1. TAX-AIDE AARP Tax-Aide Policy and Procedures Review For Review by All Volunteers TY2014 Volunteer/Site Policies and Procedures – 2014 1

2. TAX-AIDE Overall Objectives: ● Ensure awareness of AARP Foundation Tax-Aide Program Policies and Procedures AARP Foundation Tax-Aide Standards of Professionalism IRS Quality Site Requirements (QSR) ● Provide IRS-mandated training for all volunteers on: IRS Quality Site Requirements (QSR) IRS Volunteer Standards of Conduct (VSC) Volunteer/Site Policies and Procedures – 2014 2

3. TAX-AIDE Goal Improve volunteer satisfaction and create a more satisfying experience for taxpayers by ensuring that all sites comply with Tax- Aide policy Volunteer/Site Policies and Procedures – 2014 3

4. TAX-AIDE Key Resource: Client Service Provider Digest ● Additional important information provided in the Client Service Provider Digest: Counselor Guidelines and Policies Conflict of Interest Guidelines Confidentiality and Security of Taxpayer Data Liability Protection AARP Foundation Volunteer Standards of Professionalism Activity Reporting Volunteer/Site Policies and Procedures – 2014 4

5. TAX-AIDE Summary of IRS Quality Site Requirements (QSR) Who is responsible? 1Volunteer certificationLC/Instructor 2Intake and InterviewCounselors 3Quality ReviewCounselors 4Reference MaterialLC 5Signed Volunteer AgreementCounselors 6All Returns filed on timely basisLC/ERO What is required and who is responsible? Volunteer/Site Policies and Procedures – 2014 5

6. TAX-AIDE Quality Site Requirements Who is responsible? 7Taxpayers informed of their Civil Rights LC 8Must use correct Electronic Filing Identification Number (EFIN) LC/ERO 9Must use correct Site ID number (SIDN) LC/ERO 10Taxpayer IdentificationCounselors Volunteer/Site Policies and Procedures – 2014 6

7. TAX-AIDE What Counselors Need to Know QSR #2 Intake/Interview Process Must use current year Form 13614-C – Interview Intake & Quality Review Sheet for every taxpayer Ask probing questions to ensure accurate and complete answers Document new or changed information on form for QR Goal: 100% use of form with sufficient interview of taxpayer to ensure accuracy and completeness of return (More later) Volunteer/Site Policies and Procedures – 2014 7

8. TAX-AIDE What Counselors Need to Know QSR #3 Quality Review Process QR must be in front of taxpayer Fully review and account for all pages of Intake Sheet QR should ask probing questions to ensure correct application of tax law, not just verify name and numbers Goal: 100% Quality Review by 2 nd Counselor (More later) Volunteer/Site Policies and Procedures – 2014 8

9. TAX-AIDE What Counselors Need to Know QSR #5 Volunteer Agreement Must pass Volunteer Standards of Conduct test Must agree to IRS Standards of Conduct Must also agree to abide by program’s Standards of Professionalism Volunteer Agreement must be signed by volunteer and instructor or local coordinator Goal: 100% volunteers sign Volunteer Agreement Form and understand Standards of Conduct Volunteer/Site Policies and Procedures – 2014 9

10. TAX-AIDE Volunteer Standards of Conduct All volunteers must sign Volunteer Agreement Form 13615 – critical text below Volunteer/Site Policies and Procedures – 2014 10

11. TAX-AIDE Form 13615, Page 2 Electronic OK Must be Handwritten Volunteer/Site Policies and Procedures – 2014 11

12. TAX-AIDE IRS Volunteer Standards of Conduct (VSC) #1: Follow the Quality Site Requirements #2: Not accept payment or solicit donations for federal or state tax return preparation #3: Never solicit business for self or others #4: Not knowingly prepare a false return #5: Not engage in any criminal or any conduct deemed to have a negative effect on the program #6: Treat all taxpayers in a professional, courteous and respectful manner Volunteer/Site Policies and Procedures – 2014 12

