With processing tax returns typically very costly, some state governments are using technology solutions through a practice called crowdsourcing to more efficiently complete these tasks and at the same time generate additional revenue.
In addition to taking longer to complete, traditional tax processing with paper normally requires hiring and training temporary workers for second shifts, which can cause increased budgets. Crowdsourcing, a term that was first coined in 2006, involves obtaining needed services, ideas, or content by seeking contributions from a large group of people such as an online community.
One state that shifted a decade ago from an old fashioned method of organizing tax returns to crowdsourcing is Pennsylvania. Waltham, Mass.-based Lionbridge Technologies, Inc. has partnered with the Pennsylvania Department of Revenue (DOR) to process more than 10 million paper tax returns a year through what it calls Enterprise Crowdsourcing. Donald Mackenzie, director of Enterprise Crowdsourcing at Lionbridge, said this process enables paper returns to be processed with the data placed behind the Pennsylvania DOR’s firewall and then beamed to Lionbridge’s secure cloud-based task platform so returns can then be completed non-stop around the clock.
“It is making the entire process so much more transparent and so much quicker,” said Mackenzie. “You don’t have to staff up when peak tax season comes along.”
Mackenzie said since crowdsourcing was instituted for tax processing, document turnaround time has improved 70 percent with the Pennsylvania DOR and processing accuracy is now at 99.99 percent. To ensure proper security, sensitive documents never leave the premises in context.
David Bratvold, CEO and founder of San Diego-based Daily Crowdsource, said Lionbridge is the only vendor in the market now who works with governments on crowdsourcing tax returns. He expects more governments to embrace this practice in near future due to the many logistical and financial advances it can result in.
“By using crowdsourcing they can improve the speed and effectiveness of [tax processing] while also improving quality,” Bratvold said. “By doing this you free up a lot of the labor costs doing it the traditional route.”
Other state DORs Lionbridge works with to improve efficiencies with tax processing include Louisiana, Indiana, Georgia, Connecticut, Ohio and Mississippi. Mackenzie emphasized that getting tax returns processed quicker allows states to more quickly track tax cheaters and this collect additional revenue. County and city governments have also approached Lionbridge recently about utilizing its crowdsourcing process.
“If they get their tax processing done even three to four weeks earlier it means the refund checks go out that much quicker,” said Mackenzie. “It really helps to close the tax gap.”
