New York teams up with IBM to collect taxes
The left-leaning Center on Budget and Policy Priorities (CBPP) recently predicted that the Empire state will confront a mid-year budget shortfall of $3.2 billion for 2010, which amounts to roughly 5 percent of its overall budget.
The state of New York estimates that it is owed about $3 billion in taxes that are seriously in arrears over a 20-year time span. Roughly 600,000 taxpayers are responsible for the money.
Commiskey predicts that over the next 3 years the Optimizer will bring into the state an additional $100 million in revenue that it otherwise would have never seen.
The Optimizer also instructs Commiskey on how to allocate the manpower in his office to collect past due taxes.
“Its recommendations are on the current level of staff available to the office,” he said, adding, “We get to more places faster.”
The CBPP found that budget shortfalls are widespread, with 48 states having either just addressed the issue or still facing it.
The total tax shortfall for states sits at $196 billion, a 78 percent increase over 2009, according to the CBPP.
Data from the U.S. Census Bureau shows that state government tax collections totaled $715 billion in fiscal year 2009, a $66.9 billion decrease from 2008.
A number of states have contacted IBM about the program.
“We have had significant interest from multiple states, and, frankly, from central governments around the world,” IBM executive Shaun Barry told The Hill. “This [budget shortfalls] seem to be a common business problem across the world.”
One potential client is the Internal Revenue Service.
“The IRS has certainly expressed some interest in this type of solution,” Barry said.
The IRS would not comment on the issue.
Data used by the IBM system is stored within the state agency. Privacy laws prohibit taxpayer information from being shared with the company.
“There are strict privacy laws and [New York] has not disclosed that information to IBM,” Barry said.
Commiskey said the system has cost the state less than $10 million to implement.
“If it returns $100 million of additional revenue in the next 3 years, the return on investment is going to be significant,” he said.
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