13. TAX-AIDE AARP Foundation Tax-Aide Standards of Professionalism ● Discussions of politics, race, nationality, gender identity, religion are inappropriate. ● Treat all taxpayers/volunteers equally and with courtesy – no discrimination ● Only prepare “in-scope” returns ● All tax returns will receive a Quality Review by a 2 nd certified counselor Volunteer/Site Policies and Procedures – 2014 13

14. TAX-AIDE Standards of Professionalism ● Do not discuss taxpayer information with anyone who does not have a “need to know” ● When an issue arises regarding taxpayer return that requires consultation with 2 nd volunteer: Discuss away from taxpayer Discuss quietly to ensure other taxpayers do not hear private information Resolve differences of opinion privately to sustain taxpayer confidence in the knowledge and skills of the counselors Volunteer/Site Policies and Procedures – 2014 14

15. TAX-AIDE Standards of Professionalism ● Angry taxpayer? Attempt to diffuse situation Move to quiet area, if possible Immediately notify local coordinator ● Provide assistance to disabled Assure welcome If requested assistance not available, notify local coordinator ● Do not provide personal information for any volunteer First name and last initial only on name tag Refer inquiries to local coordinator Volunteer/Site Policies and Procedures – 2014 15

16. TAX-AIDE What Counselors Need to Know QSR #6 Timely Filing of Tax Returns Both Taxpayer and spouse must sign Form 8879 to give authorization to e-file return—counselors may never sign for a taxpayer All counselors should Inform Taxpayer he/she is responsible for accuracy of the return before signing the 8879 Any rejects should be resolved in timely manner (usually within 3 days and usually by ERO, not counselor) Goal: 100% taxpayers are reminded that the accuracy of the return is their responsibility Volunteer/Site Policies and Procedures – 2014 16

17. TAX-AIDE What Counselors Need to Know QSR #8 All Returns must have the correct Site Identification Number QSR #9 All Sites must have the correct Electronic Filing Identification Number Volunteer/Site Policies and Procedures – 2014 17 Both usually defaulted In software

18. TAX-AIDE What Counselors Need to Know QSR #10 Security, Privacy, Confidentiality All taxpayers should show photo ID and SS cards for all people on return* No taxpayer forms or information should be retained by volunteers All returns must be prepared at site Promptly report any lost data to National office *see notes Goals: 100% Taxpayer identification No loss of taxpayer data Volunteer/Site Policies and Procedures – 2014 18

19. TAX-AIDE What Counselors Need to Know QSR #10 Security, Privacy, Confidentiality Know and comply with new Password requirements Never post password on or near computer Lock computer if you step away; turn screen so can’t be seen by others than taxpayer Restrict cell phone usage by taxpayers to prevent pictures of financial data Don’t talk about a taxpayer’s return where others can hear Goal: All taxpayer financial data are secure Volunteer/Site Policies and Procedures – 2014 19

20. TAX-AIDE Secure Equipment and Tax Data ● AARP Foundation Tax-Aide approved anti-virus software must be installed and running on computers ● AARP Foundation Tax-Aide approved firewall software program installed ● Passwords required to control access to taxpayer data ● No Windows XP computers Volunteer/Site Policies and Procedures – 2014 20

21. TAX-AIDE Loss of Equipment/Financial Data ● Store equipment in secure environment when not in use (ask: who has access to this storage room?) ● Immediately notify your volunteer leader if: A computer is stolen or lost Forms with taxpayer data are stolen or lost, or a taxpayer has unauthorized access to another taxpayer’s documents. Be careful not to mix up printed tax returns. ● Volunteer leader must immediately call police to report loss and number on back of volunteer badge ● Incident Review must be completed and sent to volunteer supervisor and National Office Volunteer/Site Policies and Procedures – 2014 21

