PROVIDENCE – Gov. Donald L. Carcieri today announced the launch of a technology-based tax-compliance program called Compliance 2010: Revenue for Rhode Island’s Future.
“Compliance 2010 uses 21st-century technology to identify delinquent and under-reporting taxpayers and to bring new taxpayers onto the rolls during the next two fiscal years,” Carcieri said in a statement this morning. “The ability to coordinate state and federal tax information will help the State recoup an estimated $10 million in revenue and identify upwards of 10,000 noncompliant taxpayers.”
The core of the new initiative will be a centralized “data warehouse” system – funded by a $2.5 million state appropriation approved by the General Assembly in fiscal 2007 – that will gather tax information from the U.S. Internal Revenue Service, the R.I. Office of the Secretary of State and other sources.
“The primary goal of the data warehouse is to create an environment where all information used by [the R.I. Division of] Taxation is centralized and standardized with updates from a variety of data sources, allowing thorough and comprehensive identification and collection,” said Gary S. Sasse, director of the R.I. Department of Revenue.
After the $2.5 million setup is completed, a milestone the state is slated to reach in November or December, “there will be an annual maintenance/license cost of about $70,000 per year,” Sasse told PBN in an e-mail interview today.
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The database will be used to “ensure that individuals and businesses pay no more or no less than the tax owed,” state officials said.
It will help the state to identify individuals and corporations that may have under-reported their income or failed to file a state income tax return, and businesses that under-report or fail to report income or sales taxes or withholding. It also will be used to identify and notify taxpayers “when a federal audit requires an amended state return be filed.”
Sasse said that, “over the past few years, several states have seen an increase in revenue utilizing a data-warehouse system such as this for tax-compliance issues, resulting in tens of millions of dollars of recouped and new revenue.”
For instance, “Over the past five years, Massachusetts has used their data warehouse to expand audits and collections. To date, Massachusetts has seen almost $400 million in benefits from their data warehouse,” Sasse said. “In South Carolina, the Department of Revenue has seen over $34 million in benefits during the last two years from increase collections and compliance programs attributable to their data warehouse.”
News and information from the R.I. Governor’s Office are available at www.governor.ri.gov. Information from the R.I. Division of Taxation is available at www.tax.ri.gov.
