Volunteer Income Tax Assistance Grants
April 07, 2016 governmentgrants.info Staff
The Volunteer Income Tax Assistance (VITA) program originated as part of the 1969 Tax Reform Act.
Through VITA, government and community organizations have access to tax free aid for individuals with low to moderate incomes who cannot afford professional assistance. In order to extend VITA services, in 2007, the VITA Grant Program was created. This allowed the program to apply services to clients in hard-to-reach urban and non-urban regions. It increased associated program capacity to file taxes electronically. The VITA Grant Program improved accuracy of tax returns filed at volunteer sites and enhanced volunteer training.
Some organizations may find VITA's scope too narrow. Many expenses attached to a tax free preparation site will not be allowable. However, if funds are going directly to organizations, this might be an exceptional opportunity for providers of integrated services that want to maximize their faculties in regard to tax preparation services.
The Integrated Service Delivery
The infrastructure consists of three core levels: Employment and Career Advancement, Income Enhancements and Work Supports, and Financial and Asset Building. These core elements provide job training, case management, tax preparation, job retention support, financial coaching, research and evaluation, and income supports. It also covers technology used for efficient operation.
In Chicago, the Center for Economic Progress serves a large section of the populace using free tax preparation sites. Their financial coaches pull credit scores and offer one-on-one coaching. The program works out of organizations and community colleges, and also houses the National Community Tax Coalition, a program that advocates on behalf of increased federal funding for free tax preparation programs.
TAX HELP New Mexico works with high school and community college students, as well as non-students, training them to be tax preparers through credit bearing, online coursework. After training, students volunteer at one of the almost 50 tax sites available throughout the state. TAX HELP New Mexico has been a resounding success. Even after less funding was allocated, the program was able to leverage new funding through resources like the New Mexico Higher Education and Taxation and Revenue Departments.
Targeting & Eligibility
VITA Grants offers funding to nonprofit organizations and government entities, specifically to areas that are underserved and operate free tax preparation programs. Eligibility is based on incomes of the populace in urban and non-urban areas, the non-English speaking, the disabled, Native Americans and elderly taxpayers.
Tax preparation providers in these communities give eligible filers the information needed to apply for deductions and tax credits. These help reduce transactions costs associated with tax filing. The IRS also provides support, governing grant programs that focus on the non-English speaking and the elderly.
Service and Program Support
Among the support the IRS offers VITA Grants are:
Improved rate of return accuracy with VITA sites.
Heightened quality control.
Extended services to the underserved.
Opportunity to file electronic returns efficiency.
Enhanced volunteer training.
There are allowable expenses, including printers and facility costs. While applicants can request funding for many resources, software is not allowable as VITA sites have TaxWise available to students. Other disallowable expenses included child support and wraparound services like financial literacy.
The program does ask organizations to provide a one-to-one match of received funds. This can be in the form of computer software or hardware, cash and third party in-kind contributions such as volunteer time, space, supplies and advertising. Only funds utilized in support of VITA programs may qualify as matching funds. However, as long as they meet a specific set of conditions, any and all contributions such as cash and third party in-kind contributions are allowable as part of grantee cost sharing.
Limitations on Programs
VITA Grant programs have a narrow and specific focus when it comes to allowable uses. Those providing integrated services will need to be able to identify specific costs related to free tax preparation services as opposed to a full set of bundled services. VITA Grand funding also requires a one-to-one match on funds received. On top of that, this funding is small when compared to the actual number of VITA sites.
Grantee and Application Process
A complete list of VITA grant recipients, as of 2011, can be found here. Information regarding the Application Package is available here.