AARP Tax-Aide Regional Meetings October 2010

1. AARP Tax-Aide Regional MeetingsOctober 2010

2. Presentation Overview Content • FS 2010 Accomplishments • FS 2011 Volunteer Burden Reduction • FS 2011 Enhancements/Improvements • TaxWise • Quality • Training • Products

3. 2010 Accomplishments Thank you for your service to the American taxpayers!!

4. VITA/TCE Successes Returns prepared 2,985,481(up 0.9%) E-filed returns 2,811,259 (up 2.0%) E-file rate is 94.2% (up 1.1%) Total Refunds $3.5 Billion (up 14.6%) Direct Deposit returns up 5.1%

5. VITA/TCE Successes

6. Partners, Volunteers & Coalitions • 81,426 - (est.) Volunteers worldwide • 12,753 - Volunteer Sites • 4,511 - National & Local Partners • 373 - Community Coalitions

7. AARP Accomplishments

8. 2010 VITA/TCE Quality Statistical Sample (QSS) Review Comparisons

9. FS 2011 Enhancements and Improvements Volunteer Burden Reduction

10. FS 2011 Volunteer Burden Reduction Based on AARP Feedback, the Following Enhancements are Being Worked to Reduce Volunteer Burden: • Introduce no new processes, procedures, etc. after filing season has begun • Complete no Site Reviews during the first week of site operation • Make Publication 4491-W answers available earlier in tax season

11. FS 2011 Volunteer Burden Reduction Based on AARP Feedback, the Following Enhancements are Being Worked to Reduce Volunteer Burden: • Allow use of wireless access to the internet at tax sites • Allow for the filing of state only returns • Modifying requirements to allow for multi-site licensing when one individual is an ERO for multiple sites • Postpone planned reduction of IRS loaned computers

12. FS 2011 Volunteer Burden Reduction Based on AARP Feedback, the Following Enhancements are Being Worked to Reduce Volunteer Burden: • TaxWise Related • Earlier and improved access to TaxWise software for testing purposes • Provide access to computer image earlier in process

13. FS 2011 Volunteer Burden Reduction Based on AARP Feedback, the Following Enhancements are Being Worked to Reduce Volunteer Burden: • TaxWise Related • Strive to reduce number of updates • Improve quality and efficiency of TW Customer Support • Improve and increase communication between TW and partners • Expand and enhance training modules

14. FS 2011 Filing Season Watch List

15. FS 2011 Filing Season • Hot Topics for SPEC • Financial Education and Asset Building • Savings Bonds • Prepaid Cards • Removal of Debt Indicator • Capacity Impact • Impact on Clients • Return Preparer Strategy • Impact on TCE and VITA • Increased Scrutiny

16. FS 2011 Filing Season • Hot Topics for SPEC • Schedule C Pilot • Selected Sites • Expense Limitation to $25,000 • No Employees, Inventory • No Net Operating Losses • Modernized E-file • Health Care • Pending Tax Law Changes

17. FS 2011 Enhancements and Improvements TaxWise

18. FS 2011 TaxWise • Improved Customer Service • Enhanced Communications • Improved Business Continuity • New Interactive Training

19. FS 2011 TaxWiseSoftware Enhancements Beginning with FS 2011, users have the ability to: • Switch between interview and form mode in TWO similar to Desktop • Allow Administrators to mandate use of interview mode • Setup up staging groups in TWO similar to Desktop. • Restrict preparers use of override • delete rows on worksheets and statements • Move the “efile” button to the top of screen

20. FS 2011 TaxWiseSoftware Enhancements Added: • New Reviewer role • Three new Prep Use Fields • Time out reminder • Fixed “zero” • Activated “Control E” functionality • Form 13614C will be populated through the interview

21. FS 2011 Modernized e-File (MeF) • Faster acknowledgements • Electronic signature process • Attachments • Amended returns • Prior year returns • Year-round filing • Specific explanation of errors

22. FS 2011 Modernized e-File (MeF) The 1040 MeF Program will be implemented in a three-phase strategy over three years • Phase I – Piloted February 2010 • 23 forms and schedules • Phase II – Rolls out January 2011 • Prior year 2009 tax return • 23 forms and schedules • Phase III – January 2012 • Current tax year 2011 • Approximately 151 forms and schedules • Original 23 plus 128 new forms/schedules • Prior tax years 2010 and 2009

