Monday, February 21, 2022

Union College VITA site operations update and FAQ

UPDATED as of Tuesday March 29, 2022:  

All operations still Fully Remote with a backlog of returning clients.  

Unable to serve any new clients at this time.  We expect to expand operations in 2023.

We apologize but we are unable to respond to the huge volume of inquiries by phone at this time.  The best way to reach us is our address.

At this time, Union College VITA site is the ONLY operating VITA site in Schenectady County, according to the IRS database.  

There used to be six VITA/TCE sites in Schenectady County.  All the other sites in Schenectady County have unfortunately closed.  As a result, we are overwhelmed and swamped with demand.  Our storefront site at the Kenney Community is tiny and with Omicron rates still high and many of our long time clients medically vulnerable and/or elderly, it would be unsafe to operate in a face to face modality.

The Union VITA operations mode currently is virtual/remote only.  As infection rates hopefully continue to decline and the weather improves, we hope to add a Valet VITA option and possibly other forms of face-to-face in person VITA in suitable, large well-ventilated spaces at nearby community nonprofits.  We will update this page when that happens.

In addition, we are still testing out our 2022 filing season software on taxpayers we have served in previous years. Normally we close in early/mid March.  We are planning to stay open later than usual this year to accommodate the overwhelming demand and take more new clients this year.

We have a strong goal of educating taxpayers to help them learn to take pride and ownership in the accuracy of the returns we assist them in preparing.  We painstakingly confirm and explain every line on our clients' returns before asking our clients to sign electronically to authorize efiling their returns.  We don't want our clients to authorize us to efile their returns before all their questions have been answered.

Frequently Asked Questions:

Q: Obviously Union College VITA can't prepare the returns of every qualifying taxpayer in Schenectady County.  What are other free options for low and moderate income taxpayers in this area?  Do any of them offer traditional in-person VITA?

There are some other VITA sites in Albany, Rensselaer, and Saratoga Counties, unfortunately again, fewer  than there used to be.  You can check the IRS database to find other VITA sites in adjacent counties.  At this time, the closest site listed is 14 miles away from ours.  Most of the other sites in this area offer traditional face-to-face traditional VITA.  

You can also call the United Way CA$H Coalition, of which the Union College VITA site is a member, at their 2-1-1 phone number to make an appointment through them.  The CA$H Coalition offered Valet VITA options last year and is working on offering them again later this filing season.

NYS Department of Tax & Finance also offers a great remote virtual webinar program where they will coach taxpayers through do-it-yourself prep of federal and NY tax returns using free Facilitated Self Assistance software.

Q: What are Union's remote options at this time?  Do you have plans to offer more options later in the season?

Union College VITA currently offers two remote options

Option 1) Our remote Facilitated Self Assistance (FSA) option.  This model is available for taxpayers in the Capital District with income under $73,000, both returning AND new.  Under this model, you would email us to request a link to a secure website where you would be preparing your own return in FREE  consumer-friendly do-it-yourself software.  It is a consumer version of the same professional software our volunteers use.  If you have questions as you are working on your return, you can email us for answers to your questions as you work on your returns.  If there is anything you are unsure about, we urge you to talk it through with us before you efile.  This can be a great opportunity to take ownership and pride in preparing your own tax return. 

Option 2) Union's remote Virtual VITA site is available for taxpayers in the Capital District with incomes under $58,000.  At this time, we can only serve our returning clients in this option.  Each week in March we will revisit the question of whether we can take in new clients and update this page.  In this program, you would email us to request that send you a secure link to a website where you can upload photos of your tax documents.  We would then conduct to "soup to nuts" full service preparation of your taxes, communicating with you via phone, text, email, and/or Zoom, depending on your preferences as your return works through our remote process.  The secure platform we use to host your tax documents was created by our partners at Code for America.

Option 1 is best for those with relatively simple tax circumstances, as well as comfort with using a computer with remote assistance.

Option 2 is best for those with more complicated returns, especially households with children potentially eligible for refundable credits.  You can use either a smart phone or a tablet or laptop to send us photos of your tax info.  

Unfortunately, both of the above options require some degree of comfort with technology, as well as access to a computer or tablet or smartphone.  

Remote VITA is great in some ways (it removes barriers of travel, parking, weather, childcare and also allows us more flexible scheduling) but sometimes frustrating in others.  The software we use is great when it works smoothly (which is MOST of the time) but can occasionally be frustrating to navigate.

