After recently receiving questions about the rules on howvolunteers are paid including those participating in the VolunteerIncome Tax Assistance program, the IRS has issued guidance on whatis and is not allowed.

The agency said its position falls under the VolunteerProtection Act of 1997.

More than an estimated 540 credit unions participate in the IRS'VITA program, according to agency data. The IRS said it allows VITApartners to use federal grant funds to provide stipends tovolunteers within the volunteer return preparation program. Thestipends are a fixed amount of money paid at regular intervals as asalary or to cover living expenses.

VITA grant funds cannot be used to provide compensation for taxassistor/preparer screener or quality reviewer positions, the IRSreminded. However, seven other positions are eligible to receivesalaries, wages and benefits as described in IRS publication1084.

Debra Chandler, national CU relationship manager and senior taxanalyst with the IRS, helps groups establish VITA programs.Chandler said while she is not sure what queries were recentlyasked, she suspects some of VITA's newest partners such as the AARPrequested guidance on volunteer compensation.

“Credit unions have always been in compliance. They're used tobeing regulated and want to do the right thing,” Chandler said.“Credit unions are fact finders. They have been good about checkingand double checking.”

Chandler said when the IRS conducts VITA training sessions eachyear, a segment is devoted to volunteer compensation rules. Inaddition to credit unions, the IRS works with more than 100 VITApartners including the United Way, Goodwill, Native American andHispanic advocacy groups and historically Black colleges anduniversities.

In its most recent guidance, the IRS addressed liabilityprotection for volunteers. The agency said with a few exceptions,no volunteer of a nonprofit organization or governmental entityshall be liable for harm caused by an act or omission of thevolunteer on behalf of the organization or entity if the volunteerwas acting within the scope of the volunteer's responsibilities inthe nonprofit organization or governmental entity at the time ofthe act or omission.

Volunteers will also not be liable if the person was properlylicensed, certified, or authorized by the appropriate authoritiesfor the activities or practice in the state in which the harmoccurred, where the activities were or practice was undertakenwithin the scope of the volunteer's responsibilities in thenonprofit organization or governmental entity. If the harm was notcaused by willful or criminal misconduct, gross negligence,reckless misconduct, or a conscious, flagrant indifference to therights or safety of the individual harmed by the volunteer, thatperson would not be liable, the IRS said.

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