23. FS 2011 Modernized e-File (MeF)

24. FS 2011 Modernized e-File (MeF) 2010: AL, AR, CO, CT, DE, HI, GA, ID, IA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MT, NE, NC, ND, NJ,OH, OK, OR, PA, RI, SC, UT, VT, WV AND WI (33) 2011: AZ, DC, MN, NM and VA (5) 2012: MS and NY (2) No State Income Tax – AK, FL, NV, NH, SD, TN, TX, WA, WY (9) CA will launch own program (1)

25. FS 2011 Enhancements and Improvements Quality

26. FS 2011 Quality Form 13614-C Intake/Interview and Review Sheet Updated • Added an IRS email address and toll free number if problems are identified at the site. • Volunteers will check only one box on the Quality Review Checklist (Section C). • Section B is not required if Part II, Question 2 is blank • A column for taxpayers to check “unsure” in Parts III, IV, and V • Form numbers added where applicable

27. Quality Enhancements: Minor wording changes to Quality Site Requirements Will not conduct QSS and Criteria Reviews during the first week sites are open FS 2011 Quality

28. FS 2011 Enhancements and Improvements Training

29. FS 2011 Training Tax Year 2010 Training Products updated by SPEC/Partner Teams: • Testing Materials - Printed and Link & Learn Taxes version - Publication 4189 & Form 6744 • Student Workbook - Comprehensive Problems & Exercises Workbook - Publication 4491-W (Development and Review Team) • e-file Administrator & the Volunteer Resource Guides - Publications 3189 and 4012 (TaxWise Yellow & Blue Tabs) • Training Products Quality Review – Publications 4491 and 4012 (Tax Law White Tabs) • “Optional” Online Module Training and Certification Test – Health Savings Accounts (HSAs) and Cancellation of Debt (COD) AARP Tax-Aide played a significant role on the above Teams.

30. FS 2011 Training Changes - Tax Year 2010 Training Products: • VITA/TCE Forms 1040, 1040A, 1040EZ overprints orderable - Plan to discontinue overprints in Filing Season 2012 • Combining student and instructor guides - Publications 4491 and 4555 • Instructor guidance on IRS.gov - Publication 4555-e • Revising 'Vanessa Franklin' (Appendix A) and discontinuing Appendix B • Instructor and student evaluation forms (Form 13222 and 13232) will be a web-based product • Testing materials (Form 6744 and Pub. 4189) will be printed on a the same or similar stock as Pub 17 • Only one set of blank forms will be in printed training products (Pub 4491-W and Form 6744) . Considering discontinuing publishing blank forms in Filing Season 2012.

31. FS 2011 Training New In-Scope VITA/TCE Topics for Year 2010: • Schedule C (with limitations) • Form 5329, Additional Tax on Early Distributions, Part I (exceptions) • Schedule K-1 – Royalty Income • Cancellation of Debt (COD) – Credit Cards * • Health Savings Accounts (All aspects of HSAs will not be included) * * COD and HSA topics: “Optional” online training module and certification test. Volunteer must have Advanced, Military, or International Certification to take COD or HSA test.

32. FS 2011 Training Many Key Individual ARRA Tax Benefits are still available in 2010: • Making Work Pay Credit • Homebuyer Credit • Temporary increase in Earned Income Credit • Temporary increase in refundable portion of Child Tax Credit • American Opportunity Tax Credit • Residential Energy Credits Visit www.irs.gov for the most up to date information on ARRA and other tax law changes.

33. FS 2011 Enhancements and Improvements Products

34. FS 2011 Products Training Products Available: • Advance copies of the printed training products (late October) (no paper copies; CD-ROMs) • Volunteer Training Kits: Pubs 4491 & 4480 – Late November (Before Thanksgiving) • Online e-learning: Link & Learn Taxes & Practice Lab – Early November • Workbook Problems & Exercises: Pub 4491-W (Tax Year 2010 Answers) – Late November (Posted on IRS.gov - Partner/volunteer Resource page) • Training Supplement: Pub 4491-X - Mid December

35. FS 2011 Products Product Ordering – CAPS Records/Account Review • Electronically based process. • Designed to decrease the paper load. • Currently verifying e-mail and physical addresses, closing inactive accounts, etc. • SPEC and National AARP Tax-Aide are working together to eliminate duplicate accounts. • Updating CAPS database to ensure the correct person receives the 2010 e-order form.

36. FS 2011 Products Product Ordering - Benefits of Electronic Ordering Process for SPEC Partners include: • Less transcription errors. • No lost or misplaced paper orders. • No faxing from partner to SPEC, and then to NDC. • Electronic proof of all orders received. • An electronic acknowledgement of order receipt. • A second electronic receipt when the order is approved by SPEC. • An e-mail notification is sent each time a shipment is sent from the NDC.

37. Thank you. You make a difference!