The ViTa act of 2010 


What is Community Volunteer income Tax assistance (ViTa)? 

The Community VITA program provides low-and moderate-income 
individuals and families with free assistance to prepare and file 
federal tax returns. The majority of taxpayers served earn an 
annual household income of less than $40,000 and are members of 
traditionally hard-to-reach and underserved communities including 
people with disabilities, extremely low-income persons, limited 
English speakers, the elderly, and Native Americans. The $12 million 
federal VITA Grant program is currently administered by the IRS’ 
Stakeholder Partnerships, Education and Communication (SPEC) 
office, and provides needed assistance to the national network 
of community VITA sites, operated and funded by community 
organizations, nonprofit foundations, local municipalities, and 
financial and educational institutions. VITA serves as a reliable, no-
cost tax preparation service for America’s workers. 

Who Benefits From Community Vita? 

Taxpayers, communities, and the federal government all benefit from 
a strong community VITA program. 

Low-income and Underserved Taxpayers: During the 2009 Federal 
income tax filing season, VITA programs prepared more than 
400,000 Earned Income Tax Credit (EITC) returns, more than 
200,000 Child Tax Credit (CTC) returns, and $30 million in returns 
for educational tax credits, helping program recipients claim $887 
million from available refundable tax credits. 

Local Economies: Last year returns filed by VITA programs resulted in 
$1.6 billion to low and moderate income taxpayers – dollars directly 
invested into communities in which taxpayers live and work. VITA is 
a key component in real, local, economic stimulus. Recent studies 
estimate that each additional EITC dollar generates $1.58 in local 
economic activity.1 

Federal Government: Volunteer tax preparation programs save the IRS 
an estimated $1.8 billion per year in return processing costs thanks 
to the higher than average rate of electronic filing on behalf of VITA 
clients. Electronic filing results not only in savings on processing 
costs, but it also yields a 2.5 percent rate of error, compared to a 25 
percent error rate for paper returns. Additionally, VITA also assists the 
IRS in furthering overall tax compliance, as many VITA clients are first-
time filers. 

 Alan Berube, Using the Earned Income Tax Credit to Stimulate Local Economies, The 
Brookings Institute, Washington, DC: Nov. 2006, http://www.brookings.edu/~/media/Files/rc/ 
reports/2006/11childrenfamilies_berube/Berube20061101eitc.pdf 

How is Community ViTa Funded? 

In addition to private and community based supports, VITA programs 
leverage in-kind contributions (computers, office, space, and 
supplies) and the services of volunteer tax preparers to keep costs 
low. During the 2009 filing season, 43,000 volunteers at 4,500 tax 
sites across the United States prepared more than 1.2 million tax 
returns – a 155% increase in program usage since 2003. 

While the increased program usage and expanded reach of VITA is 
impressive, even the most well-funded and established programs 
are strained. Moreover, as the current economic climate remains 
challenging, all VITA programs are experiencing notable spikes 
in taxpayers seeking assistance – above and beyond the steady 
upward trends in annual usage. This, coupled with reduced 
support from state and local governments, private foundations, 
and community-based organizations (due to decreased revenue), 
endangers the sustainability of this integral community resource. 

Established by the Consolidated Appropriations Act of 2008, the 
$8 million demonstration VITA Grant Program marked the first ever 
federal financial support for community VITA. In both FY2008 and 
FY2009 grant cycles, nearly 400 programs applied for the limited 
federal funds – each year submitting grant applications totaling in 
excess of $30 million. Although the program received an increased 
appropriation of $12 million in FY2010, that amount represents only a 
fraction of what it costs to operate the 4,500 tax sites nationwide. VITA 
programs and community partners spend an estimated $150 million 
per year to operate free tax assistance services, and this figure does 
not account for costs associated with opening new program sites in 
underserved communities. 

Why is The ViTa act of 2010 Needed? 

Although the VITA grant program has enjoyed federal 
appropriations since FY2008, there is no federal authorization of 
the program. The VITA Act of 2010 ensures sustainability of this 
vital community service by: 

• Authorizing an annual appropriation of $30 million in matching 
grants to eligible Community VITA programs to be used for 
program operation, taxpayer outreach, and related financial 
services offered at tax time, and 
• Establishes the National Center to Promote Quality, Excellence, 
and Evaluation in Volunteer Income Tax Assistance with a 
$5 million annual appropriation to disseminate best practices, 
facilitate technical assistance, coordinate program outcomes, 
and ensure continuation of service to underserved taxpayers 
for the 4,500 tax sites operating nationwide. 
For more information on 
Community VITA and The VITA Act of 2010, 
please contact: Todd Jorns with United Way Worldwide 
at todd.jorns@unitedway.org or +1 703.836.7112, Ext. 531. 


REAL ECONOMiCI M P A T T O U R