IRS Offers New Funding Opportunity for Cities to Enhance Free Tax Preparation Programs

This VITA grant program is the first of its kind for the IRS. Last December, Congress appropriated $8 million in funds to the IRS to establish and administer this one-year matching grant program.

Local VITA programs provide free tax preparation assistance for individuals and families who have low to moderate incomes. VITA sites can be run by local governments or community-based organizations and coalitions, and are staffed by trained volunteers who assist tax filers with filling out and submitting their tax forms.

According to the Center for American Progress, last year, VITA programs were responsible for returning more than $1 billion in tax refunds to low-income residents, many of whom are able to boost their incomes by filing for the federal Earned Income Tax Credit (EITC) through their local VITA sites.

This new IRS grant will help cities and community organizations sustain or increase the capacity of their current VITA programs. The funding will help to reach communities that have not had access to these programs, such as rural communities or underserved urban communities. The grants can also be used to improve the training of volunteers at VITA sites.

Low-income families often pay for costly or unnecessary tax preparation services when filing their income taxes at commercial sites, particularly if a VITA site is not located nearby or they are not aware of it. City officials can work with communities to develop free tax preparation sites and conduct outreach campaigns to steer families toward them.

According to National Community Tax Coalition data, approximately 100 free tax preparation sites currently operate in cities and towns in 36 states across the nation. Cities like Boston, Baltimore, Newark, N.J., and San Antonio have been leading the way with outreach campaigns that encourage city residents to claim the EITC and take advantage of free tax preparation services.

Although this is a new grant program, the IRS has been continuously supportive of communities in establishing VITA programs, providing free tax software and training volunteers. The IRS SPEC (Stakeholders, Partnerships, Education, and Communication) Division has regional offices across the country that can work with cities and communities to develop and expand their VITA programs.

How to Apply
The application period for this grant will run from July 1 to September 2.

Applicants must provide matching funds on a dollar per dollar basis, although funds may consist of cash, computer hardware and software, and third-party, in-kind contributions.

The application package and additional materials are available on the IRS website at www.irs.gov. Applications may be submitted online at www.grants.gov or mailed to IRS-SPEC, Grant Program Office, 401 West Peachtree Street, NW, Stop 420-D, Atlanta, GA 30308.

Details: For more information, visit the Partner and Volunteer Resource Center page on the IRS website, www.irs.gov. Questions about the VITA grant program or the application process should be e-mailed to grant.program.office@irs.gov or mailed to the Grant Program Office at the address listed above.

For more information about local VITA programs or city leadership around establishing and promoting free tax preparation, contact Sarah Bainton Kahn at bainton@nlc.org or (202) 626-3044, or Heidi Goldberg at goldberg@nlc.org or (202) 626-3069.