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VITA: Enhancing Your Core Competencies Through Tax Service

Accounting students take note!!! The accounting profession has clearly expressed a need to hire accounting graduates with specific core personal, functional, and broad business perspective competencies. The accounting profession evidently knows what it needs in its new hires, has expressed those needs in formal terms and will satisfy those needs through its hiring practices. What does that mean for accounting students such as yourself? It means that unless you enhance your core competencies while still in school you will take the risk of being unemployed once you graduate.

At this stage you may be asking yourself two questions, first ¡°What are the core competencies the accounting profession wants me to enhance?¡± and second ¡°What specifically can I do to enhance my core competencies?¡±.

The best resource for answering the first question is to refer to the American Institute of Certified Public Accountants¡¯ (AICPA¡¯s) Core Competency Framework for Entry into the Accounting Profession (see www.aicpa.org/edu/corecomp.htm). The AICPA has broken out the core competencies into three broad categories: personal competencies, functional competencies, and broad business perspective competencies. In addition, the article titled ¡°Inside the Mind of Your Future Boss¡± by Cynthia Bolt-Lee and Sheila Foster in the October/November 2000 issue of New Accountant provided a good summary of the core competencies and their components. This article will suggest how students can enhance their personal competencies and better prepare themselves for entry into the accounting profession by serving in the Voluntary Income Tax Assistance (VITA) program. It will also discuss how serving in VITA may improve students¡¯ personal financial situations and the communities in which they live.

VITA is a free tax preparation service administered by the IRS for those with limited incomes, individuals with disabilities, non-English speaking and seniors (TCE Tax Counseling for the Elderly is a related tax preparation service). The American Association of Retired Persons (AARP) administers a similar program titled TaxAide. VITA and the other free tax preparation services, rely heavily on volunteers from the communities they serve. VITA volunteers range from retired tax partners, to housewives, to first-year accounting students. These volunteers both provide and receive significant benefits due to their service. Based on the VITA training materials, ¡°Every year more than 71,000 volunteers assist more than 3.5 million persons with their federal income taxes.¡± At current market rates, the tax preparation bill for these 3.5 million persons would be in the tens of millions of dollars.

Enhance Your Personal Competencies through VITA Service
Aside from highlighting the millions of dollars that volunteers can save for those who can afford it the least, I would now like to highlight how students can significantly enhance their ¡°personal competencies¡± through their service in VITA. According to the AICPA, the core personal competencies include professional demeanor, problem solving and decision making, interaction, communication, project management, leadership, and the leveraging of technology to develop and enhance personal competencies.

Over the course of a tax-filing season, volunteers have a wonderful opportunity to enhance their professional demeanor. In the first few volunteer sessions, many volunteers appear disorganized, uninformed and, simply put, unprofessional. However, as the season progresses, the students¡¯ quality of work, efficiency, professionalism, and personal appearance begin to improve. Students begin to organize their thoughts before giving advice, to speak with confidence after researching the facts and to show respect, in spite of personal criticism, throughout the engagement. By improving their quality of work, increasing their efficiency, refining their professionalism and personal appearance, appropriately managing stressful situations, and objectively evaluating criticism, the students begin to be respected as professionals. From the beginning of the tax season to the end, I have noticed significant improvement in man students¡¯ professional demeanor.

In providing a professional-level of service, volunteers are often faced with new and unfamiliar tax situations. Naturally some tax situations are beyond the scope of VITA and the volunteers are trained to refer taxpayers with such situations to a ¡°paid professional preparer¡±. However, many issues are practical problems that volunteers have been trained on but need a little practice in applying. These situations are excellent for improving students¡¯ ability to solve problems and make decisions. They learn quickly how to use decision modeling to analyze a problem by gathering all useful information, analyzing alternatives, arriving at an appropriate decision and implementing a solution. By continually practicing the decision making process students also improve their problem solving abilities.

In a very realistic sense, each new taxpayer brings with her a small shoebox of new problems for the volunteer to solve. The volunteer¡¯s solution to a problem is a complete income tax return. In order to solve the taxpayer¡¯s problems, the volunteer must quickly develop a relationship of trust by interacting with the taxpayer in a friendly, non-threatening, professional manner. If the volunteer fails in the initial interaction phase of the service, the likelihood of errors and dissatisfied clients will increase. VITA volunteers have the opportunity to significantly improve their ability to interact with a diverse group of people ranging from retired executives and immigrant workers to single mothers and struggling students. Volunteers often work in teams to handle unusual issues and to train each other. I have no doubt that these interaction skills will not only benefit students who will become tax consultants but also those who will become financial auditors, consultants, internal auditors, managerial accountants and chief financial officers.

