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Iowa’s E-File Success Story. Paul E. Benson Taxpayer Services Manager MSATA 2006. Business eFile & Pay Overview. Why did we consider eFile & Pay? Past success with E-Filing of individual income tax returns Beneficial to taxpayers and department We saw the potential in expanding

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iowa s e file success story

Iowa’s E-File Success Story

Paul E. Benson

Taxpayer Services Manager

MSATA 2006

business efile pay overview
Business eFile & Pay Overview
  • Why did we consider eFile & Pay?
    • Past success with E-Filing of individual income tax returns
    • Beneficial to taxpayers and department
    • We saw the potential in expanding
    • Wanted voluntary compliance
business efile pay overview1
Business eFile & Pay Overview
  • Questions asked included:
    • How to simplify tax filings and collections
    • How to create efficiencies within Revenue
    • How to change the way we transact business
    • These questions resulted in a 3 year study which generated even more questions…
business efile pay overview2
Business eFile & Pay Overview
  • Questions from the E-Commerce study:
    • How do we market our service?
    • How do we educate our customers?
    • How will we answer their questions?
    • How do we convince them to use eFile & Pay?
    • Will the users, and the department, accept the change?
  • The decision was made to move forward.
business efile pay overview3
Business eFile & Pay Overview
  • eFile & Pay required department changes.
    • Resources were investigated & obtained
    • Shifts in the budget were negotiated
    • Marketing & educational strategies were developed
    • A new unit was formed & trained
    • All of this occurred while the former filing process remained in place
business efile pay overview4
Business eFile & Pay Overview
  • This overview will describe the strategies that were developed and implemented, including:
    • Creation of the new eFile Service Unit
    • Benefits realized by businesses - and us
    • Marketing & education initiatives
    • Use of incentives not mandates
why not mandate
Why Not Mandate?
  • Factors considered:
    • What would be acceptable to customers?
      • Wanted cooperation, not a mandate
    • What would policy makers want?
      • No real pressure from legislature
    • Our success with income tax E-Filing
      • Estimate 67% participation rate this year
    • Experiences of other states
why not mandate1
Why Not Mandate?
  • Decision was made against mandating
    • No penalties at this time
    • No returns mailed to permit holders
    • Payment vouchers are mailed
    • Withholding quarterly returns: Web site only
    • Sales & Use quarterly returns: Web site only
implementation
Implementation
  • Timeline developed:
    • Withholding tax in January 2005
    • Sales & Retailers Use tax in July 2005
    • Consumers Use tax in October 2005
    • Withholding VSPs in January 2006
    • LPG in March 2006
    • Motor Fuel in July 2006
efile service unit
eFile Service Unit
  • A new unit was needed.
    • Decided to place it in Taxpayer Services
      • Education & assistance would be the emphasis
      • Unit could evolve into other areas in the future
    • Program Manager hired in August 2004
    • Rest of the unit hired in November 2004
    • Training occurred until January 2005
efile service unit1
eFile Service Unit
  • Duties of this unit would be:
    • Answer phone calls
    • Respond to emails
    • Help walk-in customers
    • Help with testing and system development
    • Input on letters, emails, Web site, etc.
efile service unit2
eFile Service Unit
  • All “new” employees eliminated the risk of reducing current level of customer service.
    • Originally had 1 manager, 4 full time plus 6 temporary employees.
    • Also added 4 full time backups and 13 emergency backups when needed
    • Wanted adequate phone coverage 1st year
efile service unit3
eFile Service Unit
  • The temporary employees were originally hired to work the first year while call volume would be high.
    • Two of them worked for 18 months
  • This would leave a permanent staff capable of handling the level of service needed in the future.
efile service unit4
eFile Service Unit
  • Currently eSU consists of:
    • 1 Program Manager
    • 1 Taxpayer Service Specialist
    • 6 Administrative Assistants
    • 4 emergency backups
  • We hope to eliminate the backups soon and rely on a permanent staff of 8 or 9.
marketing education
Marketing & Education
  • We needed to market & promote.
    • It would need to be a department wide effort
    • Who do we target?
    • How do we get the message to them?
    • How do we educate the businesses?
    • What can we do to make this transition as simple as possible?
marketing education1
Marketing & Education
  • eFile Governance Team was formed.
    • The team would oversee the program
    • Consisted of the Director and managers from most department divisions
    • Marketing and education plans were developed
marketing education2
Marketing & Education
  • Mailings:
    • First attempt to communicate with businesses
    • Letters sent out 2 months before each tax type went live in eFile & Pay
      • Withholding letters sent in November 2004
      • Sales/Use letters sent in May 2005
marketing education3
Marketing & Education
  • Press Conferences:
    • Given by the Director of Revenue to alert media the month before each tax went live
    • TV stations & newspapers picked up the story
      • Withholding tax in December 2004
      • Sales/Use tax in June 2005
marketing education4
Marketing & Education
  • BEN Letters:
    • Business E-file Number
    • Number used to access eFile & Pay
    • Each business has 1 BEN for all tax types
    • Letter also provided information on accessing the system, use of the BEN and how to complete their returns electronically
    • Actual Web site screen shots were included
marketing education5
Marketing & Education
  • Telephone Scripts:
    • Developed for businesses that elected to transmit by telephone
    • Scripts detailed each step of the process
    • Feedback from the scripts has been positive
    • Provide 18 different phone scripts
      • 8 for withholding tax
      • 10 for sales & use taxes
marketing education6
Marketing & Education
  • Presentations:
    • Offered statewide over a two week period
    • Postcards with dates & times mailed to each withholding agent and sales tax permit holder
    • Done when majority of businesses would be using the system for the first time
    • 5 Field Taxpayer Service Specialists presented
    • 70 presentations with 4,400 in attendance
marketing education7
Marketing & Education
  • eLists:
    • Department has 7 different eLists
    • Use as a communication tool
    • eLists were used 15 times to send out information regarding eFile & Pay
    • Sent to taxpayers, practitioners & government entities
marketing education8
Marketing & Education
  • Reminder Letters:
    • Mailed to selective businesses
    • Sent as the quarterly due date drew near
    • Targeted to businesses that had not yet accessed the eFile & Pay system
marketing education9
Marketing & Education
  • Web site:
    • Enhanced to offer as much info as possible
    • Copies of all correspondence (BEN, reminder)
    • All eFile & Pay presentations (pdf format)
    • PowerPoints showing the screen shots
    • FAQ’s
    • Other miscellaneous items
      • Pay options, browser info, due dates, holidays…
marketing education10
Marketing & Education
  • Summary:
    • 70 presentations to 4,400 participants
    • 2 postcard mailings
    • 2 press conferences & articles to the media
    • 15 eLists sent
    • 21 letters generated
    • 12 online PowerPoint presentations
    • Expanded Web site with 30 files of eFile & Pay info
results
Results
  • Methods of using eFile & Pay:
    • 90% of businesses use Web application
    • Remaining 10% use the telephone
    • We anticipate continued Web growth
    • Telephone option will always be necessary
      • Application down
      • Business PC down
      • Business has no Web access
results1
Results
  • Electronic Payments:
    • Over 80% of total money received is sent electronically
    • Only about 50% of the transactions are electronic
    • These percents will increase as businesses become more comfortable using the eFile & Pay system
results2
Results
  • Three major concerns were answered:
    • Receipts remain steady & timely
      • Hasn’t been an issue
    • Delinquency rates
      • They are actually lower
    • Quality of information is consistent
      • Especially important regarding the local option sales taxes that are reported
results3
Results
  • Benefits to the department:
    • Thousands of returns are no longer processed manually
    • Electronic review replaced manual review
    • Money is transferred more quickly into the state’s general fund
    • Record storage is reduced and retrieval is quicker & simpler
goal of efile pay
Goal of eFile & Pay

