With the proverbial April 15th deadline looming in the not-so-distant future, many U.S. citizens have income taxes on their minds. Most are still in the throes of preparing their returns, with an increasing number of individuals taking advantage of technology to aid in this annual ritual every year. Over the past decade, the use of specialized software packages that weave through complicated calculations and provide automatic filing services have somewhat eased processing of forms for tax preparers. These improvements, combined with advancing efforts by businesses to better guide their fiscal and governance programs with analytics, have helped improve the quality of filings and reduce some of the governments’ tax system overhead and costs. But even with all this activity, it is by far not enough.
The economy has not only posed a tremendous hardship on many individuals and businesses, it has levied a pounding on most state governments. Decreased property values and commerce activity, amongst other hurdles, are adding to revenue and budget shortfalls. According to the latest state revenue report out of the Rockefeller Institute, this downward trend is likely to stabilize but not rebound dramatically for some time. That puts much more impetus on governments to find ways to crack down harder on fraud, eliminate waste, ensure receipt of collectables due, and levy the proper taxes in the first place. They are continuing to turn to analytics is help further these causes.
Over the past few years many state agencies such as California , Rhode Island and New York amongst others have updated their foundational systems and are now looking to expand capabilities with more sophisticated analytics. The ability to track and correlate data points from multiple sources, such as mortgage and location-based data, and employ data mining and various analysis techniques, is helping governments surface inconsistencies, raise red flags, and aid in navigating more dynamic and complex taxable business activities. Although catching and deterring criminal behaviors are obvious considerations, the primary goal here, however, is to minimize mistakes and make the overall system more efficient. While the economy still needs to heal, such actions will hopefully help stem the more avoidable losses and thus the associated offsets of such financial burden onto all of us taxpayers.
Sandy Rogers
Spotfire Blogging Team
Image Credit: Microsoft Office Clip Art