22. TAX-AIDE Summary: All Volunteers Must ● Complete Volunteer Site Policies and Procedures Training (these slides) ● Receive Training to understand Intake and Interview Process Quality Review Process ● Pass the IRS Volunteer Standards of Conduct test ● Wear name tag with first name and first initial only of last name Volunteer/Site Policies and Procedures – 2014 22

23. TAX-AIDE Summary: All Counselors Must ● Pass Advanced level of IRS Test ● Not prepare returns that are “out of scope” for Tax-Aide ● Not prepare a return which they do not have the sufficient knowledge to prepare, even if it is “in-scope” (refer to another counselor) ● Not prepare a return if they believe that the taxpayer is not truthful about the information provided (advise return can’t be completed) Volunteer/Site Policies and Procedures – 2014 23

24. TAX-AIDE Tax-Aide Policy re: Shut-Ins Requirements: ● Only for disabled who are unable to leave their home for any reason and are age 60 or older ● They need federal tax assistance ● Mileage limited to 30 miles round-trip ● Completed no later than April 20th Volunteer/Site Policies and Procedures – 2014 24

25. TAX-AIDE Shut-Ins ● Requires presence of two counselors to reduce liability issues ● Need computer, printer and internet access ● Extremely rare ● Is there an alternative? Power of Attorney provided by taxpayer to friend/relative who can come to site Volunteer/Site Policies and Procedures – 2014 25

26. TAX-AIDE Reduce Errors on Bank Deposit Information ● Bank routing number and account number should be entered directly from check—must not be taken verbally or from handwritten note ● If taxpayer does not have check use optional method below only if approved by Local Coordinator Volunteer/Site Policies and Procedures – 2014 26

27. TAX-AIDE Reduce Errors on Bank Deposit Information for Direct Deposit ● Optional Method: Counselor advises taxpayer that they are responsible for accuracy of information, and the money will most likely be gone for good if incorrect numbers are given Taxpayer initials next to routing and account numbers on printed return to confirm they accept responsibility for accuracy Source of information recorded in TaxWise  Main Information Sheet  Taxpayer Diary Volunteer/Site Policies and Procedures – 2014 27

28. TAX-AIDE Volunteer/Site Policies and Procedures Questions? Comments… Volunteer/Site Policies and Procedures – 2014 28

29. TAX-AIDE Screening and Interviewing ● Preparation of tax return does not begin until a thorough screening and interview has taken place! Form 13614-C – Intake Sheet Ensuring return is in scope Probing to resolve tax issues Exercising due diligence NTTC Training – 2014 29

30. TAX-AIDE Screening and Interviewing ● Proper use of 13614-C will help ensure a correct return ● More than half of all errors on returns are due to inadequate screening and interviewing! Volunteer/Site Policies and Procedures – 2014 30

31. TAX-AIDE NTTC Training – 2014 31

32. TAX-AIDE NTTC Training – 2014 32

33. TAX-AIDE NTTC Training – 2014 33

34. TAX-AIDE First Step – Screen for Eligibility ● Confirm identity of taxpayers with photo ID LC approval required for exemptions, should be very rare Personal verification of ID by counselor ● Confirm Social Security or other taxpayer identification number NTTC Training – 2014 34

35. TAX-AIDE Taxpayer Identification Number ● Best – Social Security card or ITIN (Individual Taxpayer Identification Number) letter ● Alternatives Other documents issued by Social Security Administration such as SSA-1099 or Social Security Administration letter -OR- All docs with matching name and SSN plus TaxWise carry-forward of last year’s return all match NTTC Training – 2014 35

36. TAX-AIDE Begin the Interview Process ● Update Intake Sheet with all missing or corrected information ● Add notes on Intake Sheet during interview to help Quality Reviewer determine if return is accurate NTTC Training – 2014 36

37. TAX-AIDE Probing Interview Techniques ● Engage taxpayers in a conversation to clarify their answers and identify other tax issues that may affect tax return ● Verify any issue that is not clear, ask more questions until you are satisfied you have all the facts ● Verify and clarify information which appears to have changed from last year’s tax return NTTC Training – 2014 37

