Volunteer Income Tax Assistance (VITA) Certification Practice Test

What is a recommended practice for volunteers when they suspect a taxpayer is not being truthful?

1. Continue to prepare the return to maintain good service.

2. Confront the taxpayer directly about dishonesty.

3. Gather additional information to clarify discrepancies.

4. Report the taxpayer to the IRS.

The correct answer is: Gather additional information to clarify discrepancies.

When volunteers suspect a taxpayer may not be being truthful, the recommended practice is to gather additional information to clarify any discrepancies. This approach is important for multiple reasons. First, it allows the volunteer to address any uncertainties in a respectful and non-confrontational manner, fostering a safe environment for the taxpayer to explain themselves. Second, obtaining more information can help volunteers understand the full context of the situation, which is essential for accurate tax preparation. By seeking clarification, volunteers can identify whether the perceived dishonesty stems from a misunderstanding or lack of knowledge about tax laws rather than intent to deceive. This practice aligns with the principles of integrity and service that underpin volunteer tax assistance programs, ensuring that the preparation process remains professional and focused on accurate reporting. Continuing to prepare the return without addressing the issue could lead to inaccuracies and may inadvertently facilitate tax fraud. Confronting the taxpayer directly could damage the trust and rapport built during the interaction, and reporting the taxpayer to the IRS should be a last resort, typically reserved for clear cases of intentional wrongdoing. Thus, gathering more information is the most constructive and effective way to handle suspicions of dishonesty.