Standards of Conduct (Ethics) Training

1. Standards of Conduct (Ethics) Training A Guide for AARP Foundation Tax-Aide Volunteers

2. Agenda Overview • Volunteer Agreement (Form 13615) • Understanding the six (6) Volunteer Standards of Conduct (Form 13615); • Applying tax law ethically and accurately; • Reporting possible violations; • Consequences of failure to adhere to the program requirements; and • Examples of situations that raise ethical questions.

3. Unethical Defined • According to IRS-SPEC: • “not conforming to agreed standards of moral conduct, especially within a particular profession”. • Intent to disregard established laws, procedures, or set policies. • Not to be confused with a lack of knowledge or a simple mistake.

4. Volunteer Standards of Conduct • Form 13615, Volunteer Standards of Conduct Agreement, applies to all conduct and ethical behavior in the AARP Foundation Tax-Aide Program. • All Volunteers must agree to the standards of conduct prior to working at a Tax-Aide site (i.e. leadership, preparers, greeters, and client facilitators) • Responsibility of all volunteers is to provide the highest quality and the best service to taxpayers

5. IRS Six Standards of Conduct • Follow the Quality Site Requirements (QSR) – (i.e. 10 QSR – PowerPoint presentation sent to each LC in November, same as IRS Site (Local) Coordinator Training) • Not accept payment or solicit donations for federal or state tax return preparation • Not solicit business from taxpayers I assist or use the knowledge I gained (their information) about them for any direct or indirect personal benefit for me or any other specific individual

6. IRS Six Standards of Conduct(continued) 4. Not knowingly prepare false returns 5. Not engage in criminal, infamous, dishonest, notoriously disgraceful conduct, or any other conduct deemed to have a negative effect on the VITA/TCE Program 6. Treat all taxpayers in a professional, courteous, and respectful manner

7. IRS Quality Site Requirements (QSR) • QSR#1, Certification; • In order to answer tax law questions, instruct tax law classes, prepare or correct tax returns, and/or conduct quality reviews of completed tax returns, must be certified. • As part of certification, volunteers must pass a Basic, Intermediate and Advanced test developed by the IRS.

8. Quality Site Requirements (QSR) - continued • QSR#2, Intake/Interview Process; • All sites must use the IRS Form 13614-C, Intake/Interview & Quality Review Sheet, for every return prepared. • The electronic Form 13614-C, available in TaxWise interview mode, may be used in lieu of the paper Form 13614-C.

9. Quality Site Requirements (QSR) - continued • QSR#3, Quality Review Process; • All returns must be quality reviewed and discussed with the taxpayer; • Complete Section C of the intake form (Form 13614-C) • QSR#4, Reference Materials; • All sites must have the following on-site:  • Pub 4012, Volunteer Resource Guide • Pub 17, Your Federal Income Tax for Individuals

10. Quality Site Requirements (QSR) - continued • QSR#5, Volunteer Agreement; • All volunteers (preparers, quality reviewers, greeters, etc) must complete the Volunteer Standards of Conduct Training; and • Certify to their adherence by signing Form 13615 prior to working at a site. • QSR#6, Timely Filing; • All sites must have a process in place to ensure every return is electronically filed or delivered to taxpayer in a timely manner

11. Quality Site Requirements (QSR) - continued • QSR#7, Title VI - Civil Rights Act of 1964 • Title VI of the Civil Rights Act of 1964 information, AARP Foundation Tax-Aide poster D143 must be displayed • QSR#8, Site Identification Number • Site Identification Number (SIDN) must be included on ALL returns prepared by VITA/TCE sites.

12. Quality Site Requirements (QSR) - continued • QSR#9, Elect Filing Identification Number; • The correct Electronic Filing Identification Number (EFIN) must be used on every return e-filed • EFIN is found on Form 8879 • QSR#10, Security, Privacy & Confidentiality • All guidelines discussed in Publication 4299, Privacy, Confidentiality, and Standards of Conduct – A Public Trust must be followed

13. Failure to Comply • By law, tax return preparers are required to exercise due diligence in preparing or assisting in the preparation of tax returns • At times taxpayers and preparers have evaded the system by filing fraudulent returns • IRS and the AARP Foundation have the responsibility for providing oversight to protect the programs’ integrity and maintain taxpayer confidence

14. Impact on the Program if Standards are not followed Any or all of the following actions may occur if standards are not followed: • Volunteer(s) are removed from the program; • Tax sites are closed due to unethical behavior or not following Quality Site Requirements; • Partnership between the IRS and the sponsoring organization is terminated; • IRS support is discontinued;

15. Impact on Program(continued) • Sponsoring organization’s grant funds are revoked or retrieved; • IRS EFIN is deactivated; • All IRS products, supplies, and loaned equipment are removed from the site; • All taxpayer information is removed; • Use of IRS-SPEC and AARP Foundation logos is disallowed.

16. Taxpayer Impact if Standards are not followed • Taxpayer is responsible for paying the correct amount of tax due under the law • Volunteers correctly apply the tax laws to the taxpayer’s situation but may be tempted to bend the law to help taxpayers: • Taxpayer may be subject to the examination process including appeals, litigation, and collection • Could cause problems with service when taxpayer returns to the site the next year and refused same type of service

17. Criminal Investigation • Taxpayers and return preparers who violate the tax law are subject to various civil and criminal penalties; • Preparation of a knowingly false or fraudulent return is subject to criminal punishment; • IRS-SPEC will refer violations to the IRS Criminal Investigation Division or the Treasury Inspector General for Tax Administration.