38. TAX-AIDE Probing Interview Technique ● Verify that taxpayer has all needed documents ● Verify accuracy of documents and receipts ● Verify documents are for 2014 ● Make sure return is IN SCOPE ● Use due diligence NTTC Training – 2014 38

39. TAX-AIDE Due Diligence Is… ● Asking sufficient and thorough questions to ensure accuracy and completeness of tax return -AND- ● Verifying accuracy of documents presented OR determining when to rely on, in good faith and without verification of, taxpayer’s oral/handwritten testimony NTTC Training – 2014 39

40. TAX-AIDE Due Diligence (cont) ● Tax Preparer must ask questions if information furnished appears to be incorrect, inconsistent, or incomplete ● Tax Preparer may not ignore information furnished to, or actually known, by him/her ● Counselors must not KNOWINGLY prepare false returns! NTTC Training – 2014 40

41. TAX-AIDE Relying on Good Faith ● Good Faith is relying on oral/ handwritten testimony from taxpayer that is ordinary, necessary and reasonable Taxpayer has established credibility – a returning customer who has forgotten to bring a receipt The dollar amount is insignificant NTTC Training – 2014 41

42. TAX-AIDE After the Interview: Four Options 1. Begin to prepare taxpayer’s return 2. Advise taxpayer to bring missing documents another day; help set up an appointment 3. Hand off to another Counselor if not in your “comfort zone” 4. Advise taxpayer that return is out of scope and why Discuss situation with Local Coordinator/other Tax Preparers first Return intake form and all other documents to taxpayers NTTC Training – 2014 42

43. TAX-AIDE Screening and Interviewing NTTC Training – 2014 43 Questions… Comments…

44. TAX-AIDE Quality Review is Required ● ALL returns must receive Quality Review by 2 nd certified preparer ● QR must be completed with Taxpayer or representative present NTTC Training – 2014 44

45. TAX-AIDE Quality Review Methods ● Designated Reviewer – preferred method Designated Quality Reviewer Dedicated to reviewing completed returns ● Peer Review – volunteers exchange returns with each other ● Self-Review – not acceptable NTTC Training – 2014 45

46. TAX-AIDE Who Conducts The Quality Review? ● Second Certified Tax Counselor must Quality Review EVERY return ● QR on computer rather than printed return Incomplete forms or red fields are apparent Ease of updating errors Saves paper and ink/toner NTTC Training – 2014 46

47. TAX-AIDE What does the Reviewer look for? ● Has the information on the Intake sheet been properly reflected on the return? ● Has something been omitted? ● Is the data entered correctly? ● A good quality review is nearly a second tax preparation – but without the data entry. Volunteer/Site Policies and Procedures – 2014 47

48. TAX-AIDE Intake/Interview Sheet ● Explain Quality Review Process to taxpayer ● Review 1040 entries line-by-line ● Any other ‘issues’ that came up during preparation ● Highlight any carryovers ● Respond to any questions NTTC Training – 2014 48

49. TAX-AIDE Intake/Interview and QR Sheet ● Form 13614-C, Pg 4 NTTC Training – 2014 49 Confirm In-scope Confirm

50. TAX-AIDE Quality Review Process ● Review Intake/Interview Sheet for possible dependents; compare with return ● Verify most advantageous filing status is selected ● Verify dependent coding on Main Info Sheet, e.g., EIC NTTC Training – 2014 50

51. TAX-AIDE Quality Review Process ● Look for typos, transposed digits, missing information, misspellings, etc. ● Compare Intake/Interview Sheet and supporting documents to return ● Ask taxpayer probing questions ● Ask: “Is there any other income?” NTTC Training – 2014 51

52. TAX-AIDE Quality Review Process ● Verify adjustments ● Verify deductions (Schedule A) ● Verify credits – including required forms ● Verify correct entry of withholding and any estimated payments ● Verify direct deposit information Bank routing number and account number NTTC Training – 2014 52

