to improve compliance an ongoing strategy to generate ... public... · wage earners are not...
TRANSCRIPT
Manufacturing
_experience the commitment
Government and Healthcare Financial Services Telecommunications Manufacturing
TM
Leveraging Public Private Partnerships to Improve ComplianceAn ongoing strategy to generate millions
while facing shrinking budgets
FTA Technology Conference, August 2011 Confidential – CGI Proprietary – August 2011
Agenda
Purpose and Overview Strategies to Improve Compliance
LevelsPublic Private Partnership
Compliance Improvement Opportunities Funding and Implementation Strategy
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An Alternative Approach to Enhancing Compliance Programs
At CGI we firmly believe Compliance levels can be improved Revenue agencies can generate millions of dollars of
additional revenues cost effectively There are a series of universal roadblocks that must
be removed to seize these opportunities Our purpose today Describe how expanded public private partnerships
can compliment existing compliance programs and improve compliance levels
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Some Important Fundamental Truths About Non-Compliance
Non-Compliance is a Function of Opportunity 99% of Wages and Salaries are accurately reported Only 46% of income subject to little or no information reporting is
accurately reported. • The IRS found that PIT Business Underreporting represents 37% of
the $345 Billion Tax Gap Wage earners are not inherently more honest- they just have
less of an opportunity to be non-compliant Taxes are Complicated
A significant number of taxpayers make unintended mistakes but are willing to self correct if contacted
Once notified of errors self such self correcting taxpayer tend to continue to be compliant in future years
By More Fully Leveraging Available Taxpayer Data Millions of Dollars in Additional Revenue can be Generated
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The Five Components that are Necessary to Improve Compliance Programs
Enabling Technology Taxpayer Data and
Data Management Expertise
Business Process Improvements
Operational and IT Resources
Unique Funding Strategies
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Agenda
Purpose and OverviewStrategies to Improve Compliance
LevelsPublic Private Partnership
Compliance Improvement Opportunities Funding and Implementation Strategy
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Why we may be at a breakthrough point in improving compliance
The strategies to improve compliance are not new What is new is the opportunity to cost effectively:
Retain, store and leverage new sources of taxpayer data
Apply analytical tools to better mine data repositories to improve ability to identify non compliance
Utilize automated workflow and case management applications
The net effect: Historical compliance problem areas can finally
be cost effectively addressed Improvement in compliance rates and significant
increases in revenues
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Strategies to Improve Compliance
Expand and enhance availability of taxpayer data through investments in compliance data warehouses/repositories
Use of analytics to improve audit and collection modeling
Increase capacity by establishing new automated audit programs
Enhance ability to identify taxpayer errors as returns are filed
Improve ability to detect non-filers by: Effectively matching reported income with
data provided from multiple third parties Enhanced ability to cleanse and match
taxpayer data Leveraging statistical models to prioritize
potential non-filer leads
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What does your Compliance Program Improvement List Look Like?
What opportunities do you see to improve your compliance programs?
Possible Options Expand existing programs Expand compliance staffing Pursue new targeted
compliance initiatives Expand access and use of
taxpayer data Leverage new analytical tools
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Roadblocks to Improving Compliance
No capacity to expand existing programs
Unable to obtain funding even with a strong business case
Concerns that probable improvements in compliance are not worth the costs, risks and disruptions to existing compliance programs
Lack of stakeholder support Lack of expertise
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Agenda
Purpose and OverviewStrategies to Improve Compliance
LevelsPublic Private Partnership
Compliance Improvement Opportunities Funding and Implementation Strategy
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Compliance Improvement Solution Components
Compliance subject matter experts can provide focused business process expertise to assist in improving operations. Scope of services to consider include: Audit, Collections, Non-Filer Compliance and Decision Analytics.
Business Process Services
Multiple proven compliance enabling technologies can be leveraged utilizing multiple funding strategies to minimize initial up-front investments
Business Applications
Managed services options are tailored to each client’s requirements, and can range from hosted application maintenance to full business process outsourcing.
