I. Introduction

During the pandemic, the Internal Revenue Service (IRS) distributed approximately $700 billion in assistance to American families. However, many low-income families who had not filed taxes in the past were left out. Many Americans find tax filing difficult and intimidating, and they require assistance to get through the process. Multiple programs aim to provide that assistance. The Free File program provides free tax preparation software to eligible Americans. The Volunteer Income Tax Assistance (VITA), a free, government-funded program, serves a broader group of low-income tax filers in person, while a small part of this program provides assistance to those filing their taxes online through VITA funded software. The Tax Counseling for the Elderly Program (TCE) targets assistance to those who are generally 60 years or older. Despite VITA’s goal of ensuring low-income Americans can file taxes and access benefits, many Americans do not receive the help they need, and the vast majority of households eligible for assistance still utilize paid preparers who chip away at the value of tax refunds American families are entitled to. To inform future efforts to bring more low-income tax filers into the tax system, this report focuses on the VITA program and investigates the following three questions:

1. What outreach works to bring people to tax filing assistance sites and services?
2. What services and best practices help people file their taxes?
3. What does the VITA program need to scale to reach all who need assistance?

To answer these questions, we conducted a literature review and interviewed 15 experts from government, VITA sites, and nonprofits. Little national data exists on VITA sites, on which populations VITA serves and does not serve, and on which VITA sites and services are most efficient. Still, desk research and expert interviews provided initial conclusions:

Outreach: Messages from trusted government sources with connections to assistance were incredibly effective. Both trusted messengers within communities and tax filing assistance embedded in other social programs also increased uptake.

Help: VITA sites are most effective when they can provide the right level of assistance to each client. Automated assistance, such as screeners provided by Code for America, can help triage by sorting tax filers to the correct level of assistance. Investing in different levels of assistance, including expanding facilitated self-assistance (FSA), could better match need to level of assistance. Simpler filing products and more streamlined processes would also help move clients through this process. VITA sites also need to provide multilingual aid and other resources specific to given populations, particularly in areas with limited internet access.

Scale: A challenge for scaling VITA is the program’s reliance on volunteers and fund matching. The pandemic exacerbated this challenge. Better software can act as a “front door” and better triage people into the correct level of assistance needed. This would free up VITA volunteers to provide efficient services to those who need them most. For the funding challenge, counting volunteer hours as matching funds could increase funding levels.

This report proceeds as follows. Section II provides a brief background of public tax filing options. Section III overviews the scant data the IRS publishes on VITA. Section IV summarizes the current challenges for VITA/TCE. Section V includes recommendations to improve VITA such that it better serves at-need communities and can scale. Section VI is an appendix that includes information about our expert interviews.