53. TAX-AIDE Quality Review Process ● If returning taxpayer, review Summary Form in TaxWise to compare year-over- year changes ● Otherwise, compare 2014 return to 2013 return if available ● Verify differences are reasonable and taxpayer understands reasons for any “significant” changes NTTC Training – 2014 53

54. TAX-AIDE TaxWise Quality Tools ● No red fields ● No incomplete forms ● Diagnostics NO unnecessary overrides NO e-file restrictions No missing information ● Create “e-File” Clear any error messages NTTC Training – 2014 54

55. TAX-AIDE Quality Review Process ● Verify data entered for state returns, if any ● Verify counselor entered initials in Preparer Field in Preparer Use Form in TaxWise ● QR person enters initials in QR Field NTTC Training – 2014 55

56. TAX-AIDE Quality Review Process ● Review return with taxpayer(s) ● Remind taxpayer(s) that accuracy and completeness of return is their responsibility Volunteer/Site Policies and Procedures – 2014 56

57. TAX-AIDE Common Errors ● Improper SSN ● Incorrect name ● Errors in entry: W-2, 1099R, EIN, name ● Improper entry of 1099 information ● Improper use of Simplified Method 1099-R ● Improper entry of RRB- 1099R ● Entry of 1099-OID as tax exempt ● Improper completion of EIC Worksheet ● Transposed characters/numbers ● Return prepared with out-of-scope issues NTTC Training – 2014 57

58. TAX-AIDE NTTC Training – 2014 58 A good quality review takes time. Do not short-change the taxpayer by rushing through it.

59. TAX-AIDE Quality Review Questions? Comments? NTTC Training – 2014 59

60. TAX-AIDE Identity Theft ● Someone uses another's information, such as name, identifying number, or credit card number, without permission, to commit fraud or other crimes. NTTC Training – TY 2014 60

61. TAX-AIDE Identity Theft ● We see two main kinds e-filed return rejected due to prior use of a SSN or ITIN (most common) Taxpayer who is a known or suspected identity theft victim has a letter from the IRS with an Identity Protection PIN to use when filing their 2014 tax return Volunteer/Site Policies and Procedures – 2014 61

62. TAX-AIDE Identity Theft ● If e-file rejected, give taxpayer: 1. Paper copy of return to mail 2. Letter with instructions 3. Form 14039 – Identity Theft Affidavit ● Usually handled by ERO (Electronic Returns Originator, not preparer) NTTC Training – TY 2014 62

63. TAX-AIDE Identity Theft ● For taxpayers who know they are victims of identity theft ● Ask taxpayer if s/he contacted IRS regarding identity theft or if IRS sent notice of potential identity theft NTTC Training – TY 2014 63

64. TAX-AIDE Identity Theft (cont) ● Enter IP PIN in the software in Identity Protection PIN section Note: e-file return will be rejected if IRS issued PIN is not included NTTC Training – TY 2014 64

65. TAX-AIDE Identity Theft (cont) ● If taxpayer received IP PIN but lost it, have taxpayer call ID Theft Toll-free Hotline: 800-908-4490 ● If hotline provides new IP PIN – e-file ● If not – create paper return and advise taxpayer to follow hotline instructions NTTC Training – TY 2014 65

66. TAX-AIDE Recommendation… In light of increasing identity theft, we now recommend E-filing for all clients, even if they are not otherwise required to file a return. ● From taxpayer’s perspective: Identify identity theft Potentially prevent identity theft Provide documentation of tax status ● From IRS perspective: Incremental “cost” of e-file is low Cost of dealing with identity theft is high ● From AARP perspective: Better tracks activity Creates IRS record of return if questions arise later NTTC Training – TY 2014 66

67. TAX-AIDE Identity Theft NTTC Training – TY 2014 67 Questions? Comments?