Using doorhangers to increase use of vita services

Background

The IRS’s Volunteer Income Tax Assistance (VITA) program sponsors sites around the nation where low- to moderate-income (LMI) filers can have their taxes prepared for free. However, only about 3% of qualifying returns were prepared at VITA sites. Over 60% of filers use a paid preparer, which means that many people are paying an average of $273 to have their taxes done by a paid preparer. Switching people from a paid tax preparation service to VITA would represent a significant cost savings for those individuals and would potentially help connect them to other kinds of financial services offered through VITA sites.

To explore how we might increase VITA use, we partnered with United Way of Tucson and Southern Arizona (UWTSA). Each year, UWTSA serves approximately 2,500 taxpayers in the Tucson area through their VITA sites. Together, we aimed to develop a community-level intervention to encourage more community residents to switch from paid tax preparers to VITA services.

Key Insights

People may stick with using paid tax preparers even when there are free alternatives simply because we tend to stick with the status quo and keep doing things the way we have done them before. Breaking people away from the status quo can be difficult and often requires some kind of shock or impetus for change. There are four insights from behavioral science that informed our messaging approach for encouraging people in the community to switch from paid preparers to VITA.

• People are motivated by a fresh start. People often feel more motivated to make changes or engage in a new behavior when they are presented at natural milestones or transition points, such as the New Year.

• People evaluate the options that are presented to them relative to other existing options.

• People look for cues from others and are motivated to behave in the same way that others around them are behaving.

• Presenting people with an extreme version of an opinion is more effective at capturing people’s attention than more mild versions of the same opinion.

Experiment

We hypothesized that presenting taxpayers with messaging drawing from these behavioral insights would motivate more to switch from paid tax preparation to VITA services. We tested different messages using doorhangers that we, along with staff and volunteers from UWTSA, placed on household doors. We targeted three zip codes in Tucson that usually have lower VITA use but were within three miles of a VITA site. Households were randomly assigned to one of five conditions: four of the conditions received one of the doorhangers and the fifth did not (a control).

Results

We did not see any significant differences in VITA uptake between conditions. Only about 0.7% of households in the control condition, but the rate doubled to 1.43% and 1.45% of households on the extreme opinion and the decision aid condition. The fresh start condition performed slightly worse, with 1.14% of households using VITA, and the social proof condition performed about as well as the control, with 0.86% of households using VITA.

Taken together, the results suggest that there are likely stronger barriers that keep people from switching from paid preparers to VITA sites. Perhaps people view paying for tax preparation as a way of ensuring a quicker refund. Alternatively, they may also feel that paying for tax preparation is paying for a higher quality service.