S. 797 - Volunteer Income Tax Assistance Permanence Act of 2017

115TH CONGRESS
1ST SESSION

S. 797

To amend the Internal Revenue Code of 1986 to make permanent the Volunteer
Income Tax Assistance matching grant program.

IN THE SENATE OF THE UNITED STATES

MARCH 30, 2017

Mr. BROWN (for himself and Mr. HELLER) introduced the following bill;
which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to make permanent the Volunteer Income Tax Assistance matching grant program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Volunteer Income Tax Assistance Permanence Act of 2017’’.

SEC. 2. RETURN PREPARATION PROGRAMS FOR LOW-INCOME TAXPAYERS.

(a) IN GENERAL. — Chapter 77 is amended by inserting after section 7526 the following new section:

‘‘SEC. 7526A. RETURN PREPARATION PROGRAMS FOR LOW- INCOME TAXPAYERS.

‘‘(a) VOLUNTEER INCOME TAX ASSISTANCE MATCHING GRANT PROGRAM. —

‘‘(1) ESTABLISHMENT OF PROGRAM. — The Secretary, through the Internal Revenue Service, shall establish a Community Volunteer Income Tax Assistance Matching Grant Program (hereinafter in this section referred to as the ‘VITA grant program’). Except as otherwise provided in this section, the VITA grant program shall be administered in a manner which is substantially similar to the Community Volunteer Income Tax Assistance matching grants demonstration program established under title I of division D of the Consolidated Appropriations Act, 2008.

‘‘(2) MATCHING GRANTS. —

‘‘(A) IN GENERAL. — The Secretary may, subject to the availability of appropriated funds, make available grants under the VITA grant program to provide matching funds for the development, expansion, or continuation of qualified return preparation programs assisting low-income taxpayers and members of under served populations.

‘‘(B) APPLICATION. —

‘‘(i) IN GENERAL. — Subject to clause (ii), in order to be eligible for a grant under this section, a qualified return preparation program shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.

‘‘(ii) ACCURACY REVIEW. — In the case of any qualified return preparation program which was awarded a grant under this section and was subsequently subject to a field site visit by the Internal Revenue Service (including through the Stakeholder Partnerships, Education, and Communication office) in which it was determined that the average accuracy rate for preparation of tax returns through such program was less than 90 percent, such program shall not be eligible for any additional grants under this section unless such program provides, as part of their application, sufficient documentation regarding the corrective measures established by such program to address the deficiencies identified following the field site visit.

‘‘(C) PRIORITY. — In awarding grants under this section, the Secretary shall give priority to applications —

‘‘(i) demonstrating assistance to low-income taxpayers, with emphasis on outreach to and services for such taxpayers,

‘‘(ii) demonstrating taxpayer outreach and educational activities relating to eligibility and availability of income supports available through the Internal Revenue Code of 1986, such as the earned income tax credit, and

‘‘(iii) demonstrating specific outreach and focus on one or more underserved populations.

‘‘(D) DURATION OF GRANTS. — Upon application of a qualified return preparation pro- gram, the Secretary is authorized to award a multi-year grant not to exceed 3 years.

‘‘(3) AGGREGATE LIMITATION. — Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $30,000,000 per fiscal year (exclusive of costs of administering the program) to carry out the purposes of this section.

‘‘(b) USE OF FUNDS. —

‘‘(1) IN GENERAL. — Qualified return preparation programs receiving a grant under this section may use the grant for —

‘‘(A) ordinary and necessary costs associated with program operation in accordance with Cost Principles Circulars as set forth by the Office of Management and Budget, including —

‘‘(i) for wages or salaries of persons coordinating the activities of the program,

‘‘(ii) to develop training materials, conduct training, and perform quality reviews of the returns for which assistance has been provided under the program, and

‘‘(iii) for equipment purchases and vehicle-related expenses associated with remote or rural tax preparation services,

‘‘(B) outreach and educational activities described in subsection (a)(2)(C)(ii), and

‘‘(C) services related to financial education and capability, asset development, and the establishment of savings accounts in connection with tax return preparation.

