Accounting education research has provided significant evidence that there is a considerable gap between the skills learned by graduates of accounting programs and those expected by the accounting profession of new hires (Yu, Churyk, and Chang, "Are Students Ready for Their Future Accounting Careers? Insights From Observed Perception Gaps Among Employers, Interns, and Alumni," 10 Global Perspectives on Accounting Education 1(2013); Jackling and De Lange, "Do Accounting Graduates' Skills Meet the Expectations of Employers? A Matter of Convergence or Divergence," 18 Accounting Education 369 (2009)).
A specific setting for student experiential learning is volunteer income tax preparation, where student volunteers must develop a basic understanding of and familiarity with the Internal Revenue Code. Hageman and Fisher ("Student and Professional Attitudes About the Use of the Internal Revenue Code and Treasury Regulations in an Introductory Tax Class," 14 Advances in Accounting Education 213 (2013)) find that this increased familiarity with the Code from training and application to client tax returns through hands-on Volunteer Income Tax Assistance (VITA) program experience increases overall tax proficiency. This supports previous findings by Balden, Stemkoski, Bender, and Allen ("Volunteer Income Tax Assistance (VITA) Program Dramatically Increases Knowledge Retention and Student Skills," 1 Journal of Business & Economics Research 35 (2003)) that students increase their retention and mastery of tax concepts in the classroom as well as show improvement in overall problem-solving skills.
Researchers show that student volunteer experience in a VITA program improves problem-solving skills and fosters a commitment to the profession (Christensen and Woodland, "Is Participation in the Volunteer Income Tax Assistance (VITA) Program Associated With Students' Problem-Solving Skills and Professional Commitment?" 31 Issues in Accounting Education 71 (2015)). They also find a correlation between student participation in a VITA program and ethical decision-making, a soft skill desired in the profession that is not often delivered effectively in a classroom setting (Christensen and Woodland, "An Investigation of the Relationships Among Volunteer Income Tax Assistance (VITA) Participation and Ethical Judgment and Decision Making," 147 Journal of Business Ethics 529 (2018); Cohen, Pant, and Sharp, "An Examination of Differences in Ethical Decision-Making Between Canadian Business Students and Accounting Professionals," 30 Journal of Business Ethics 319 (2001)).
The impact that participation in a VITA program can also have on a student's appreciation of volunteerism should not be undervalued, as most organizations now expect their professional employees to actively contribute time, skills, and money back to society in a variety of charitable ways. To that end, it was found that VITA program volunteers report significantly increased positive attitudes toward volunteering, the role of accounting in addressing social issues, and helping others. They also showed a willingness to offer free representation of low-income taxpayers in the future.
In 2015, Blanthorne and Westin conducted a comprehensive literature review and survey of the VITA program and its integration with accounting education at the collegiate level ("VITA: A Comprehensive Review of the Literature and an Analysis of the Program in Accounting Education in the U.S.," 31 Issues in Accounting Education 51 (2015)). Consistent with all prior research, those surveyed reported that VITA is a positive experiential learning activity, but it is often challenging to maintain a program.
One major issue is finding faculty who are qualified and willing to supervise and mentor the student volunteers (Bauman, Nichols, Anderson, and Outslay, "Pro-Bono Tax Services: The Role of Tax Academics and Students," 36 The Tax Adviser 500 (August 2005)). In fact, the increasing reliance by many colleges and universities on adjunct faculty (who do not have departmental service requirements that serve as an incentive to manage a VITA program) has exacerbated the scarcity of support needed to manage a VITA program, an issue well-documented in other professional programs like accountancy (Fagan-Wilen, Springer, Ambrosino, and White, "The Support of Adjunct Faculty: An Academic Imperative," 25 Social Work Education 39 (2006)).
