Case Study
Transforming Taxpayer Systems
Replacing aging IRS systems, validating information return processes and enhancing compliance controls for more than 150 million W2’s and 250 million tax-related documents.
Introduction
The Internal Revenue Service (IRS) is a bureau of the Department of the Treasury and one of the world’s most efficient tax administrators, collecting almost $3.5 trillion in revenue and processing more than 250 million tax returns each year. The IRS is organized to carry out the responsibilities of the secretary of the Treasury and is entrusted with administering the implementation of tax laws, collecting individual and corporate taxes and ensuring accurate tax reporting and compliance. The mission of the IRS is to provide American taxpayers top quality service by helping them understand and meet their tax responsibilities and to enforce the law with integrity and fairness to all.
Challenge
The IRS faced significant challenges managing its legacy Information Returns Processing System (IRPS), which impacts the entire taxpayer population, including more than 150 million W2s and 250 million additional tax-related documents (1099, 1098, 1095, Schedule K-1, etc.) submitted during filing season. The IRS needed to replace these aging systems to provide more effective taxpayer services, while also enhancing data quality, accelerating compliance actions and simplifying validation systems to perfect all data that comes into the IR pipeline, including paper return data and Government-to-Government (G2G) sourced data.
Solution
CTEC was selected to modernize the Information Returns Processing System and replace legacy batch applications and submission processing systems. Our team deployed a new, modern code base, data models, database technology, open-source tools and enterprise services. By consolidating, standardizing and simplifying the Entry Point, Pre-Screening and Validation systems, CTEC was able to enhance the quality and timely delivery of information return data. These systems helped IRS employees improve customer service, fraud and compliance actions, while allowing taxpayers and third-party businesses to correct erroneous or incomplete information.
Results
The upgraded IRPS system enabled the IRS to handle new types of information returns with complex data relationships more effectively. Each document was ingested, indexed, validated and cross-referenced against matching or conflicting information. Additional tax compliance controls and processes were applied through data integrations with corresponding state agencies for fraud detection, balance due, collections, audit and payments. These combined systems and processes provided the agency with the necessary documentation, checks and balances to accurately report earnings and tax law compliance more efficiently and effectively throughout the filing process.
Results
150M
W2’s sent
250M
documents
100K
IRS workers
Solution
- IT Modernization
- AI & Machine Learning
- Robotic Process Automation
- Compliance Analytics
- Innovation Lab
- IT Operations & Maintenance
Testimonials
“CTEC has been incrementally modernizing the tax ingest system to ensure that the IRS is able to accomplish its mission with fewer staff and a lower budget, which keeps taxes lower for everybody.”
CTEC Account Lead, IRS
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