18. Volunteer Protection Act • Public Law 105-19, Volunteer Protection Act of 1997 (VPA) • Protects volunteers from liability for negligent acts they perform within the scope of their responsibilities in the organization for whom they volunteer • Volunteers must be following policies and procedures, including required training • Harm must not be willful

19. Who is a Volunteer?(Volunteer Protection Act) • “volunteer” is an individual performing services for a nonprofit organization or a governmental entity who does not receive:  (a) Compensation (other than reasonable reimbursement or allowance for expenses actually incurred), or   (b) Any other thing of value in lieu of compensation in excess of $500 per year, and such term includes a volunteer serving as a director, officer, trustee, or direct service volunteer

20. Contacts for Referring Problems • Local Coordinator is the first point of contact for resolving any problems you encounter; or • AARP Foundation Tax-Aide incident report should be completed

21. Contacts for Referring Problems (continued) IRS Contact Information: • E-mail IRS at WI.VolTax@irs.gov, call toll free 1-877-330-1205, and/or contact your local IRS-SPEC relationship manager; • Refer taxpayers who are victims of identity theft and that theft has affected their current federal income tax return (Identity Protection Specialized Unit at 1-800-908-4490)

22. Contacts for Referring Problems (continued) • Refer taxpayers with balance due notices or installment agreement requests to local Taxpayer Assistance Center or call IRS toll free at 1-800-829-1040. • Refer federal refund inquiries to www.irs.gov and click on “Where’s My Refund” or call 1-800-829-1954 or 1-800-829-4477.

23. Taxpayer Advocate Service (TAS) • Taxpayer Advocate Service (TAS) might be able to help: • If taxpayers come to a VITA/TCE site with a tax problem and have been unsuccessful in resolving their issue with the IRS, or • If taxpayer is experiencing a significant hardship as the result of a tax problem. • For more information, taxpayers can call toll free, 1–877–777–4778 (1–800–829–4059 for TTY/TDD).

24. Example #1Not Reporting Cash Income • Self-employed taxpayer has a 1099-MISC with income reported in Box 7; • Taxpayer tells volunteer they also have “cash income” not reported on a 1099-MISC; • Volunteer tells taxpayer he does not need to report the cash income because the IRS may not catch it; • Volunteer completes Schedule C without the cash income. You are the Local Coordinator, what do you do?

25. Example #1What Should You Do? • What Standard of Conduct was violated? #4 (should not knowingly prepare a false return) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

26. Example #2Claiming a Person as a Dependent • Taxpayer lists a person who was “not related” but a child of a personal friend who was not claiming this child as a dependent; • Volunteer stated that, although the child was not a “qualified child or relative”, since no one else is claiming the child it would be OK to put this person on the return; • Volunteer completes Form 1040 claiming the dependent. You are the Local Coordinator, what do you do?

27. Example #2What Should You Do? • What Standard of Conduct was violated? #4 (should not knowingly prepare a false return) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

28. Example #3Using Volunteer’s Account # • Taxpayers indicate on Part V of intake sheet that they have no bank account for direct deposit; • Taxpayer is entitled to refund of $1200; • Volunteer says direct deposit of refunds to bank account are available within 7-10 business days; • Volunteer says he could have refund deposited to his bank account and, when received, would contact taxpayer to give them their money; • Return completed with volunteer’s account #. You are the Local Coordinator, what do you do?

29. Example #3What Should You Do? • What Standard of Conduct was violated? #3 (should not solicit business from taxpayers I assist or use the knowledge I gained about them for any direct or indirect personal benefit for me or any other specific individual) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

30. Example #4Making a Personal Advance • Volunteer noted the taxpayer was single and asked if she would like to meet some evening at a local bar; • Taxpayer stated she was uncomfortable with meeting him and would prefer he not call her; • Taxpayer reported the conversation she had with the volunteer to the Local Coordinator before she left the site. You are the Local Coordinator, what do you do?

31. Example #4What Should You Do? • What Standard of Conduct was violated? #6 (should treat all taxpayers in a professional, courteous, and respectful manner) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

32. Example #5TP Files a Fraudulent Return • Taxpayer stated they did not want to report capital gains because their sales price was equivalent to or higher than the cost basis; • Volunteer told taxpayer that, if audited or received a letter from the IRS, amounts would have to be supported by written statements or other documents of the purchases; • Taxpayer understood, but did not care and wanted return completed as was. You are the Local Coordinator, what do you do?

33. Example #5What Should You Do? • What Standard of Conduct was violated? #4 (should not knowingly prepare a false return) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

34. Example #6Volunteer Commits Criminal Act • Local Coordinator learns from other volunteers that volunteer has been arrested for a crime; • Volunteer comes to site and Local Coordinator speaks to him privately; • Local Coordinator learns volunteer got into an altercation at a bar and is out on bail; • Local Coordinator asks if it is true he had prior arrests and altercations with the law; the volunteer says it is true. You are the Local Coordinator, what do you do?

35. Example #6What Should You Do? • What Standard of Conduct was violated? #5 (should not engage in criminal, infamous, dishonest, notoriously disgraceful conduct, or any other conduct deemed to have a negative effect on the VITA/TCE Program) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

36. Example #7Volunteer Argues with Taxpayer • Local Coordinator is called by center stating volunteer had an argument with taxpayer causing major disruptions at the site; • Many taxpayers were upset and left; • Coordinator talked to volunteer; volunteer said taxpayer was upset because he did not believe what could be claimed or not on his return; • Volunteer admitted he got angry because he did not like what taxpayer said to him. You are the Local Coordinator, what do you do?

37. Example #7What Should You Do? • What Standard of Conduct was violated? #6 (should treat all taxpayers in a professional, courteous, and respectful manner) • The local Coordinator should discuss the incident with immediate supervisor • AARP Foundation Incident Review Protocol should be followed

38. Ethics Training QUESTIONS? COMMENTS?