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GOOD MORNING!

put up your table tent and sign into your chromebook

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District 5 Virginia�Tax Aide Training�Unit 1

Gena Cadieux

Training Coordinator

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Day One

  • Introduction, welcome, and logistics
  • Today’s Agenda
    • Unit 1 – morning
      • Review Materials
      • Intake and Interview Process
      • Filing Basics

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Day One, continued

  • Unit 2 – Rosemarie
  • ​
  • Andrews case
  • Prepare your first return in TSO!

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Introductory Stuff

  • Facility and safety
  • Introduce Training Assistants

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Resources, we got resources!

  • Review hard copy resources (6744, QC/QR, Intake sheet)
  • Hand out Scope Cheat Sheet
  • Electronic resources
    • Student Manual
    • Tax Aide Links on Chromebook
    • 4012
    • Scope Manual
    • Colorado Resource Toolbox

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Basic Income Tax Video Knowledge Check

  1. All income is reported on the 1040. True / False
  2. Tax is calculated on a. AGI or b. Taxable Income
  3. Refundable Credits can result in a refund even if the taxpayer has no tax liability. True / False

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Resources = Accuracy

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Limitations of Googling/using AI

    • Information often out of date
    • Washington Post found 50% error rate for TurboTax and HR Block chatbots
    • No scope information built in
    • IRS’s Taxpayer Advocate Service says:

Taxpayers should not rely on AI-generated responses to complex tax questions

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Goals

  • Three types of learning in the coming week: tax law, tax software, TaxAide process
  • Learn the resources you can access – this is all open book!
  • Final product – ready to complete certification and volunteer at your TaxAide site and help folks do their taxes

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Intake and Interview

  • Every return starts with an interview of the taxpayer!
  • Every return is quality reviewed by another counselor, before the return is signed!

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Engage the Taxpayer

  • Put taxpayers at ease
  • Build rapport
    • Introduce yourself with a smile
    • Engage in small talk
    • Skip the politics
  • Ask open-ended questions
    • Questions that require more than yes or no answers
  • This is not an adversarial relationship

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Engage the Taxpayer

  • Speak clearly
  • Allow taxpayer time to respond
  • Protect taxpayer privacy
  • Don’t be afraid to say, “Let me check that for you”

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Explain the Process

  • Examine taxpayer ID, Intake Booklet, tax documents, and prior year return
  • Ask questions to help clarify taxpayer situation
  • Determine tax return is in scope
  • Tax data entered into computer
  • Return reviewed by a second certified Counselor
    • Explain reviewer also asks questions for verification

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Explain the Process (cont.)

  • Copy printed for taxpayer (mail-in copies when required)
  • Taxpayer reviews return(s) for accuracy and completeness
  • Explain taxpayer is responsible for their tax return
  • Taxpayer/spouse sign return
  • Federal (state if applies) return E-filed (paper return mailed by taxpayer only if IRS requirement)
  • Taxpayer keeps all documents, including signed copies
    • Tax-Aide keeps no taxpayer data or documents

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Confirm Taxpayer Identity

  • Confirm identity of taxpayers with government-issued photo ID
    • LC approval required for exceptions
  • Confirm taxpayer identification number for every person listed on return
    • Social Security card or SSA-1099 benefits statement
    • ITIN letter
    • LC approval required for exceptions
  • Last year’s return that we prepared

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Screening and Interviewing

  • Thorough screening and interview required prior to starting return
    • Review all pages of Intake Booklet with taxpayer
    • Ensure return is in scope
    • Ask questions when situation unclear
    • Exercise due diligence
  • Discuss/review consents and questions

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Tax Documents

Sort taxpayers’ documents in 1040 order

Wages

Interest

Dividends

Social Security

IRA distributions and pensions

Brokerage statements

Deductions, adjustments, or credits

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Tax Documents (cont.)

  • Confirm needed documents and information present
    • Taxpayer may need to go home for missing information or use the Customer Portal
    • Verify tax year on documents
    • Review for scope
      • Is the document in scope?
      • Are all the box entries and codes on the document in scope?
      • Refer to AARP Foundation Tax-Aide Scope Manual

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Intake Booklet

Comprised of ten bound pages:

    • Pages 1-4: IRS Interview/Intake & Quality Review Sheet
    • Page 5: Notes page
    • Page 6: AARP Optional Questions
    • Page 7: Instructions Page
    • Page 8: IRS Global Carry Forward Consent Form
    • Page 9: Consent to Disclose/Use Information to AARP Foundation
    • Page 10: Information Sharing with AARP Foundation

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Use of the Intake Booklet

  • Every question on pages 1-3 has a relationship to the tax return
  • Where do you find the SSNs?
  • Filling in the grey blocks

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Intake Booklet

  • Substantial redesign recently
    • Counselors complete and annotate all gray shaded areas
    • Why?
  • Add notes on Intake Booklet of any additional information to assist quality reviewer

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BREAK!

