Volunteer Income Tax Assistance (VITA) Certification Practice Test

True or False: You do not need to see proof of insurance coverage for a taxpayer if the information is not unusual or questionable.

1. True

2. False

3. Only if the taxpayer claims not to have insurance

4. It varies by site policy

The correct answer is: True

The statement that you do not need to see proof of insurance coverage for a taxpayer if the information is not unusual or questionable is accurate. In the context of the Volunteer Income Tax Assistance (VITA) program, tax preparers are expected to rely on the taxpayer's verbal confirmation of their insurance status unless there are indications that warrant further verification, such as unusual circumstances or discrepancies in the provided information. When a taxpayer's response about their insurance coverage appears straightforward and consistent with the information provided on their tax return, the VITA guidelines generally do not require the preparer to obtain additional documentation for proof of insurance. This practice helps to streamline the tax preparation process and reduces burdens on both the taxpayer and the volunteer preparers. In cases where taxpayers claim not to have insurance, additional scrutiny is warranted, which aligns with knowing how to handle those situations appropriately. However, the overarching principle remains that, in the absence of unusual or questionable information, proof of insurance coverage does not need to be seen.