So we are hoping and planning to offer in-person versions of both of the above options later during this filing season as the weather improves and infection rates continue to decline.  Possibilities we are working on with the United Way CA$H Coalition include helping taxpayers at in-person FSA or in-person "Valet VITA"events hosted at nonprofits in Schenectady with large, well-ventilated spaces and good secure wifi.

What exactly is Valet VITA?

Valet VITA is a hybrid remote option.  You would travel to a site hosted by a local nonprofit where you would do a face-to-face intake interview and sign a consent that gives us permission to scan your tax documents into our system.  Then you would leave and we would work on your tax return, contacting you by phone or Zoom to answer your questions.  A week or so later you would return to the same site to review the tax return we have prepared for you.  After all your questions have been answered and we confirm all the information on the return with you, you would sign an authorization to efile and then we would efile your return.

How does in-person FSA (sometimes called FSA) work?

FSA is a do-it-yourself model.  In-person FSA means you would be working in a community space at a local nonprofit with IRS certified VITA volunteers circulating around the room to answer questions as needed in person. You could either bring your own laptop OR use a computer provided by the host site.

Who is staffing Union College VITA this year?

As always, Union VITA is staffed by IRS certified VITA volunteers.  In the past, Union College VITA volunteers were concurrently enrolled in Union's Economics 391, Income Tax Policy & Practice class.  This year, the class is not being offered, but alumni of prior year Eco 391 classes have stepped up to assist.  The CA$H Coalition has also recruited community volunteers to help us with many years of experience at other sites that are now closed.

Sunday, February 6, 2022

The biggest cause of Errors and Robo-Audits for Low and Moderate Income Taxpayers may surprise you

The rules for who is allowed to claim a dependent are VERY confusing.  The rules are really hard to navigate.  There are many different types of dependents and which set of rules applies can be super-confusing!  

Thousands of dollars in refundable state & federal credits can be at stake if the wrong taxpayer claimed a dependent!   Robo-Audit letters are very common for low income families with children who qualify for refundable credits.  The Robo-Audit letters are confusing and intimidating, and many taxpayers who filed correct returns do not understand how to respond to them.

An ounce of prevention is worth a pound of cure.  A mistake is much harder to fix after you submit the efile than before.  Tricky situations where you will want to reach out for help BEFORE you file include: 

1) A Qualifying Child dependent who lived in multiple households during the tax year and/or was supported by more than one taxpayer.   The tie-break rules for which taxpayer gets to claim such a dependent can be very tricky.  Over the years, we have seen a lot of prior year returns prepared by paid tax preparers who got that wrong.  We have been able to amend the return so the taxpayer entitled to claim the Qualifying Child gets their rightful tax credits.

2) If a teenager under 19 has substantial income of their own from a part-time job, it can often be tricky to figure out if they are still a dependent of the parent who is providing the roof over their heads.  This is a question where a Zoom or speakerphone call with the parent and teen to clarify the dependency issue BEFORE either the parents or teens file can save a lot of trouble.  

3) If a young adult under 24 was enrolled in higher education last year, the dependency rules can again be hard to navigate.

4) If a disabled adult of any age was living with a relative, the dependency rules can get complicated.

5) Multigenerational households can also be confusing to sort out.  Typical issue:  grandparent, parent, grandchild all live in a home and perhaps an aunt or uncle too.  Multiple adults may contribute to the support of the household and/or the grandchild.  Who gets to claim a young child can make a huge difference in the refunds for the taxpayer claiming the child.

Robo-Audits are common in these situations even if the taxpayers did everything right.  

If you claimed a child in any of the above situations, you may very well get a Robo-Audit letter.  The letters are confusing and bullying in tone.  The National Taxpayer Advocate has studies showing that many taxpayers who get such letters filed correct returns, but are so confused or intimidated by the language in the letters that they fail respond to them.

Don't ignore audit letters of any kind, including Robo-Audit letters and don't sign anything you don't understand.  

Before you file:  do your research and talk it over with a knowledgeable VITA volunteer if you are unsure.  

Go-to resource for anyone unsure whether they can claim a dependent:  read VERY carefully the seven pages in Tab C (pages C1-C7) in IRS Pub 4012, the so-called "VITA Bible."  Don't overlook the sometimes critical footnotes on these 7 pages about dependents.  An ounce of prevention is worth a pound of cure.  If you are not sure, consult a knowledgeable VITA volunteer.

