Return preparation programs for applicable taxpayers

Source Credit

(a) Establishment of Volunteer Income Tax Assistance Matching Grant Program
The Secretary shall establish a Community Volunteer Income Tax Assistance Matching Grant Program under which the Secretary may, subject to the availability of appropriated funds, make grants to provide matching funds for the development, expansion, or continuation of qualified return preparation programs assisting applicable taxpayers and members of underserved populations.
(b) Use of funds
(1) In general
Qualified return preparation programs may use grants received under this section for—
(A) ordinary and necessary costs associated with program operation in accordance with cost principles under the applicable Office of Management and Budget circular, including—
(i) wages or salaries of persons coordinating the activities of the program,
(ii) developing training materials, conducting training, and performing quality reviews of the returns prepared under the program,
(iii) equipment purchases, and
(iv) vehicle-related expenses associated with remote or rural tax preparation services,
(B) outreach and educational activities described in subsection (c)(2)(B), and
(C) services related to financial education and capability, asset development, and the establishment of savings accounts in connection with tax return preparation.
(2) Requirement of matching funds
A qualified return preparation program must provide matching funds on a dollar-for-dollar basis for all grants provided under this section. Matching funds may include—
(A) the salary (including fringe benefits) of individuals performing services for the program,
(B) the cost of equipment used in the program, and
(C) other ordinary and necessary costs associated with the program.
Indirect expenses, including general overhead of any entity administering the program, shall not be counted as matching funds.
(c) Application
(1) In general
Each applicant for a grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
(2) Priority
In awarding grants under this section, the Secretary shall give priority to applications which demonstrate—
(A) assistance to applicable taxpayers, with emphasis on outreach to, and services for, such taxpayers,
(B) taxpayer outreach and educational activities relating to eligibility and availability of income supports available through this title, including the earned income tax credit, and
(C) specific outreach and focus on one or more underserved populations.
(3) Amounts taken into account
In determining matching grants under this section, the Secretary shall only take into account amounts provided by the qualified return preparation program for expenses described in subsection (b).
(d) Program adherence
(1) In general
The Secretary shall establish procedures for, and shall conduct not less frequently than once every 5 calendar years during which a qualified return preparation program is operating under a grant under this section, periodic site visits—
(A) to ensure the program is carrying out the purposes of this section, and
(B) to determine whether the program meets such program adherence standards as the Secretary shall by regulation or other guidance prescribe.
(2) Additional requirements for grant recipients not meeting program adherence standards
In the case of any qualified return preparation program which—
(A) is awarded a grant under this section, and
(B) is subsequently determined—
(i) not to meet the program adherence standards described in paragraph (1)(B), or
(ii) not to be otherwise carrying out the purposes of this section,
such program shall not be eligible for any additional grants under this section unless such program provides sufficient documentation of corrective measures established to address any such deficiencies determined.
(e) 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 applicable taxpayers, in preparing and filing Federal income tax returns,
(B) which is administered by a qualified entity,
(C) in which all 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,
(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 pursuant to the grant program under this section.
(B) Eligible organization
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. 1002), 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) and exempt from tax under section 501(a),
(iii) a local government agency, including—
(I) a county or municipal government agency, and
(II) 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,
(iv) a local, State, regional, or national coalition (with one lead organization which meets the eligibility requirements of clause (i), (ii), or (iii) acting as the applicant organization), or
(v) in the case of applicable taxpayers and members of underserved populations with respect to which no organizations described in the preceding clauses are available—
(I) a State government agency, or
(II) an office providing Cooperative Extension services (as established at the land-grant colleges and universities under the Smith-Lever Act of May 8, 1914).
(3) Applicable taxpayers
The term "applicable taxpayer" means a taxpayer whose income for the taxable year does not exceed an amount equal to the completed phaseout 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.
(f) Special rules and limitations
(1) Duration of grants
Upon application of a qualified return preparation program, the Secretary is authorized to award a multi-year grant not to exceed 3 years.
(2) Aggregate limitation
Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $30 million per fiscal year (exclusive of costs of administering the program) to grants under this section.
(g) Promotion of programs
(1) In general
The Secretary shall promote tax preparation through qualified return preparation programs through the use of mass communications and other means.
(2) Provision of information regarding qualified return preparation programs
The Secretary may provide taxpayers information regarding qualified return preparation programs receiving grants under this section.
(3) Referrals to low-income taxpayer clinics
Qualified return preparation programs receiving a grant under this section are encouraged, in appropriate cases, to—
(A) advise taxpayers of the availability of, and eligibility requirements for receiving, advice and assistance from qualified low-income taxpayer clinics receiving funding under section 7526, and
(B) provide information regarding the location of, and contact information for, such clinics.

History

(Added Pub. L. 116–25, title I, §1401(a), July 1, 2019, 133 Stat. 993.)

Editorial Notes

Editorial Notes

References in Text
The Higher Education Act of 1965 and such Act, referred to in subsec. (e)(2)(B)(i), are Pub. L. 89–329, Nov. 8, 1965, 79 Stat. 1219. Title IV of the Act is classified generally to subchapter IV (§1070 et seq.) of chapter 28 of Title 20, Education. For complete classification of this Act to the Code, see section 1 of Pub. L. 89–329, set out as a Short Title note under section 1001 of Title 20 and Tables.
The date of the enactment of this section, referred to in subsec. (e)(2)(B)(i), is the date of enactment of Pub. L. 116–25, which was approved July 1, 2019.
The Smith-Lever Act, referred to in subsec. (e)(2)(B)(v)(II), is act May 8, 1914, ch. 79, 38 Stat. 372, which is classified generally to subchapter IV (§341 et seq.) of chapter 13 of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under section 341 of Title 7 and Tables.