AWS Public Sector Blog
Taxes, governments, and great experiences using the cloud
Government agencies focused on tax, revenue, employment security, and labor that are responsible for collecting various types of taxes from individuals and businesses such as income, payroll and unemployment insurance are often challenged by heavy workload. These challenges were exacerbated by COVID-19, newly enacted benefit programs (e.g., Pandemic Unemployment Assistance or PUA) and increased fraud and cybercrime. This forced governments to work within the constraints of reduced revenue, tighter budgets, and workforce shortages. Information technology and cloud services can be enablers for modernization of these business processes and tax systems, and improved constituent experience. For public administrators, these tools can also shorten the window between the enactment of a new law and its timely and successful implementation.
The need for evolution of processes, and technology towards transformation
As I recall from my own experience in state government, many conversations centered on how to do more with less. What can be done to prevent fraud? Fewer employees working with smaller budgets continue to carry a heavy workload, processing millions of tax returns and payments, handling customer questions and concerns, processing paper and digital documents, analyzing and reporting data, conducting audits, and enforcing collections—all while working to stay in compliance with legislative mandates. To put it into perspective, in 2020 (for tax year 2019), the Internal Revenue Service (IRS) reported that over 71.7 million taxpayers (91.6%) e-filed their federal tax returns, with a backlog of 16 million paper returns.
In 2020, the National Taxpayer Advocate (an independent organization within IRS that helps tax payers) stated in their report to Congress that staff shortages, antiquated technology, telephone, and in-person service challenges limited the continuing modernization of the IRS and its reliance upon electronic access and digital communications. Additionally, government agencies are tasked with addressing the challenges of tax evasion and fraudulent tax claims. These challenges are similar across various tax types and federal and state agencies alike. Amazon Web Services (AWS), along with AWS Partners, can help enhance both the employee and constituent experience, as well as remain compliant with IRS Publication 1075, reduce operational costs, reduce or prevent fraud, and increase productivity and revenue collections. Here’s how governments are addressing some major challenges using the AWS Cloud.
Improving constituent experience with omni-channel cloud-based contact center
Constituent engagement is how governments communicate, actively listen, and respond to constituents whether it is related to taxes or any other government service. AWS helps governments with cloud services related to various modes of communications including web, mobile, chatbots, telephony, and personal voice assistants like Alexa.
These omni-channel cloud-based services are infused with artificial intelligence (AI) and analytics including social media sentiment analysis to preemptively address a large volume of anticipated questions, eliminating much of undifferentiated work currently expected from employees and allowing employees to focus on the more important tax processing effort. Amazon Connect is a modern omni-channel cloud-based contact center service that scales to support businesses of any size. It’s simple to setup, use, and scale.
A June 2020 Forrester report on Amazon Connect highlighted a reduced system administration effort of up to 60%, reduced call volume routing by up to 24%, shortened agent hold time by up to 15%, and reduced subscription and usage costs by 31%. In 2020, during the COVID-19 pandemic, the state of West Virginia soft deployed Amazon Connect in 72 hours and scaled quickly to handle more than 61,000 unemployment insurance claims related calls in one day. Learn more in the case study.
The state of Georgia was able to engage constituents with an Amazon Echo device and new Alexa skills to provide assistance with government services.
Automating document processing and management through robotic process automation (RPA)
For the millions of paper tax forms that are processed manually, AWS pre-trained AI services can help with automation. They handle vision, speech, text, search, chatbots, forecasting, and fraud detection, among others. Learn how customers can use Step Functions and Amazon Textract to build a workflow that enables automated processing of invoices. AWS Partner RPA solutions, UiPath as an example, are readily available to quickly automate workflows and back office processes that are labor intensive, such as tax forms processing.
Detecting and preventing fraud
A March 2021 article titled $200 billion was the cost of identity theft last year, so how can you guard against tax fraud? summarizes the challenges with increased fraud in recent times. Amazon Fraud Detector is a fully managed service that unlike general-purpose machine learning (ML) packages, is designed specifically to detect fraud. Amazon Fraud Detector combines your data, the latest in ML, and more than 20 years of fraud detection experience from Amazon.com and AWS to help prevent/detect fraud. Learn how to develop and run a robust proof of concept (POC) for the Online Fraud Insights model, so that you can evaluate the value of Amazon Fraud Detector to your business.
Supporting systems integration and data aggregation
When processing returns, governments need to access various interfaces between tax systems and other systems to look up incarceration data, lottery winnings, etc., that impact filing information. Integrating systems to remove data silos and aggregating data can help streamline the process and improve processing time. AWS Application Integration Services support such integrations.
Recently, AWS worked with Connect for Health Colorado (C4), Colorado’s public nonprofit health insurance marketplace, to design and gain IRS’s approval for C4 to process federal tax information (FTI), compliant with IRS Pub 1075, using AWS Lambda serverless approach—a first of its kind granted by IRS.
Further, to gain better insights and for predictive capabilities, customers are integrating siloed data into a data lake using a lake house architecture. This AWS Big Data Blog post describes how to harness the power of data with AWS analytics at higher performance, scale, and cost advantages over traditional on-premises solutions.
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