WASHINGTON - Fewer tax returns are being prepared accurately at the Volunteer

Program sites sponsored by the Internal Revenue Service (IRS), according to a new

report by the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA found that the accuracy rates for tax returns prepared at Volunteer Program sites

decreased sharply from the 2010 filing season. Of the 36 tax returns prepared for TIGTA

auditors, only 14 (39 percent) were prepared correctly. Volunteers prepared the tax

returns inaccurately because they did not follow all guidelines, used intake sheets

incorrectly or, in some cases, knowingly modified the facts the auditors presented.

"The findings of this review are very troubling," said J. Russell George, Treasury

Inspector General for Tax Administration. "The Volunteer Program plays an important

role in helping many taxpayers, notably those who have low incomes and the elderly,

disabled, and limited-English proficient, participate in the tax system. Like all taxpayers,

they deserve to have their tax returns prepared accurately. I am pleased that the IRS has

agreed to our recommendations to address these problems," George added.

The IRS's Volunteer Income Tax Assistance, or VITA program, has existed since 1969.

In Fiscal Year (FY) 2011, the IRS awarded a total of 179 organizations $12 million in

Federal matching grants to help VITA sites file tax returns electronically and enhance

training of the volunteers who staff the sites. A total of 87,602 volunteers prepared

approximately 3.1 million individual income tax returns at 12,326 Volunteer Program

sites in FY 2010.

The IRS has implemented an extensive quality review process in the program, but that

process has limitations and may not be providing reliable results. Current steps and

processes do not ensure the integrity of volunteers, even though the volunteers have

access to taxpayers' Personally Identifiable Information, such as Social Security

Numbers, driver's licenses and home addresses. According to the report, the IRS does

have a process to "help ensure willful acts of fraud occurring at Volunteer Program sites

can be reported, but improvements are needed."

TIGTA made a series of recommendations designed to improve the quality and controls

of the program. The IRS agreed to implement TIGTA's recommendations.