This column describes two ways to implement volunteer tax preparation into an accounting curriculum and illustrates how to integrate the development of transferable skills and technical content necessary for students to succeed on the CPA Exam and in an accounting career. In addition to preparing students for the profession, a student volunteer tax preparation program can be a significant factor in demonstrating engagement, innovation, and impact for Association to Advance Collegiate Schools of Business (AACSB) accreditation standards. This column is intended to serve as a road map to implementation — with or without the IRS.
Option 1: Integration of VITA into an accounting courseOption 1 integrates an IRS VITA center as an experiential component into an undergraduate tax class. For this junior-level tax course, students are required to participate in the campus-sponsored IRS VITA program in addition to completing more traditional deliverables of exams and research assignments. Participation in the VITA program, in conjunction with completion of the VITA-related class assignments, equals 10% of the course grade. Volunteers prepare approximately 450—500 returns per year, both on campus — for community members who reside nearby — as well as off campus at churches and credit unions in lower-income areas across the city.
Before the semester begins, all students must complete the required IRS VITA training and pass the basic-level certification course, submitting proof of both to the instructor by the second week of class. To help motivate students to take the VITA training and certification exam and participate, other students who have completed the individual taxation class and VITA volunteering in a prior semester offer them tutoring and workshops.
Once class begins, students are paired with the returning volunteers for participation at the tax preparation center, where all student volunteers prepare several client tax returns and directly communicate with clients. Students then draw upon experience from VITA participation to complete assignments that enforce key skills through two types of deliverables discussed below.
Spot cases
One certainty every tax season is that clients will present issues that require additional tax research beyond the basic training. This is an excellent opportunity for a "spot case." With the assistance of the course instructor, student volunteers preparing the return gather facts from the client and then have 24 hours to research the tax issues to come up with a solution that is documented in a tax research memo and a client letter.
During class, the instructor will randomly call on student volunteers to present their spot cases to the class. These spot cases not only reinforce application of skills being developed in the course but also provide a realistic — and often messy — situation in which to conduct tax research, role-play, and practice communication skills shown to be important to the profession (Noga and Rupert, "Reducing Written Communication Apprehension for Students in Tax Classes," 21 Advances in Accounting Education: Teaching and Curriculum Innovations 57 (2017)).
An example of a spot case from a VITA client is presented in Exhibit 1 (below). As there are multiple sites and different students at different sites on different days, cases are constantly assigned, and small groups of students in the course are assigned different cases during the semester. During the semester, students are typically assigned two cases.
Video and brochure
After the April 15 filing deadline but before the end of the semester, students are required to complete a final assignment to develop and reinforce important communication skills, as suggested by the profession. The assignment encompasses two deliverables: a how-to video and a client brochure to educate on a specific tax-reporting topic.
Students are asked to select any topic they encountered during the filing season and record a five- to seven-minute how-to video. This video serves as a mini-lecture for teaching someone with no tax background or experience in the specific subject matter. In addition to the how-to video, students are required to prepare a trifold brochure to teach someone with no tax background the specific rules and applications of the selected topic.
Though the video and brochures have not yet been shared at client sites, the long-term goal would be to educate clients on the issues that often create the most complexity during filing season. Research indicates tutoring and teaching topics to others enhances the tutor's learning and retention. By preparing a video and a brochure to teach a complex topic, the student is explaining and teaching a topic in much the same manner as tutoring in real time.
Observations and suggestions for implementation
This model was implemented for two tax seasons at an AACSB-accredited business school in the Northeast. Student feedback on the experience, as well as learning, was positive. Data collected from students strongly illustrates that they find the practice and assignments to be a positive experience, as well as one in which they learned key skills, based on the pre- and post-test data. Grades earned on spot cases as well as final assessments further demonstrated that mastery correlated with student feedback.
Though not formally surveyed, accounting firms that employ students from this college have also provided positive feedback about the technical and transferable skills of students, as compared with those of students from other colleges and universities. The experience with VITA is often specifically referenced as an example of experiential learning that develops these students more effectively than those in peer schools.
