§7526A Return Preparation Programs for Applicable Taxpayers

Summary

Creates a matching grant program to help local groups run or grow free tax-preparation services for low-income and underserved people. The program can pay for normal operating costs like coordinator pay, training and quality reviews, equipment, vehicle costs for remote service, outreach and education about benefits (including the earned income tax credit), and financial education or help setting up savings accounts. Each grant must be matched dollar for dollar by the program. Matching money can be salaries (including fringe benefits), equipment costs, and other ordinary program costs. General overhead or indirect expenses cannot count as matching funds. Groups apply to the Secretary with required information. Priority goes to programs that serve applicable taxpayers, do outreach about income supports, and focus on underserved populations. The Secretary will inspect programs at least once every 5 years. Programs that fail to meet standards cannot get more grants until they document fixes. Key terms (one line each): Qualified return preparation program — helps file Federal returns with at least 90% applicable taxpayers, run by a qualified entity, uses trained volunteers, and reviews 100% of returns. Qualified entity — an eligible organization that meets tax and contract rules and will document matching funds. Eligible organization — includes certain colleges, 501(c) tax-exempt groups, local governments and Indian tribes, coalitions led by an eligible group, or, if needed, State agencies or Cooperative Extension offices. Applicable taxpayer — a taxpayer whose income does not exceed the completed phaseout amount under section 32(b) for a married couple filing jointly with three or more qualifying children, as set in published IRS guidance. Underserved population — includes people with disabilities, limited English, Native Americans, rural residents, members of the Armed Forces and their spouses, and the elderly. Grants may be multi-year up to 3 years. The Secretary normally must not award more than $30,000,000 per fiscal year for these grants (not counting program administration). The Secretary will promote the programs and may share information with taxpayers. Grant programs are encouraged to refer clients to low-income taxpayer clinics and provide clinic contact details.