Volunteer Income Tax Assistance (VITA) Certification Practice Test

What is the correct course of action for a volunteer when a taxpayer requests to have their tax refund deposited into the volunteer's bank account?

1. Agree to deposit it and give the money to the taxpayer

2. Explain this is not allowed and the taxpayer needs to open their own account

3. Suggest using a friend's bank account for the deposit

4. Acquiesce to keep the situation amicable

The correct answer is: Explain this is not allowed and the taxpayer needs to open their own account

The correct action in this situation is to explain that having the taxpayer's refund deposited into the volunteer's bank account is not allowed. This is in line with IRS guidelines and ethical practices surrounding tax preparation services. The rationale behind this rule is to ensure that taxpayers retain control over their refunds and personal financial information. Having the refund directed to a volunteer's account could lead to potential issues such as claims of misappropriation of funds or even accusations of fraud, which can harm both the volunteer and the taxpayer. Therefore, it's essential for the volunteer to uphold the integrity of the process by directing the taxpayer to open their own bank account if they need one for direct deposit purposes. This approach ensures that the taxpayer's financial interests are protected and that the volunteer adheres to the ethical standards set forth for VITA participants.