States hungry to grab billions in back taxes can now call in the big guns in the form of IBM.
Big Blue announced on Monday new Tax Collections Optimizer software designed to help state governments more effectively collect money owed from deliquent taxpayers.
The software uses data analytics to determine the total amount of back taxes owed. It then compares those findings with the existing workload and available staffing at state tax agencies and recommends the best methods for collecting those taxes.
Specifically, the software analyzes certain taxpayer information, such as the total amount of money due and an individual's past tax payment history. It then determines how tax collection agents can most effectively follow up and deal with each delinquent taxpayer, given the limited time and resources of each agent, IBM said.
"The current processes used to recover unpaid funds by tax agencies around the world are complex, outdated, costly, and generally ineffective," Michael Schroeck, vice president of Business Analytics and Optimization Services for IBM Global Business Services, said in a statement. "Organizations are handling more information and data than ever before, but at the same time they know they are not keeping pace."
State governments are under pressure to balance their budgets with less staff and fewer resources, prompting them to turn to technology to bring in tax dollars. The average state is now looking at billions of dollars in back taxes owed, said IBM.
The state of New York already worked with IBM last year to implement the new software and is hoping to scoop up an additional $100 million over the next three years as a result.
The Tax Collections Optimizer was designed with IBM's research arm as part of the company's fraud detection software.