Challenge
A state Division of Revenue (DOR) is the primary revenue collector for the state, collecting taxes and other revenues required by law from the state’s citizens and businesses. This division was struggling to maximize audit and collections revenue due to an overload of manual work, security shortcomings, lack of project management experience, and outdated technology. It needed to enhance its ability to detect fraudulent filings, improve the collection of money owed, optimize the effectiveness of audits, and significantly improve the taxpayer's experience.
Solution
The division engaged CAI to help it modernize its environment by replacing the state’s existing tax processing systems and internal desktop procedures and processes, enhancing the systems' security, and complying with federal regulations. Employing a government-focused modernization methodology, CAI conducted extensive research to gather the business requirements, author RFI and RFP documents, create a vendor evaluation and selection process, and design and plan the hardware and technology build. The division shared components of the customized process with other state revenue agencies.
The solution consolidates tax processing by moving all systems and processes, including document processing, imaging, and storage, into a single cloud-based platform. It replaces the DOR’s current document management tools with a comprehensive content management capability and consolidates all taxes and fees into a uniform administration system.
Benefits
The state DOR can now maximize audit, collection, fraud detection, reporting, and estimation functionality from within the system via integration with the data warehouse or by leveraging sources external to DOR. With fewer systems to maintain, the DOR can migrate business processes to more modern, flexible, and supportable technologies and automate work queues and consolidation of tax types and fees into one system. The result reduces manual processing, consolidates tax types and fees, increases efficiency, and saves time.
By enhancing the collection of existing and new taxes, penalties, and interest, the DOR also can increase revenue opportunities and provide set-off services and revenue collection for other state agencies under reciprocal agreement. The availability of additional information in the new system means the DOR can use complete and complex fraud models to reduce the number of fraudulent refunds issued and streamline the pursuit and recovery of refunds obtained by fraud.
With centralized security, the DOR can maximize compliance with required and recommended security standards, internal controls, and policies. The DOR is continuing to improve its security posture by implementing industry-standard security controls (e.g., NIST SP 800-53, Cyber Security Evaluation Framework) and Internal Revenue Services (IRS) Office of Safeguards guidelines (Publication 1075).
The new system replaces the current e-file with individual and business online tax filing capability to leverage industry best practices and integrate with the state's one-stop business license system. The integrated solution provides comprehensive reporting and querying capability and meets the state's requirements for failover, disaster recovery, and availability.
The DOR now can give taxpayers access to returns and reports filed, account information, payment information, correspondence, and related documents. When taxpayers manage their accounts through secure online self-service applications, they have better insight into account transactions. After an initial learning phase, the DOR anticipates the increase in online services will lead to a reduction in call center activities and correspondence volumes.
While centralization helps optimize the state’s workforce, the new solution also serves taxpayers better and streamlines tax processing and collection to support the division’s mission and make it a more strategic player for the state.
