Minnesota Department Of Revenue Accelerates Tax Processing And Reduces Costs

The mission of the Minnesota Department of Revenue (MDOR) is "to make the state's revenue system work will for Minnesotans." It provides tax information, filing and paying services, and enforcement activities that are designed to ensure that citizens have the information and means to fulfill their tax obligations. The department oversees the state's revenue system, which is made up of 28 state taxes and local property taxes collected by county governments. The department collects approximately $13.3 billion per year, serves 2.4 million taxpayers, and processes approximately 3.6 million tax returns annually.

The department's legacy mainframe system was 30 years old and relied on sequential batch processing of massive volumes of paper, and was itself merely an automation of historic manual processes. It was difficult to manage and was reliant upon labor-intensive processes that grew more expensive each year. Upon analysis, it became apparent that the existing system was deficient in several key areas:

• Taxpayer services: the system was inflexible and unresponsive to customers' needs and expectations. Batch processing was slow and it took up to 120 days for citizens to receive refunds.
• Tax and Budget Policy Implementation: the system could not respond efficiently to changes in tax laws. In addition, delays and errors in capturing return and payment information affected quality of the state revenue forecast.
• Compliance: problems with late, incorrect or inadequate data limited the ability to achieve compliance with state laws.
• Risk and Cost Management: the risk of a major system failure grew each year.