Case Study: Missouri Department of Revenue

RSI’s Revenue Premier integrated tax system facilitates improved delinquent collections and increased compliance.

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The Missouri Department of Revenue (MO DOR) implemented the Revenue Premier Tax System through a multi-phased benefit-based contract to modernize their technology while improving processes, productivity, transparency, and access for the taxpayer.

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01

MO DOR had been annually processing over five million returns and $12 billion in revenue using 86 disparate systems, many 30 years old, with negligible communication between systems.

02

MO DOR had to incrementally increase revenue from delinquent and non-filing taxpayers. Part of the increase paid for the new tax system, while remaining benefits increased funds for other state programs, like health, education, and transportation.

03

The new system had to improve the taxpayer experience with filing and paying tax obligations while also providing transparency and increased access to MO DOR.

The Challenge

Background

Missouri needed an integrated tax system that could deliver on expectations of the modern digital user with secure online access, plus provide MO DOR with a 360-degree view of the taxpayer. This modernized, integrated revenue system needed to increase efficiency in the administration and enforcement of tax laws.

 

The system employed a business rules engine to empower MO DOR to processes in the system quickly and accurately as legislation and policies evolved. 

 

Needs:

  • MO DOR had purchased a new data warehouse and a case management system a few years prior. It was operational, producing good results, and they did not want to scrap this investment. 
  • New funding for further system modernization was not available, and therefore any modernization had to be funded through incremental revenues generated.
  • Enable more sophisticated analytics and modeling to better identify potential tax issues and optimize audit workflow
  • Make current tax audit selection and case management processes more consistent and efficient resulting in an enhanced ability to identify audit candidates with a high likelihood of non-compliance and increased auditor efficiency


A Unique Circumstance

Given these prerequisites, RSI partnered with MO DOR to leverage the value of their existing systems. Using best practices and expertise developed over the past two-plus decades, RSI optimized the agency’s use of their existing data warehouse and case management system. 

With proven expertise in delivering open-architecture, extensible solutions, RSI assisted MO DOR in maximizing previous investments and creating the impressive 7:1 ROI. With the incremental revenue generated, MO DOR was then able to proceed with Phase Two of the implementation, purchasing new hardware.

The Solution

Following a competitive bid process MO DOR partnered with RSI to replace their legacy tax systems with RSI’s Revenue Premier and fund the work through a benefits-based contract with an expectation for a 3:1 return on investment. As of 2020, the project has realized a 7:1 ROI.

 

Phase One work began with an overhaul of the existing discovery, field audit selection and management, and collections business processes. The initial work applied technology and process enablers to implement data-driven audit selection and management, collection case prioritization and strategy, plus improvements to discovery programs. These changes began to deliver significant increased revenue collection within just a few months of implementation resulting in the 7:1 ROI.

 

A COTS software solution, Revenue Premier provided:

  1. Adaptability, though a business rules engine to empower MO DOR to change rules and processes in the system quickly and accurately as legislative and policy changes required
  2. An Accessible Data Environment aggregating data and facilitating data-driven analysis, decisions, and processes
  3. Consolidation of multiple non-compliant programs, which resulted in MO DOR beijing able to contact taxpayers with a single communication that include filing requirements additional taxes due. 
  4. Automation of previously manual asset searches, case prioritization, and determination of the most effective collection strategies by case

The Results

Better Citizen Engagement

Taxpayers benefitted by gaining access to their historical account information and improved web-based, secure access. A taxpayer can now access all previous filing and payments, refund status information, tax bills, filing requirements and communications to and from MO DOR.

Another benefit for taxpayers includes improved electronic filing for citizens and businesses. Taxpayers can now delegate access to their account by tax type to third parties.

 

Real-Time Access for Local Tax Jurisdictions 

Local tax jurisdictions now also have immediate online access to their reports. This provides better insight into distributions for forecasting purposes as monthly revenue is collected. 

 

Improved Workforce Management and Performance Metrics

The workflow and reporting functions of Revenue Premier provide increased insight into work efficiencies and productivity, giving management the ability to administer resources more effectively and address problems proactively. The financial results that enabled MO DOR to continue with the modernization can be attributed to applying the right technology and industry best practices brought to the project by RSI.

 

Project KPIs:

  • $217.5 million in new revenue – actual new revenue: $443 million (2012-2017)
  • Increase in total audit findings per year – 55% increase, on average 
  • Increased average findings per audit – $17,000 per audit increase, on average 
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“We have always been impressed with RSI’s system architecture, but their people are the real strength of their company. We couldn’t have picked a better partner.”

Joel Allison

Deputy Director, Division Taxation, Missouri Department of Revenue

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