Introduction to income tax preparation

1. Introduction to income tax preparation Spring 2018, los angeles mission college

2. What is voluntary income tax assistance (VITA) program? • Purpose of program is to help eligible taxpayers prepare their tax returns for free. • All volunteers must: • Pass a certification test (for this course it will be the Basic Test) • Complete the Volunteer Standards of Conduct certification test • Sign the Volunteer Standards of Conduct Agreement • This course is geared towards teaching you tax law so that you can prepare returns for taxpayers as a VITA volunteer.

3. Course structure • There is no need to memorize a lot of information. There are a lot of resources available for you to get to the right answer! • There are two certification paths: • Basic: completion of wage earner type returns. • Advanced: covers the full scope of the VITA returns. • Our VITA center only prepares returns under Basic Certification. You will only need to take the Basic Certification test. • You do NOT need to take the certification test for Military, International, or Health Savings Accounts

4. Course structure (continued) • Training materials • Publication 4491: Volunteer Training Manual: • Publication 4491-W: Comprehensive Problem and Exercise Book • Publication 4012: Volunteer Resource Guide • Form 7644: Test/Retest • Publication 4961: Volunteer Standards of Conduct • Publication 5101: Intake/Interview & Quality Review Training • Other Resources • You may also use the Practice Lab integrated with online courses and Link & Learn Taxes • When does our VITA center open? February 24. • What are you required to do before the VITA center opens? • Pass the Basic certification test • Pass the Volunteer Standards of Conduct certification test • Sign the Volunteer Standards of Conduct Agreement

5. What types of returns can you prepare as a volunteer? • Only those that fall within the scope of your certification and within the scope of VITA. • If you are unsure of whether you can prepare the return, please see me for guidance. • Publication 4012, Volunteer Resource Guide, has a list of what is within the scope of the VITA program.

6. What are your responsibilities as a VITA volunteer? • Provide quality service and to uphold the ethical standards of the program. • The standards are: • To follow the quality site requirements. • Not accept payment, solicit donations, or accept refund payments for federal or state tax return preparation. • Never solicit business from taxpayers. • Never knowingly prepare false returns. • Never engage in criminal or dishonest conduct. • Treat all taxpayers in a courteous manner.

7. What are your responsibilities as a vita volunteer (cont.)? • You must do your part to make sure that tax returns are prepared correctly. This means: • Confirming the taxpayer’s (and spouse’s if applicable) identity • Providing top quality service by helping taxpayers understand and meet their tax responsibilities • Question any incomplete, unusual, or incomplete items. • Research if you are unsure if a taxpayer is entitled to a deduction or credit, or ask another volunteer. • Verify Social Security numbers presented by taxpayers match the number listed on the return. • What should you do after you have completed the return for a taxpayer? • Have a second volunteer review the completed return before filing. Once the review is done by another volunteer, then it can be electronically filed.

8. What are your responsibilities as a vita volunteer (cont.)? • Taxpayer Trust and Confidentiality • You cannot disclose any personal tax information you gained as a result of providing the taxpayer this service. • Do not retain taxpayer documents for a follow-up visit. • Do not prepare a tax return if you suspect the person is being untruthful. • Refer to Publication 4299, Public Trust: • https://www.irs.gov/pub/irs-pdf/p4299.pdf

9. Exercise #1 • Which of the following is a violation of the Volunteer Standards of Conduct? • Knowingly preparing a false return. • Having a donation/tip jar in the taxpayer waiting area at the site. • Using taxpayer’s personal information to ask for a date. • All of the above.

10. Exercise #2 • Which volunteers must take Volunteer Standards of Conduct training and test? • Site Coordinators/Local Coordinators • Quality Reviewers and tax return preparers • Greeters • All VITA/TCE volunteers

11. Exercise #3 • If a volunteer violates the Volunteer Standards of Conduct, what are the possible consequences? • Removal from the VITA/TCE programs • Criminal investigation • Elimination of VITA/TCE grant funds • Deactivation of EFIN • All of the above

12. Exercise #4 • Bob, an IRS tax law certified volunteer preparer, told the taxpayer that cash income does not need to be reported because the IRS will never find out. The return was completed without the cash income. Jim, the designated Quality Reviewer, simply missed this omission and the return was printed, signed, and e-filed. Who has violated the Volunteer Standards of Conduct? • Bob, the IRS tax law certified volunteer preparer • Jim, the designated Quality Reviewer • Betty, the Site Coordinator • No one has violated the Volunteer Standards of Conduct

13. Exercise #5 • Jake is an IRS tax law certified volunteer preparer in the VITA/TCE Programs. When preparing a return for Jill, Jake learns that Jill does not have an account to receive a direct deposit of her refund. Jake offers to use his account to receive the direct deposit, and says he will turn the money over to Jill once the refund is deposited. Is this an acceptable action under the program? • Yes • No

14. Exercise #6 • Heidi, a certified volunteer, is working at the intake station. As part of her duties, she is required to explain to the taxpayer what they are expected to do today as part of the return preparation process. What should Heidi tell them? • Form 13614-C must be completed prior to having the return prepared. • You will be interviewed by the return preparer and asked additional questions as needed. • You need to participate in a quality review of your tax return by someone other than the return preparer. • All of the above.

15. Exercise #7 • Volunteers must verify the taxpayer has the following items as soon as possible: • Photo identification. • Social security number documents. • All income statements, including Forms W-2, 1099-R, etc. • All of the above.

16. Exercise #8 • The taxpayer should be informed of their responsibility for the information on the tax return during the quality review process. • True • False

17. Exercise #9 • Volunteers who refuse to use the intake/interview process are violation the Standards of Conduct. • True • False

18. Exercise #10 • Mary, the Greeter, identifies the taxpayer’s tax return requires Advanced IRS tax law certification. Therefore, the certified tax preparer must be certified to the Advanced level but the Quality Reviewer can be certified to any level, including Basic. • True • False