The primary benefits of hosting a VITA center are the skills development for students through experiential learning and, of course, the provision of free tax preparation service to those in need in the community. However, an additional benefit of students' training for and volunteering at a VITA center is increased efficiency and effectiveness in taxation topics in the classroom that comes with an increase in the depth and rigor of topical coverage.
The certification process to become a VITA volunteer is rigid and comprehensive. Successful completion of certification requires in-depth knowledge of basic taxation concepts. A student who has passed the basic certification program and gained experience preparing returns will have background and experience in filing status, exemptions, basic income and expense reporting, and deductions and credits.
Since students will gain this foundation early in the semester through VITA training and experience, instructors can eliminate many assignments on basic tax principles and preparation of tax return forms. Instructors will have the flexibility to cover other topics more in depth for areas of importance, such as property transactions, tax planning, and application of tax principles to case-based situations. They can also assign more research and writing projects, as well as assignments that integrate data analytics into tax, which is a crucial requirement of accounting and taxation programs by firms.
Of course, many accounting programs offer the individual taxation course during both the fall and spring semesters, while the VITA requirement can be completed only in the spring. Departments may need to examine their course scheduling or ensure students can complete this exercise during the spring semester if the individual income tax class does not overlap with filing season.
An option for programs that offer the individual tax class during semesters that do not overlap with the filing season would be to offer VITA service as a separate one-credit course or lab prerequisite prior to the individual tax course. The background learned from the hands-on preparation and deliverables completed ahead of time helps ensure that students enter the class with basic skills and familiarity with tax preparation. This allows the instructor to implement the increased rigor discussed above.
Option 2: Integration of independent free tax services into an accounting course
A second option for integrating volunteer tax preparation into the accounting curriculum is to run an independent volunteer free tax preparation center. The center implementation and operations described here were run outside the scope of VITA and the IRS. All training, recruiting, preparation, and filing was done in-house and on campus.
During the summer before implementation, the instructor worked with a department chair, associate dean, and registrar to create a one-credit course for undergraduate students and a zero-credit course for graduate students. The instructor also coordinated with the university legal department to ensure that the tax preparation center could operate independently. It also developed a waiver for clients to sign before tax preparation. The tax returns were signed with the center name rather than by an individual preparer.
Note: Each state has different rules for the treatment of paid preparers who are not CPAs, enrolled agents, or attorneys. These rules might apply if an employee of the college or university is compensated for overseeing the center and/or perhaps signing returns. Consult with your university's legal department before starting your center because the comfort level with waivers will vary based on the school, state requirements, and the college or university risk management plan.
At the same time, the instructor negotiated the purchase of tax preparation software TaxWise — $199 for a license with unlimited users and support — and worked to set up a curriculum for the class. With the help of two experienced tax preparation volunteers and graduate fellows in the masters in taxation program, the instructor developed a syllabus; resident, nonresident, and code-of-conduct exams; training materials; a reflection paper; and content for a Blackboard course.
Volunteer recruiting began in early November, and the response was strong, though mostly limited to accounting undergraduate and graduate students. The instructor spoke at a Beta Alpha Psi meeting with a panel of returning volunteers, and fliers were distributed around campus, emailed to all accounting majors, and posted on e-boards; the accounting faculty also encouraged students to volunteer. Volunteers signed up for either the undergraduate section or the graduate section, which were capped at 25 and 10, respectively. Once the class was full, volunteers were sent an email and asked to sign a commitment pledge.
On the first day of class, volunteers signed up through an internally developed scheduling software and entered their availability for client appointments. Students were required to complete and pass three take-home certification exams before preparing tax returns, with exams covering topics in a range of areas related to income tax preparation, including resident 1, resident 2, and nonresident and foreign student tax return topics. The exams consisted of multiple-choice questions and completion of a tax return by hand, using paper forms. Volunteers were also required to complete an exam on confidentiality and conduct.