‘‘(2) USE OF GRANTS FOR OVERHEAD EXPENSES PROHIBITED. — No grant made under this section may be used for overhead expenses that are not directly related to any qualified return preparation program.

‘‘(c) PROMOTION AND REFERRAL. —

‘‘(1) PROMOTION. — The Secretary shall promote the benefits of, and encourage the use of, tax preparation through qualified return preparation programs through the use of mass communications, referrals, and other means.

‘‘(2) INTERNAL REVENUE SERVICE REFERRALS. — The Secretary may refer taxpayers to qualified return preparation programs receiving funding under this section.

‘‘(3) VITA GRANTEE REFERRAL. — Qualified return preparation programs receiving a grant under this section are encouraged to refer, as appropriate, to local or regional Low Income Taxpayer Clinics individuals who are eligible to receive services at such clinics.

‘‘(d) DEFINITIONS. — For purposes of this section —

‘‘(1) QUALIFIED RETURN PREPARATION PROGRAM. — The term ‘qualified return preparation program’ means any program —

‘‘(A) which provides assistance to individuals, not less than 90 percent of whom are low-income taxpayers, in preparing and filing Federal income tax returns,

‘‘(B) which is administered by a qualified entity,

‘‘(C) in which all of the volunteers who assist in the preparation of Federal income tax returns meet the training requirements prescribed by the Secretary, and

‘‘(D) which uses a quality review process which reviews 100 percent of all returns.

‘‘(2) QUALIFIED ENTITY. —

‘‘(A) IN GENERAL. — The term ‘qualified entity’ means any entity which —

‘‘(i) is an eligible organization (as described in subparagraph (B)),

‘‘(ii) is in compliance with Federal tax filing and payment requirements,

‘‘(iii) is not debarred or suspended from Federal contracts, grants, or cooperative agreements, and

‘‘(iv) agrees to provide documentation to substantiate any matching funds provided under the VITA grant program.

‘‘(B) ELIGIBLE ORGANIZATION. —

‘‘(i) IN GENERAL. — Subject to clause (ii), the term ‘eligible organization’ means —

‘‘(I) an institution of higher education which is described in section 102 (other than subsection (a)(1)(C) thereof) of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and which has not been disqualified from participating in a program under title IV of such Act,

‘‘(II) an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code,

‘‘(III) a local government agency, including —

‘‘(aa) a county or municipal government agency, and

‘‘(bb) an Indian tribe, as defined in section 4(13) of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103(13)), including any tribally designated housing entity (as defined in section 4(22) of such Act (25 U.S.C.4103(22))), tribal subsidiary, subdivision, or other wholly owned tribal entity, or

‘‘(IV) a local, State, regional, or national coalition (with one lead organization which meets the eligibility requirements of subclause (I), (II), or (III) acting as the applicant organization).

‘‘(ii) ALTERNATIVE ELIGIBLE ORGANIZATION. — If no eligible organization described in clause (i) is available to assist the targeted population or community, the term ‘eligible organization’ shall include —

 ‘‘(I) a State government agency, and

‘‘(II) a Cooperative Extension Service office.

‘‘(3) LOW-INCOME TAXPAYERS. — The term ‘low-income taxpayer’ means a taxpayer who has income for the taxable year which does not exceed an amount equal to the completed phase out amount under section 32(b) for a married couple filing a joint return with three or more qualifying children, as determined in a revenue procedure or other published guidance.

‘‘(4) UNDERSERVED POPULATION. — The term ‘underserved population’ includes populations of persons with disabilities, persons with limited English proficiency, Native Americans, individuals living in rural areas, members of the Armed Forces and their spouses, and the elderly.’’.

(b) CLERICAL AMENDMENT. — The table of sections for chapter 77 is amended by inserting after the item relating to section 7526 the following new item:

‘‘7526 A. Return preparation programs for low-income taxpayers.’’.