WASHINGTON – Auditors found persistent accuracy problems at volunteer-run assistance centers that the Internal Revenue Service wants to do more work helping taxpayers fill out their returns.
J. Russell George, the Treasury Department’s inspector general for tax administration, sent auditors to have 35 tax returns prepared at volunteer tax preparation sites across the country in the spring. The visits did not include sites catering to elderly taxpayers or the military.
Two-thirds of the returns prepared by volunteers had errors, most of them in the taxpayers’ favor. Had the auditors been actual taxpayers, the IRS could have paid $17,818 in excessive refunds, but also charged several taxpayers a total of $3,215 in unnecessary taxes.
Volunteer sites offer free tax return preparation to lower-income, elderly and military taxpayers, along with those who have limited English skills. About 62,000 volunteers helped more than 2.1 million taxpayers file their returns in the spring.
The IRS helps some taxpayers fill out their returns at centers that offer personal tax assistance, but the number of tax returns prepared at IRS sites has declined. The IRS encourages taxpayers to turn instead to volunteers or to free tax preparation software provided through its Web site.
IRS Commissioner Mark Everson in May proposed closing 68 taxpayer assistance centers to save money, in anticipation of customer service budget cuts. Everson postponed the closures when lawmakers objected.
Taxpayer Advocate Nina Olson, whose independent IRS office helps taxpayers resolve ongoing tax problems, criticized the closures as shifting a government responsibility to volunteers.
IRS officials have said demand for face-to-face help is shrinking, and that many questions can be answered more accurately and efficiently by routing taxpayers to experts over the telephone.
The auditors found the IRS made significant improvements in its oversight of volunteer centers since a 2004 audit found inaccuracies in tax returns prepared by volunteers. The IRS requires that volunteers pass a tax law examination. A quick alert system notifies sites about common problems detected in tax returns.
Nevertheless, this year’s review detected errors in some common tax breaks for families, including the dependency exemption, the child tax credit and the dependent care credit. Volunteers also had problems with retirement savings contributions.
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