January 2014 Bar Bulletin
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January 2014 Bar Bulletin

In the Trenches: Observations of a Volunteer Tax Preparer

By June Campbell


From the end of January through mid-April last year, I volunteered with the United Way tax program providing free federal income tax preparation. Meeting with low- to moderate-income taxpayers, and preparing and reviewing hundreds of tax returns over the course of the tax season, was a rewarding way to volunteer in my community and provided many insights into the current federal tax code.

The Tax Code Is Needlessly Complicated

Over two full days in December 2012 at South Seattle Community College, I achieved an "intermediate" level of tax preparation knowledge, taking a test and getting my IRS certification to be a volunteer tax preparer. Because Congress had not yet finalized tax provisions for 2012 at the time of our training, the materials were based on the tax code as it existed in 2011. On top of the tax complexities were language issues for many volunteers for whom English was not their first language.

Training on the tangled web of rules regarding adjustments to income, refundable credits and non-refundable credits, exemptions, filing status and deductions, as well as multiple issues with the Taxwise software, moved at a fast pace, leaving many questions to look up and consult with other preparers on site. For example, there are at least four separate programs for educational expenses, each with a separate set of rules, and none of which is particularly generous. Another complicated newer program is the Health Savings Account.

Spending hours working through these rules for the benefit of taxpayers during the tax season, it seemed that it would make more sense to just eliminate all of these cumbersome rules and lower the overall tax rate instead. Let taxpayers spend their money as they wish. Why not invest in students directly through the educational institutions and work on the root causes of high healthcare costs rather than address these issues through the tax code? Why clog the tax code with items for the sole purpose of trying to change people's behavior?

The Tax Code Is Marriage Centric

The first determination to make in preparing a return is filing status and the first question on the filing status decision tree is whether the taxpayer was married on the last day of the tax year. Generally, married filing separately is the worst category to be in, with an unfavorable standard deduction and ineligibility for many tax credits. Being married can also result in more taxes than cohabiting, depending on the incomes of the individuals involved.

Same-sex marriage? Not in the scope of our training and United Way tax preparation services, as legal marriage in Washington was not the same thing as marriage under the federal law, at least while the Supreme Court mulled over the constitutionality of DOMA. One can only imagine the complexities for this year's returns given the Supreme Court's opinion overturning DOMA, with each state having separate rules for marriage.

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