70% Participation rate after one year

impact on business tax filings
Impact on Business Tax Filings
  • Far better than expected.
    • Filing for businesses has been simplified
    • eSU exists to address their questions
    • Volume of E-returns exceeded our goal
impact on business tax filings1
Impact on Business Tax Filings
  • For the quarter ending 03/31/06:
    • 98% of withholding tax returns filed through eFile & Pay
    • 95% of sales and use tax returns filed through eFile & Pay
impact on withholding tax
Impact on Withholding Tax
  • Percent of electronic returns by quarter:
    • March 2005: 87.7%
    • June 2005: 89.6%
    • September 2005: 90.8%
    • December 2005: 97.2%
    • March 2006: 98.3%
impact on sales use tax
Impact on Sales/Use Tax
  • Percent of electronic returns by quarter:
    • September 2005: 90.6%
    • December 2005: 92.3%
    • March 2006: 95.3%
conclusion
Conclusion
  • We believe education and marketing helped make eFile & Pay a success.
  • Permanent staff, temporary employees & department wide backups gave us the customer support we needed.
    • With all available people we could have up to 41 on the phones
phone statistics
Phone Statistics
  • Fiscal Year 2006 ACD Phone Call Volume
    • Total calls: 117,063
    • Highest volume week: 7,169 (10/24 to 10/28/2005)
    • Highest volume day: 1,737 (10/31/05)
    • Average week: 2,251
    • Average day: 465
phone statistics1
Phone Statistics
  • Ratio of Transactions to Phone Calls
  • July 2005 through March 2006
    • 5.4 Quarterly Returns per phone call
    • 9.2 Returns/Payments per phone call
conclusion1
Conclusion
  • Through the use of technology:
    • Improved customer service
    • Reduced the taxpayer’s burden
    • Promoted voluntary compliance
    • Created efficiencies within the department.
conclusion2
Conclusion
  • Still things to do…
    • Increase % of electronic payments
      • Businesses eFile return but remit paper check
      • Need to raise their comfort level
    • Continue to make enhancements
      • Based on customer feedback
      • Several enhancements made in April 2006
    • Work on nonfilers
      • Reminder emails & letters after due date
contact information
CONTACT INFORMATION
  • Paul Benson, Taxpayer Services Manager
  • Web site: www.state.ia.us/tax
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