1. Introduction: What is Form 13977?

IRS Form 13977, officially titled the VITA Grant Budget Plan, is an administrative grant application form published by the Internal Revenue Service (IRS). The IRS operates as a federal bureau under the United States Department of the Treasury, administering the internal revenue code and overseeing federal grants that support community tax programs.

Unlike personal tax returns filed by wage earners or business tax schedules, Form 13977 is an institutional budgeting document. It is managed by the Stakeholder Partnerships, Education and Communication (SPEC) division within the IRS Wage and Investment Division.

Form 13977 is used by non-profit organizations, local government agencies, universities, and community coalitions applying for federal matching grants under the Volunteer Income Tax Assistance (VITA) Grant Program. It allows applicants to project their annual operating costs, separate expenses between federal and non-federal funds, and prove they meet mandatory matching fund requirements.

2. Purpose of the Form

Each year, Congress appropriates federal funds to help community coalitions provide free tax preparation to low-to-moderate-income families, elderly taxpayers, and non-English speaking individuals. Because these federal awards are subsidized by taxpayer dollars, the IRS enforces strict financial accountability standards.

Under federal statute, the VITA grant is a matching grant. For every dollar of federal funding an organization requests, it must contribute at least one dollar of non-federal matching funds, which can include local cash donations or third-party in-kind contributions like volunteer hours and donated office space. Form 13977 exists to prove that an applicant has assembled a balanced, compliant budget that satisfies this mandatory 100% match.

Additionally, federal regulations establish strict rules on what federal grant money can buy. Most notably, federal VITA funds can never be used to pay tax return preparers or intake screeners—preparers must remain unpaid volunteers. Form 13977 ensures that federal funds are budgeted solely for allowable administrative roles—such as site coordinators, IT specialists, and quality reviewers—while properly tracking allowable operating expenses.

3. Who Needs to File This Form

Form 13977 is completed by organizations seeking or managing federal VITA grant funding under Assistance Listing Number 21.009. You need to file this form if you represent any of the following entities:

Non-Profit 501(c)(3) Organizations: Community action agencies, United Way chapters, and charitable coalitions applying for a competitive VITA grant.
Local & Municipal Government Agencies: City, county, or regional government departments sponsoring free community tax preparation programs.
Colleges and Universities: Academic institutions operating campus-based or community-outreach VITA clinics.
Financial Institution Coalitions: Credit unions, community development financial institutions (CDFIs), and banks managing volunteer tax sites.
Current VITA Grantees Submitting Revisions: Funded organizations that need to submit an amended budget plan due to funding adjustments or mid-season operational shifts.

The form is prepared and certified by the applicant organization’s executive director, finance officer, or grant coordinator. Everyday taxpayers and volunteer preparers never complete Form 13977.

4. Who Is Exempt / Not Required to File

Because Form 13977 is strictly a grant application and budget modification tool for federal VITA award applicants, most taxpayers and groups do not need to file it:

Individual Taxpayers: Low-income community members receiving free tax assistance never complete or see this form.
Individual Volunteers: Volunteer preparers, greeters, and quality reviewers certify their personal compliance on Form 13615, not Form 13977.
Non-Grant Sponsoring Partners: Community organizations that host VITA sites without receiving federal cash grants operate under Form 13533 and do not submit Form 13977.
Tax Counseling for the Elderly (TCE) Grantees: Programs funded exclusively under the TCE grant program use separate application packages and budget documents.
Low Income Taxpayer Clinics (LITCs): Legal clinics representing taxpayers in audits use Form 13424-J for their budgets, not Form 13977.

5. When to File

Form 13977 operates on an annual competitive grant schedule governed by IRS Publication 4671:

Annual Application Deadline: Form 13977 is submitted as a core component of the VITA grant application package on Grants.gov. The application window typically opens on May 1 and closes on May 31.
Award Negotiation Revisions: If your organization is selected for a grant award around October 1, but the awarded dollar amount differs from your initial request, you must submit a revised Form 13977 reflecting the adjusted budget.
Mid-Year Budget Modifications: Active grantees that experience operational shifts requiring fund reallocations across categories must submit an updated Form 13977 to their assigned IRS Tax Analyst before spending funds.

Federal grant portals strictly enforce deadlines. Submitting late can result in the immediate disqualification of your organization’s entire grant proposal.

6. Where and How to File

Form 13977 cannot be submitted through consumer tax preparation software like TurboTax. It is submitted through official federal grant management platforms.

Initial applicants must complete Form 13977 as part of the electronic application package downloaded from Grants.gov, attaching it directly to the Standard Form 424 (Application for Federal Assistance). Grantees submitting revised budget plans mid-season can submit their updated Form 13977 through the mobile-friendly web form on IRS.gov or email it directly to their assigned IRS VITA Grant Tax Analyst.

