In order to address the 3 million delinquent or nonfiling tax payers, California Franchise Tax Board uses IBM analytics to prioritize their case loads and increase revenue.
Part of the California Government Operations Agency, the California Franchise Tax Board (FTB) collects state personal income tax and corporate income tax in California
It is composed of the California State Controller, the director of the California Department of Finance and the chair of the California Board of Equalization.
When faced with a list of more than three million delinquent or nonfiling taxpayers, it’s hard to know where to start trying to collect
Relying on experience and anecdotal evidence no longer worked for the California Franchise Tax Board (FTB), and state revenue was down. It was time to decrease the multibillion-dollar gap between what the board collected and what it was owed.
The department developed an advanced analytics solution that uses information from state and federal sources
This analytics solution allows the department to identify the attributes and attribute combinations that are most common among successfully resolved cases. The solution then uses sophisticated algorithms to score millions of cases based on these attributes, prioritizing the department’s workload according to how likely each case is to result in payment and how much that payment might be.
During the first two years after implementation, the solution helped the California FTB increase revenue by more than USD400 million
It has also brought about a 300 percent improvement in the number of successful attempts to contact business-entity nonfilers. Finally, the solution has helped the California FTB maximize efficiency for its audit, nonfiler and collections departments because staff can focus on the cases with the highest potential for revenue reclamation.