The City of Detroit’s Tax Division Was Out of Date

City of Detroit

Improved Efficiency for the Motor City Tax Division

The Challenge

When a new mayor took office, he had three key goals: increase employee productivity; generate revenue; and reduce fraud. He consulted with the city’s trusted IT partner, to start searching for opportunities. And we very quickly focused in on the City of Detroit’s Tax Division. It was apparent that the tax collection process was slow and inefficient. 100% paper-based, it took 6-8 months for the city to process returns. Many employees spent the majority of their time on data entry, which was unproductive and inefficient. As a result, tax audits weren’t conducted and fraud was occurring all too frequently.

Reinvent the Tax Division’s Day-to-Day Business

Our team took a two-step approach. First, we studied where the city was, where they wanted to go and how they could get there. Next, we presented our recommendations based on what would be best for the city’s overall goals of maximizing revenue and minimizing fraud. One of our solutions was to develop a database system that cross-referenced data from the IRS, employee W2s and the State of Michigan – identifying people and businesses who were not in compliance. The second solution was creating an automated system that eliminated paper-based data entry for tax processing. With this new database, processing tax returns went from 6-8 months down to a couple days.

Results

With the implementation of the new technologies, all three of the mayor’s goals were achieved. With less effort for manual data entry, productivity skyrocketed as employees were repurposed and some were freed up to focus on performing audits. Using the previous two years’ of data, the audits uncovered fraudulent claims, as well as businesses and citizens that were not paying taxes. The first two months after it went live, the new system identified 400,000 cases of non-filers resulting in an additional $250 million in unresolved billings.