If an employee has learned to do taxes on his own, can that employee prepare taxes at no charge for low-to-mod income on behalf of the bank during bank hours to count for CRA service hours credit? I'm confused whether this qualifies for a couple of reasons: not really offering banking/financial expertise, plus the fact the bank says it does not offer tax advice, even disclaiming this in some marketing material that customers should consult their tax advisors. Yet, here we are providing tax advice and doing taxes as a rep for the bank to count it for CRA credit?

No question the prep of LMI tax returns at a sanctioned VITA site is a CD service by a bank employee representing the bank. Those volunteers have been trained by the IRS and qualified to prepare returns, again, at an approved VITA site.

I believe your concerns are important. Your bank, preparing tax returns, on its property. I am not at all comfortable with that.

But others may do this and get credit. Let's see what the gurus say.

No, the employee is not doing tax prep on site, but at a LMI school that has set up a room for doing so.

I wasn't sure tax preparation would be counted as a financial service provided because this does not fall under what the bank offers and was concerned about doing so when we tell customers we do not provide tax advice.

I can see the bank sponsoring the funds/donations to provide tax prep services for LMI, and have that count for CRA, but to have an employee actually do taxes just didn't seem to fall under that, anymore than an employee advising LMI individuals about any other topic. But you are saying it does. Thanks for your input.

I'm with Pale. I think VITA is a great way to get CD service consideration. I would be very concerned if an employee just decided to do these tax returns as a "lone wolf." The umbrella of VITA ensures that the preparers are well-trained and qualified to complete tax documents and gives the population a feeling of trust.

If I were you, I would look for a VITA site near you and suggest the employee volunteer there. Here's the IRS link to locate the nearest VITA site.
VITA Site Locator

I would say that tax preparation is certainly using your financial expertise, and doing so for low-mod individuals meets 2/3 of the definition for a qualified CD service. The last third of the definition, officially representing the bank, applies here, but would make me nervous.

I might be too cautious, but could there be other compliance implications? (Encouraging small IRA's to save on taxes could be providing tax advice. Could UDAAP find it's way into this?)

Thanks All!