Before submitting, your organization must maintain an active registration in the System for Award Management (SAM.gov) and possess a valid Unique Entity Identifier (UEI). If physical verification files or audit samplings are requested, deliver materials to the specific IRS address as per instructions outlined in Publication 4671.

7. Step-by-Step Instructions to Fill the Form

Form 13977 is structured as a two-column budget plan. For each expense line, you must enter proposed costs under Federal Funds and Matching Funds. Review the table below for a line-by-line guide.

Line Item	Budget Category	Instructions for Grant Applicants
Line 1	Personnel	Budget wages only for eligible roles: Program Coordinator, Site Coordinator, IT support, or Quality Reviewer. Never budget federal funds for tax preparers or screeners.
Line 2	Volunteer Services	Report the estimated value of volunteer time. Federal funds are not allowed (N/A); this line applies strictly to Matching Funds. Check if using the simplified method.
Line 3	Fringe Benefits	Include employer-paid taxes, medical insurance, and retirement contributions strictly for the paid positions budgeted on Line 1.
Line 4	Travel	Budget local travel, mileage, and transit for staff and volunteers attending site training, coordination meetings, or operating mobile clinics.
Line 5	Equipment	Itemize high-value capital equipment purchases exceeding capitalization thresholds ($5,000) that have a useful life of more than one year.
Line 6	Supplies	Budget consumable office supplies, paper, toner, intake sheets, file folders, and technology items under $5,000.
Line 7	Contractual	Detail payments for third-party professional services, IT support contracts, independent financial audits, and certified language interpreters.
Line 8	Other Expenses	Include facility rent, utilities, telephone lines, internet hotspots, and commercial insurance allocated to the VITA program.
Line 9	FEAB Services	Budget financial education, credit counseling, and asset-building services integrated into your free tax clinics.
Line 10	Volunteer Recognition	Budget modest non-cash appreciation items—such as certificates, pins, plaques, or end-of-season volunteer meals—within program caps.
Line 11	Indirect Cost Rate	Apply your organization’s approved federal indirect cost rate (NICRA) or elect the standard 10% de minimis rate on modified direct costs.
Lines 13–15	Disclosures	Answer mandatory questions regarding corporate felony convictions, related-party transactions, and planned sub-awards of $1,000 or more.

Understanding the Personnel Restriction Rule

The most important rule on Form 13977 concerns Line 1 (Personnel). VITA is a volunteer program by federal statute. Consequently, federal grant funds cannot be paid to individuals for preparing tax returns or screening taxpayers.

Federal funds on Line 1 may only support operational management roles, including:

Program Coordinators and Financial Directors
Site Coordinators and Clinic Managers
Technical and Information Technology Support Staff
Tax Law Instructors and Trainers
Designated Quality Reviewers
Clerical Support and Appointment Schedulers

Tax return preparers and intake greeters must remain unpaid volunteers. However, non-federal matching funds may be used to pay staff who deliver program services when properly documented.

8. Required Documents/Information Needed Before Filling

Before completing Form 13977, assemble the following operational and financial records:

Standard Form 424 (SF-424): The core federal grant application; budget figures on Form 13977 must match the SF-424 exactly.
Proof of Non-Profit Eligibility: An official IRS 501(c)(3) determination letter or municipal charter documents.
SAM.gov Registration & UEI: Verification of an active System for Award Management registration and Unique Entity Identifier.
Form 13978 (Projected Operations): Your operational plan detailing planned site locations, operating hours, and projected return volumes.
Matching Fund Commitments: Written letters of commitment, municipal appropriations, foundation award letters, or volunteer hour projections.
Indirect Cost Rate Agreement: A copy of your negotiated federal rate agreement (NICRA) if you claim an indirect rate above the 10% de minimis rate.

9. Common Mistakes to Avoid

Budgeting errors on Form 13977 can delay application scoring or lead to grant disqualification. Avoid these frequent mistakes:

Budgeting Paid Tax Preparers: Attempting to use federal grant dollars to pay wages for tax preparers or intake screeners is a direct violation of program rules.
Failing the 1:1 Match: Total Matching Funds on Line 12 must equal or exceed total Federal Funds requested. If you request $50,000 in federal money, you must document at least $50,000 in matching funds.
Discrepancies with Standard Form 424: The dollar figures entered on Form 13977 must match the budget summary on the SF-424 down to the penny.
Overvaluing Volunteer Time: Estimating unreasonable hourly rates for volunteers will lead reviewers to reduce your matching fund totals. Use the approved IRS simplified rate or local prevailing wages.
Exceeding Volunteer Recognition Caps: Budgeting lavish gifts or cash awards for volunteers violates federal cost principles; volunteer appreciation must remain modest and non-monetary.
Missing the May 31 Deadline: Grants.gov strictly rejects submissions received after 11:59 p.m. Eastern Time on May 31.