After you file:  Don't ignore scary IRS letters you don't understand.  They do NOT improve with age.  If your return was prepared at the Union College VITA site, please email Professor Mary O'Keeffe at immediately to discuss what documents you need to gather to support the dependents claimed on your return, and how best to respond.  Possible options including reaching out to your local Taxpayer Advocate at the IRS Taxpayer Advocate Service or your nearby Low Income Taxpayer Clinic.

Saturday, November 27, 2021

Fascinating moments in public finance history

I have lately been reading a lot of American history. Currently working my way through Andrew Roberts' The Last King of America: the misunderstood reign of George III, page 112-113 excerpted below.
On 19 March 1763, on Charles Townshend's proposal, a Bill was introduced to reduce the duty on West Indies molasses, in order to help Rhode Island rum distillers. Back in 1733, the Molasses Act had imposed a deliberately prohibitive duty of sixpence per gallon on the importation of all foreign (effectively French West Indian) molasses into Britain and the British colonies. Because British West Indies plantations did not produce enough molasses to satisfy the huge North American demand for rum, it had led to widespread smuggling into the thirteen colonies: merchants would bribe corrupt customs officials roughly a penny a gallon to underreport the quantity of molasses on board their ships by a factor of ten.*
The asterisked footnote particularly intrigued me:
*Although they lied to the Revenue, the merchants insured their ships for the correct amount, which is how historians were able to spot the discrepancies.
The Molasses Act had been intended to harm not the American rum industry but the French West Indian planters. It had initially been passed for five years and was regularly extended, and after coming before the Commons' Expiring Laws' Continuance Commitee on 9 March it was decided ten days later to renew it for another year, only with Charles Townshend's amendment to reduce the duty to twopence. ... This two-thirds reduction was proposed 'the more effectually to secure the payment of it.' British ministers believed it was necessary to control colonial smuggling which had become so well established in America that iwas considered almost customary. Agents of the American colonies argued that the duty ought to be set at one penny, which Thomas Hutchinson, Lieutenant Governor of Massachusetts, reported to London 'would be generally agreeable to the people here, and the merchants would readily pay it.'
The Lieutenant Governor's assertion seems quite plausible, given that the merchants were already paying one cent per gallon in bribes! Of course, the corrupt customs officials might not be too happy with the improved compliance, since their lucrative bribes would dry up if tax compliance improved. However, Townshend did not heed this and stuck with the two-pence proprosal. The book goes on:
Charles Townshend made 'heavy complaints' in his speech to the House of Commons Ways and Means Committee about 'the state of our revenues in North America', which at that time amounted to less than the 7,000 pounds it cost to collect. The King's response to Townshend's proposal to reduce the molasses duty by two-thirds was to complain vociferously.

Wednesday, February 17, 2021

Union College VITA 2021 Tax Team: Ingrid Burke

Hello! My name is Ingrid Burke. I am a junior at Union College and I am majoring in economics. The areas of tax policy that I am most interested in are retirement, charity, and education taxation. 


Union College VITA 2021 Tax Team: Kaila Paguio


I'm Kaila Paguio, a junior at Union College. I'm studying economics with a math minor. I'm interested in learning about tax policy and how it can fight poverty and reduce income inequality. My favorite part of the class is helping low-income families get their maximum refund.

Union College VITA 2021 Tax Team: Helen Wong


My name is Helen Wong and I am currently a junior at Union College. I am originally from San Francisco, California and I am pursuing a double major in psychology and economics. I am most interested in learning more about tax policies that impact low-income households since it is a subject that impacts my family and I personally. Outside of my academic interests, I love reality tv (especially 90 Day FiancĂ©), eating good food, and occasionally reading comics.

Union College VITA 2021 Tax Team: Tad Ye


Hello! My name is Tad Ye, I am currently a junior studying economics and computer science. I am originally from Brooklyn, NY. This course has allowed me to learn more about tax policy and apply the learning in helping the people around the community complete their tax returns. Ever since my first job I always wonder why did I not get the full wage I was promised? But with this course I understand different tax policy and what is intriguing is the different tax credits individuals are qualified for! With the new $300 cash donations for qualified charities for people who do not itemize it encourages everyone to give back!