WASHINGTON (11/10/10)—At least four credit unions were among 177 organizations awarded $11 million in total matching grants by the Internal Revenue Service (IRS) to support their Volunteer Income Tax Assistance (VITA) programs, which offer free tax preparation services to low- and moderate income consumers. Many credit unions offer VITA programs, in part, to steer tax filers away from the costly refund anticipation loans (RALs). RALs are short-term, high-interest loans that are heavily marketed by some paid tax-preparation firms during tax time. They can deplete hundreds of dollars from a typical tax refund. The IRS said the grant funds may be used to:
* Enable VITA programs to extend services to underserved populations and hardest to reach areas, both urban and non-urban; * Increase the capacity to file returns electronically; * Heighten quality control and improve accuracy of returns prepared by the VITA sites; and * Enhance training of volunteers.
The IRS said there was a strong response to the 2011 VITA grant program with 374 organizations submitting applications requesting more than $33 million in matching funds. The agency reported that, for tax year 2010, individuals and families with an adjusted gross income of $49,000 or lower are eligible for VITA assistance. The National Credit Union Foundation's REAL Solutions program estimated in 2009 that credit uions’ free tax preparation, electronic filing, and refund deposits provided by the VITA program to low-income tax filers has saved those tax filers a combined $20 million. A total of 541 credit unions participated in the VITA program in 2009, according to the National Credit Union Admnistration. Use the resource link below to see grant recipients.