax Institute), he can be reached atWood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

Source: Forbes