III. IRS Data on VITA Programs

The IRS publishes little granular data on the VITA program. For example, there is no public data on the demographics of VITA filers, the cost of each VITA filing in terms of funding, the usage of FSA services as compared to full assistance, and more. In interviews, experts confirmed that no comprehensive public data source exists. What does exist is national annual data on the number of VITA and TCE filings, the number of tax preparation volunteers, and the number of VITA and TCE sites.

Both the number of VITA and TCE returns and the number of tax filing assistance programs have risen since the early 2000s and then dropped precipitously during the pandemic. The rate of growth has slowed in recent years, despite increases in funding in 2007 (to $8 million), 2012 ($12 million), 2015 ($15 million), 2019 ($18 million), and 2021 ($30 million). This tracks with what experts told us: the scale of VITA right now is largely reliant on the number of volunteers and increased funding does not guarantee an inflow of volunteers. One former VITA site coordinator said that to scale, “The first key point is the main variable asset: volunteers.” A government employee agreed, stating that tax filing assistance is an “extremely resource-intensive operation and volunteers are the key component—that’s the whole game.” A non-profit executive added that “getting volunteers is hard in rural and low-income communities,” which are those with the greatest need.

Moreover, despite increases in funding, the number of volunteer tax filing preparation sites has declined over recent years. This also reflects what experts shared—grants have become larger and have gone to larger, established organizations rather than spurring new VITA sites, particularly due to the matching requirement, which might be outside of the capacity of smaller sites.

IRS data also suggests the returns filed by VITA and TCE sites have a high level of accuracy. On the other hand, samplings of returns filed by private preparers show far lower accuracy rates, especially because paid preparers are not regulated in most states. A Government Accountability Office sample found that only two of 19 privately-prepared returns showed the correct EITC refund, and preparers overestimated the refund by more than $100 in 13 of those returns. A large study done of IRS data showed that paid preparers had a 60 percent error rate, due to a combination of both preparer errors and the taxpayer providing incorrect or incomplete information. This is a higher error rate than returns prepared by taxpayers themselves. In 2008, the U.S. Treasury Inspector General for Tax Administration tested 28 paid preparers and found that just 11 prepared an accurate return.