10. Penalties for Non-Filing or Errors

Because Form 13977 is a competitive grant application rather than an individual tax return, there are no civil tax penalties or personal fines for failing to file it. However, the operational and financial consequences for the organization are substantial:

Application Disqualification: Submitting an incomplete, unbalanced, or late Form 13977 results in the immediate rejection of your grant proposal.
Payment Management System Holds: Grantees that fail to account for matching funds or submit required budget revisions face payment freezes in PMS, preventing expense reimbursements.
Grant Recoupment (Clawback): If year-end accounting shows that budgeted non-federal matching funds failed to materialize, the organization must refund a corresponding portion of its federal grant award to the U.S. Treasury.
Disallowance of Unallowable Costs: Spending grant funds on unauthorized personnel (such as paid preparers) results in cost disallowances, forcing the organization to cover expenses from its own funds.
False Claims Act Sanctions: Intentionally falsifying matching fund pledges, fabricating timesheets, or forging donor letters violates 18 U.S.C. Section 1001, exposing organizations and individuals to federal criminal prosecution and civil fraud penalties.

11. Related Forms or Schedules

Form 13977 operates within a comprehensive suite of IRS volunteer tax program grant forms:

Standard Form 424: Application for Federal Assistance
Form 13978: Projected Operations VITA Grant Program Application Plan
Form 13979: VITA Grant Final Expense Report
Form 13979-A: VITA Grant Budget and Narrative
Form 13980: VITA Grant Performance Measures Report
Form 13981: VITA Grant Agreement
Form 14355: Contact Information for VITA and TCE Grant Programs
Publication 4671: VITA Grant Program Overview and Application Instructions
Publication 5683: VITA/TCE Handbook for Partners and Site Coordinators

12. Frequently Asked Questions

Can federal VITA grant funds be used to pay tax return preparers?

No. Under federal VITA grant rules, federal funds cannot be paid to individuals who screen taxpayers or prepare tax returns. Tax preparers and screeners must be unpaid volunteers. Federal funds on Line 1 may only be used for operational coordination, IT support, and quality review roles.

What qualifies as matching funds on Form 13977?

Matching funds can come from non-federal cash contributions (such as foundation grants, state funding, or corporate donations) and third-party in-kind contributions (such as the documented value of volunteer hours, donated office supplies, or donated clinic space).

How is the value of volunteer services calculated on Line 2?

Organizations calculate volunteer matching values by multiplying total projected volunteer hours by an approved hourly wage rate. Applicants can use the standardized volunteer rate published annually in IRS Publication 4671 or substantiate local prevailing wage rates for administrative personnel.

What is the de minimis indirect cost rate on Line 11?

Under Title 2 of the Code of Federal Regulations, organizations that do not have a formally negotiated federal indirect cost rate agreement (NICRA) may elect a standard 10% de minimis rate on modified total direct costs to cover general administrative overhead.

Can federal funds from another grant be counted as matching funds?

No. Under federal grant rules, you cannot use funds from another federal grant (such as an AmeriCorps or HUD grant) to satisfy your VITA matching requirement, unless a specific federal statute explicitly authorizes those funds to be used as matching funds.

What happens if our organization is awarded less money than we requested?

If the IRS awards a partial grant, you will be invited to submit a revised Form 13977 adjusting your budget lines and matching commitments to align with the approved award before funds are disbursed.

13. Conclusion: Key Takeaways Summarized

IRS Form 13977 is the financial foundation of any competitive VITA grant application. Managing your budget accurately ensures your organization remains fully compliant. Remember these core takeaways:

Comprehensive Grant Budget: Use Form 13977 to itemize all projected VITA program expenses across standardized federal cost lines.
Strict 100% Match Requirement: Ensure that your non-federal matching funds equal or exceed the total amount of federal funding requested.
No Paid Preparers: Never budget federal grant funds to pay wages for tax preparers or intake screeners; these positions must remain volunteer.
Submit via Grants.gov: File the form as part of your complete grant application package between May 1 and May 31.
Deliver Revisions Promptly: Submit revised budget plans through the mobile-friendly web form on IRS.gov or directly to your assigned IRS Tax Analyst as per instructions in Publication 4671.

IRS Form 13977 Guide: VITA Grant Budget Plan Instructions