Coupled with an improvement in the volunteers¡¯ ability to interact with others comes an improvement in their communication skills. Volunteers practice interviewing, listening, mirroring, empathizing, and summarizing. The VITA training materials teach volunteers how to set a comfortable tone for the interview by making necessary introductions, engaging in small talk, sharing their intentions and any hopeful results/benefits for the taxpayer and allowing the taxpayer to share any expectations, needs and/or concerns. They are also trained on how to respond with active listening skills by creating a ¡°safe¡± climate, paying attention to nonverbal listening clues and then restating, paraphrasing and encouraging. Other skills taught are checking comfort levels, responding to misunderstandings and overcoming communication barriers. All told, the communication competencies that can be developed in VITA are critical in a diverse corporate world and VITA will provide students a head start in developing them.

Some VITA sites tend to be very busy with more than 100 taxpayers being served per session. Although the leadership and project management skills involved are not highly complex, VITA does provide some good experience for individuals to lead as a VITA administrator. I recall one of my friends in college who was the VITA administrator for a campus of 25,000 students. Her site served thousands of taxpayers and even received an award from the IRS based on the volume of service performed. As an administrator, she was required to organize volunteers, train them, arrange their service schedules, publicize the service, order the tax forms, and report service statistics to the IRS. Naturally she quickly learned to delegate and manage the project for success. The hands on leadership and project management opportunities she had in VITA were excellent supplements to the management courses she took in her masters of accountancy program.

Many VITA sites also provide volunteers the opportunity to leverage technology to develop and enhance their personal competencies. Students learn how to use tax preparation software that will improve their professional demeanor (technology tends to heighten taxpayer¡¯s view of a volunteer¡¯s professionalism) and to use on-line research resources to solve problems and make decisions. Volunteers have the opportunity to use CD-ROM based tax research libraries, on-line resources such as the IRS web-site (www.irs.gov) and other on-line tax sites. The official software to be used in the VITA E-filing (electronic filing) program is comparable to the software used by many large tax consulting practices. By requiring volunteers to use this software VITA effectively give students a technological edge ¡°leg-up¡± if they choose to join a tax consulting practice. Even if students will not work in a tax consulting practice they will become confident in their ability to use tax preparation software in preparing their own personal tax returns and even those of their friends and family.

Enhance Your Personal Financial Situation
Aside from all the professional benefits resulting from a season of VITA assistance, volunteers will also be able to improve their own personal financial situation. Volunteers will be able to grasp the basics of the US federal income tax system, be able to learn to work with it and be able to take specific actions to positively and legally influence their personal tax situation for the better. Students will become familiar with tax planning issues related to the timing of sales and purchases of equity securities, the timing of payments for medical bills, business expenses and charitable contributions, the benefits of tax deferred savings plans and the difference between tax credits and tax deductions. These are only a small sample of some of the most basic concepts that the average US taxpayer should be very familiar with in order to best manage his/her tax situation and which can be learned through VITA. If I were to have my way with the US educational system, I would require all US students to take an introductory federal taxation course that includes some VITA service hours.

Enhance Your Community
When the last tax return is bundled up and sent off, the real redeeming value of VITA goes beyond enhancing your personal competencies and your personal financial situation. It lies in the opportunity to provide a valuable service to those in need. The tax laws have become so complicated that many US taxpayers feel totally incapable of complying with the tax laws on their own. Many of these individuals rely solely on VITA to help them comply. Comments from former volunteers at the Brigham Young University-Hawaii site follow:

  • ¡°I like the VITA. If I am allowed, I would like to do it again next year. It makes me feel good for helping people.¡±
  • ¡°The best part was actually helping people file their tax returns.¡±
  • ¡°The VITA program is excellent, the skills learned and used in VITA will help me for a lifetime. Hands-on experience supplementing the not so easy to understand text is the best way to go.¡±
  • VITA is a wonderful service for students and community alike. By serving as VITA volunteers, students will significantly enhance their personal competencies, their personal financial situations and their community.

For more information, see www.irs.gov and www.aarp.org/taxaide

KEVIN KIMBALL is an Assistant Professor of Accounting at Brigham Young University-Hawaii in Laie, Hawaii.

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