H.R. 2901 codifies the Voluntary Income Tax Assistance matching grant program and provides that the Secretary of the Treasury may allocate, from appropriated funds, up to $30 million per year in matching grants to qualified entities for the development, expansion, or continuation of qualified tax return preparation programs assisting low-income taxpayers and members of underserved populations. The Secretary is also authorized to provide multi-year grants not to exceed three years.
The Internal Revenue Service (IRS), through its Volunteer Income Tax Assistance (VITA) Program, currently partners with IRS-certified volunteer organizations to provide free tax return filing assistance to low-income populations, persons with disabilities, taxpayers with limited English proficiency, and other underserved communities. VITA originated from the IRS Reform Act of 1969. The Consolidated Appropriations Act of 2008 included funding for a demonstration program providing matching grants to some VITA organizations to help maintain and expand VITA programs. Matching grant funding for VITA has been included each subsequent year; however, this matching grant program has never been formally authorized.
Apart from grants, IRS supports VITA partners by providing training and other guidance. IRS reviews returns prepared by VITA grantees, and according to GAO, the agency has found accuracy rates for the program that exceed 90 percent. In 2016, more than 2.1 million returns have been filed through the VITA program resulting in billions of dollars in refunds to low income taxpayers, generally taxpayers that make $54,000 per year or less. About 40 percent of returns are prepared by volunteers in programs that are partially supported by matching grants.