Cross-referencing Tax Databases To Detect Non/Under-Payment

Cross-referencing Tax Databases To Detect Non/Under-Payment

What problem does it solve? Many employers are making errors on their tax returns and forms. The state is not detecting a large majority of these mistakes, so that companies are under-reporting or over-reporting their liabilities. This reduces the revenues to the NJ Department of Labor and NJ Division of Taxation, in the case of errors in the employer's favor, and burdens the few businesses that overpay because of an error in our favor. What is your solution and who does it apply to? Cross-referencing information would allow NJDOL and Taxation to compare data with each other since employers are required to file with both entities. Different types of errors can be automatically detected, so that billing for these error can also be automated. These errors are currently only detected when audits are done on a small percentage of businesses. Cross-referencing would enhance internal control over the accuracy of all taxpayer returns and bolster revenues. In the case where an employer over-stated his/her liability, a refund can be remitted. What is the anticipated impact? Additional revenues will materialize from the overwhelming majority of errors (in the employer's favor) while significant refunds will be remitted to honest employers who over-report liabilities. Other types of inaccuracies will also be combed out so that the data is cleaner.

Points

To the comment below - I guess that no one ever thought of this idea before it was submitted by Philip Shapiro! That's the great outcome of this competition - a showcase for letting novel and impactful ideas shine through!

I'm surprised the state doesn't already do this!

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