IT Services
Consider multiple public private partnership options
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Potential Public-Private Partnership Solution Options
Scoring andSegmentation
Strategy Management
Call Center Management
Correspondence Management
PerformanceBenchmarking
Third PartyManagement
Application Development/Maintenance (CGI)
Data Center Hosting (CGI or Client)IT Services
Desk Audit Non-Filer Refund Fraud
Predictive Modeling
Case Management Lead Determination Third Party Data Mgmt
Self-service Document Prep
Call CenterTechnologies
BusinessIntelligence
Compliance DataWarehouse
Decision Analytics
Case Management
Compliance Programs
Business Process Services
Business Applications
Correspondence
Predictive Dialers
Third-Party Data Mgmt
Collections
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Tailor Strategies to your Requirements and Needs
Combine the business applications, compliance expertise, and operations management capabilities to provide a comprehensive solution that minimizes up-front costs, guarantees performance, and shares in the ongoing risk of the operations
Consider your support needs in the following areas:
• Implementation assistance
• On going application maintenance of the software on a 24x7 basis
• The option of hosting compliance software at either on your infrastructure and provide the on-site and remote monitoring, or alternatively, host the application on the vendor’s infrastructure.
• Support from compliance SME’s and operational resources to compliment your own compliance staff
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Compliance Business Process Services Develop Predictive Models and to score and segment compliance
cases Collection Risk and Yield Scores Non-Filer modeling to establish assessment confidence scores Improve audit selection capabilities Added capacity for Desk Audit Identify potentially erroneous or fraudulent refunds
Provide Strategy Management and Performance Benchmarking Best Practices incorporated from other Compliance initiatives Measure effectiveness of programs Predict workload versus capacity
State retains strategic decision making authority over program while leveraging outside resources to carry out
program operations
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Compliance Business Process Services
Provide Staffing to Complement Existing Resources Resources could focus on less complex compliance issues and
compliance support Allows revenue resources to be redirected to other more complex
activities
Correspondence Management
Call Center Management
Case Management
- Respond to Inquiries- Proactive
Communication and Education
- Create and Print Correspondence- Stuff and Mail- Process Returned Mail- Correspondence Response
- Close Based on Business Rules- Adjust Lead based on Taxpayer
response- Finalize Lead for Assessment
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Expanded IT Services
Application Development and Maintenance Application Software (New or Existing) Provide long term support for both legacy and new applications
Administrative interface development to integrate New Compliance applications to existing IT applications Existing Integrated Tax System Existing Data Warehouse or Compliance Data Warehouse Other Case Management Applications
Data Center Hosting either at vendor data centers or at client site Managed Services Server Hardware Database Management Disaster Recovery
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Agenda
Purpose and OverviewStrategies to Narrow the Tax GapPublic Private Partnership
Compliance Improvement Opportunities Funding and Implementation
Strategy
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Funding Options for Public Private Partnerships
Craft a Funding Strategy that: Addresses both short and
long-term funding demands Overcomes Budgetary
Constraints Provides Incentive to
Continually Enhance Compliance
Address all direct and indirect funding needs: Technology Operational Resources Subject Matter Expertise
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Compliance Improvement Funding Model
Compliance initiatives that are paid exclusively from increases in revenues
Why Consider this Option? No upfront costs Initiatives paid for up to a pre-determined cap Initiatives added based on rigorous governance framework to
ensure each initiative has a compelling business case Allows the Government to pay for improvements out of a
percentage of revenue increase Can be used to support both initial investment and ongoing
operations and maintenance Shifts risk to the vendor (make them put their money where their
mouth is)
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Suggested First Step to Assess the Value of the Public Private Partnership Option: An Operational Review
A review of current compliance functions
Ask Independent compliance experts to review: Current tools in use Current operational statistics
Assimilates the information and compare to best practices
Results: A comparison and
benchmarking of these statistics to national best practices
Set of opportunities Estimate for level and timing of
revenue increasesConfidential
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Public Private Compliance Partnership Value Proposition
Eliminates upfront capital investment, provides subject matter expertise, and
addresses resource constraints
Removes Roadblocks
Better use of existing and new data to identify non compliant taxpayers using analytics to
support prioritization
Comprehensive solution offering on-line tools, case management and expanded capacity to
pursue more potential compliance cases
Delivers Tools and Expanded Capacity
Improves Compliance
Offers Solutions that…
Provides proven strategies to increase compliance and generate millions in increased
revenues
Generates Additional Revenue
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Contact Information
About the Presenter
36 Years of experience enhancing
the operations of State and Federal
tax agencies
Previously managed all collection
operations for the California
Franchise Tax Board
Developed strategic plans and
operational reviews for numerous
States
Experience with enhancing
collections, audit and tax accounting
systems and business processes
John VrannaExecutive ConsultantTax, Revenue and Collections
(916) [email protected]/tax
ISO 9001 Certified
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