During the break, introduce yourself to someone or ones sitting near you and collaborate to find the answers to the scavenger hunt on the Intake Form

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Intake Booklet Scavenger Hunt

Where would you find out

  • whether the client received Social Security benefits?
  • the client’s children’s birthdays?
  • whether the client was blind?
  • if the client paid real estate taxes?
  • if they might be able to deduct car loan interest under the new tax law?
  • if the client received a military pension?

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Consent #1: IRS Global Carryforward Consent

  • Consent to Disclose Tax Return Information to VITA/TCE Tax Prep Sites
    • Allows TaxSlayer to carry forward taxpayer data to all active VITA/TCE sites following year
    • Reduces time and errors if taxpayer switches to different site the following year
    • Taxpayer/spouse sign form if agree to consent
    • If taxpayer (and spouse, if applicable) does not consent, only same site carryforward will be available

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Consent #2: Consent to Disclose/Use Information to AARP Foundation

  • Consent provides for:
    • TaxSlayer to share taxpayer data with AARP Foundation
    • Demographic questions are used
    • Enables AARP Foundation to receive grants based on our taxpayer population
    • Taxpayer/spouse sign form if agree to consent – both sign or no consent is given

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Consent #3: Information Sharing

  • AARP Foundation Program or Services
    • Information used to determine taxpayer eligibility for free programs and services offered by AARP Foundation
    • Not the same as the advertisers who pay AARP to solicit their members
    • Information shared
      • Name, address, email address, phone number and age
      • Adjusted gross income, household size and income
      • Refund allocation
    • Taxpayer/spouse both sign form if consent given

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Due Diligence During Interview

  • Ask sufficient and thorough questions to ensure accuracy and completeness of tax return
  • Verify accuracy of documents presented
    • Use good judgment when relying on oral or written statements
    • But, you are not the client’s auditor

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Other Information Sources

Last year’s tax envelope

Contents of last year’s tax envelope

Last year’s tax return

Notes in Tax Slayer software that carried forward from prior years

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Due Diligence (cont.)

  • Ask questions if information appears incorrect, inconsistent, or incomplete
  • Counselors may not ignore information provided or independently known
  • Counselors must not knowingly prepare false returns

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Due Diligence

  • Consult with Local or Shift Coordinator if concerned with accuracy of documents or answers
  • Do not prepare return if interview results appear inaccurate, suspicious, or inconsistent

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Completed Interview

Once interview complete, either

    • Prepare return
    • Taxpayer returns with missing documents
      • Possible appointment or use Customer Portal
    • Refer to another Counselor if in scope for site but out of scope for interviewing Counselor
    • Advise taxpayer return is out of scope
      • After you discuss with Shift Coordinator
      • Return Intake Booklet and all documents to taxpayer

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Quiz 1

  • Taxpayer tells you they received income from self employment but don’t have the records or information to complete the return. When they realize they will not be able to file today, they ask you to just finish the return without the self employment income.
  • What do you do?

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Quiz 2

  • A taxpayer says he is self-employed, but only documentation is some poorly handwritten notes and his answers during interview are inconsistent and evasive.
  • What do you do?

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Quiz 3

  • A taxpayer does not have photo ID with them, but you know them personally.
  • What should you do?

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Quiz 4

  • A taxpayer does not have Social Security cards for two dependents but did bring a copy of last year’s return that was completed by a professional preparer.
  • What do you do?

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Screening and Interviewing

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Filing Basics

  • Who must file?
  • Who should file?
  • How to file for someone who has no income?

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Who must file?

  • For most people, no need to file unless gross income is greater than the applicable standard deduction
  • Standard deduction varies based on marital status and age
  • MFS must file if income over $5
  • 4012, Chart A, Tab A, page A-3

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Who must file – special cases

  • Special rules for dependents and certain kinds of income or tax benefits
  • Charts B and C in Tab A

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Who must file, special cases

  • Common situations we see:
    • Self-employed with over $400 income (why?)
    • Advance Premium Tax credits
    • First time homebuyer credit repayment
    • Unreported tip income (why?)
    • HSA distribution

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Less common filing situations

  • Things we usually don’t see:
    • Household employee taxes (why?)
    • Church income
    • Medicare Advantage distributions
    • Alternative Minimum Tax
  • If you see these, we won’t be doing the return

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BREAK!

  • during the break, see if you can figure out what the 4012 says about:
  • whether veteran’s benefits are reported on the tax return
  • whether the client must report interest income if they didn’t get a 1099-INT from their bank

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Who Should File?

  • Identity protection
  • Real estate tax relief
  • Immigration proof/obtain ITIN
  • Refundable credits
    • Earned Income Credit
    • Education Credit
    • Additional Child Credit
    • Premium Tax Credit
  • Refund of withheld taxes

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Quiz 5

  • Sam and Diane are married; he was born in 1959 and she was born in 1962
  • Together, they have $31,000 in income
  • Based just on this information, must they file a tax return?

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Quiz 6

  • While you are interviewing Sam and Diane, Diane tells you that she has made multiple sales of items on Etsy totaling $1500 that she made from stuff she got for free.
  • Does this change whether they must file? Why or why not? Where do you find this in the 4012?

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