The first three course meetings were reserved for training for the resident and nonresident exams, and the assistant coordinators held office hours for volunteers to get help with their take-home certification exams. They also graded the exams and provided feedback to volunteers with the help of the instructor.
Once tax preparation began, course meetings on Wednesdays consisted of preparing tax returns for scheduled clients, and student volunteers were also required to volunteer at least two Saturdays during the semester. Class attendance was mandatory, and there were very few absences, as the instructor and assistant site coordinators worked from the beginning to impress upon student volunteers the importance of showing up for the clients, many of whom would have taken time off from work or hired child care specifically to come to the center for tax preparation.
In addition to the certification exams and weekly tax preparation, other deliverables included discussion board posts, a final reflection, and, for second-year volunteers, mentoring a fellow volunteer. The discussion board in Blackboard was the hub for questions, concerns, tips, and observations, and, beginning in week 2, students were required to post at least once per week or respond to a fellow volunteer. The final reflection consisted of four parts and was due during the last class session — students read these out loud as part of a class debrief. An example of the final reflection is shown in Exhibit 2 (below).
On the last day of class, after the filing deadline, a volunteer celebration was held to debrief and present some awards to volunteers. Each volunteer chosen for an award — selected by the assistant site coordinators — received a certificate and a $10 gift card. All volunteers received a certificate for volunteering. After the certificates were awarded, students shared their experiences and reflections from the tax season. Student feedback was extremely positive, and many student volunteers were emotional during the sharing and reflection.
Observations and suggestions for implementation
Breaking away from the IRS and creating the University Free Tax Preparation Center was the right choice for this center and these student volunteers. One major reason for the center's success was that its class times fit into the class schedule for undergraduates and graduates. This helped attract a high quality of volunteer, including sophomores and juniors, and yielded repeat volunteers.
In-class training was more convenient and consistent than IRS-led certification training, and students were better prepared for certification exams and for tax preparation. In addition, volunteers flocked to the office hours for help with certification exams, adding to the learning experience. The instructor also created recordings with tips about completing tax returns that were popular with the students for their preparation and review for the certification exams.
From a client service perspective, it is good to have the center located on the first floor in an easy-to-find room. Considering whether a class meets in the room after the center closes is also important, as this was a constant source of stress for the Wednesday afternoon preparation days. Access to a printer and supplies is vital if the center plans to print returns for clients. Waivers are a must-have, as is a well-thought-out process for booking appointments, keeping track of volunteer hours, a preparation process, a review process, and a checklist to get the client out the door. Appointments work well, too, but it is important to consider the possibility of no-shows and to allow for walk-ins.
One final and important consideration is the selection of a site coordinator. In this example, the instructor was a full, tenured professor with nearly two decades of experience working in tax, a decade of experience teaching tax, and a decade of experience running a volunteer tax preparation center. The expertise and confidence of the site coordinator will be a major factor in the center's success. In this case, the center was not counted toward a teaching load, but it is strongly suggested to do that, given the hours one must dedicate for a successful tax season. For example, a dedicated and experienced adjunct with no service requirement could be paid for teaching a course in exchange for running the tax preparation center.
Developing key skills
Pre- and post-test data from the VITA center implementation indicates that this experience effectively increases knowledge in taxation. It also develops key skills that accounting students often lack upon completion of an academic program. Projects such as this make it possible to teach soft skills that are needed for students at the undergraduate level without sacrificing training in the technical skills required by firms and that are part of CPA Examination requirements.
Contributors
Mitchell Franklin, CPA, Ph.D., is an associate professor of accounting in the Madden School of Business at Le Moyne College in Syracuse, N.Y. Michaele Morrow Esdale, CPA, Ph.D., is vice president of finance and operations at Outcome Capital in Boston. Annette Nellen, Esq., CPA, CGMA, is a professor in the Department of Accounting and Finance at San José State University in San José, Calif., and is a past chair of the AICPA Tax Executive Committee. For more information about this column, contact thetaxadviser@aicpa.org.
