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TAX PREP - TREASURY REPORT SAYS YOU GET WHAT YOU PAY FOR

September 16, 2004

Free tax preparation for the poor may not be much of a bargain. The Treasury Inspector General for Tax Administration had 35 dummy tax returns prepared at "VITA" sites last tax season. Exactly none of the returns were prepared correctly. But don't worry - VITA only prepared 843,803 returns last season.

In fairness to the VITA (Volunteer Income Tax Assistance) preparers, the returns involved "scenarios designed around income reporting, filing status, exemptions, and the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC)." These provisions can be very tricky, especially when a return is prepared without the aid of a computer. Still, these are typical tax issues for taxpayers that need VITA assistance.

The IRS says it is taking steps to correct these problems. It would be wise to also find ways to provide computers and software to VITA centers - this stuff is almost impossible to get right by hand.

Link to the TIGTA Report 2004-40-154

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