Department of Revenue Services

At a Glance

PAM LAW, Commissioner

Richard D. Nicholson, Deputy Commissioner

Tina Lawson, Chief of Staff

John M. Dunham, Assistant Commissioner and General Counsel

Established – 1901

Statutory authority – CGS Sec. 12-1

Central office – 25 Sigourney Street,

Hartford, CT 06106-5032

Internet address - http://www.ct.gov/drs

Number of employees – 630

Recurring operating expenses – $58,795,677

Organizational structure – Nine Divisions: Administration, Appellate, Audit, Collection and Enforcement, Information Services, Legal, Litigation, Operations, and Taxpayer Services.

Mission

The mission of the Connecticut Department of Revenue Services (DRS) is to administer the tax laws of the State of Connecticut and collect the tax revenues in the most cost-effective manner; achieve the highest level of voluntary compliance through accurate, efficient and courteous customer services; and perform in a manner which instills public confidence in the integrity and fairness of the state’s tax programs.

Statutory Responsibility

DRS administers state tax laws and collects state tax revenues. The agency is responsible for ensuring voluntary compliance with the tax laws. It accomplishes this by educating the public about their tax responsibilities and by assisting taxpayers in filing appropriate tax returns and paying taxes. DRS also has the authority to initiate action to collect unpaid taxes and apply enforcement measures, when necessary. DRS is responsible for exercising its authority fairly and impartially for both the State and the taxpayer.

Improvements/Achievements 2002-03

The Agency conducted its third Tax Amnesty Program from September 1 through December 2, 2002. The three-month program offered taxpayers the opportunity to pay their delinquent taxes without penalty and at a 25 percent reduction on the interest owed. The program collected more than $109 million, which exceeded the projected goal by more than $75 million. Of the 13,506 applications processed, the income tax accounted for 9,030 applications, the sales and use tax accounted for 2,234 applications and the corporation tax accounted for 1,022 applications. The remaining applications were attributed to other miscellaneous taxes.

Following the Tax Amnesty Program, the DRS Collection and Enforcement Division began an initiative to enhance compliance with the income tax. The program accelerates collection of unpaid income taxes by expediting the wage garnishment process.

In response to legislation, DRS implemented an increase in the Cigarette Excise Tax on March 15, 2003. Operating on a short schedule, an Agency team administered a 5,800 return mail-out for the cigarette floor tax, which produced $4.5 million in revenue. DRS anticipates collecting an additional $500,000 from bills to be mailed to non-filers.

DRS created a team to implement the new Business Entity Tax, which requires filing and payment by limited liability companies, limited partnerships and S-Corporations. This team represented all Agency divisions and initiated contact with more than 140,000 Connecticut and non-Connecticut companies to inform them of the new tax and filing requirements. The new tax is expected to collect more than $28 million annually.

Ensuring that taxes due under the state statutes are in fact remitted accurately and fairly, DRS continues to work toward accuracy in reporting and collection of overdue taxes. These efforts include:

· The Internet Top 100 Tax Delinquency List, which continues to yield outstanding results in bringing in overdue taxes. Since the first posting more than six years ago, DRS has collected more than $161 million from delinquent accounts, and it has resulted in a 65 percent turnover rate of accounts receivable.

· The project that verifies credit for income tax paid to other jurisdictions is a program that compares amounts claimed with data from other states. This year’s initiative resulted in the adjustment of 3,260 accounts, netting $4.45 million in additional tax revenues.

· The Discovery Unit along with the C&E Field and Recovery Subdivision secured more than 4,600 new registrations through various compliance programs. These programs generate approximately $27 million annually.

· The Audit Division generated more than $403.4 million in assessments during the fiscal year. This was a 6 percent decrease in assessment activities compared to the prior year, which can be attributed to the Tax Amnesty Program.

· The C & E Division collected $144.5 million in overdue tax revenue this year. This represents a 2 percent increase in collection activities over the prior year.

· The Operations Division facilitated the receipt of more than $5 billion in tax payments through electronic funds transfer, which is more cost effective for the Agency. This represents more than half of all revenue received.

· The appeals/litigation process closed 1,260 cases with a resolved dollar value in excess of $116 million. Of Appellate Division total determinations, 94.4 percent became final and were not appealed.

· The DRS Paperless Filing Initiative received more than 633,000 returns through some electronic means. This represents a 16 percent increase in electronic filing from the previous year. The DRS web site also received more than 700,000 hits.

Strategic Planning

DRS continued implementation of the Integrated Tax Administration System (ITAS), which will provide a case management approach to customer service and tax administration management for the Agency. Once completed, ITAS will provide the technological backbone for vertical and horizontal interaction between internal and external data. It will enable the Agency’s highly trained workforce to maximize information for the highest performance of tax administration. This year, DRS worked closely with DOIT and Accenture, the ITAS contractor, to establish the required technical infrastructure. This included the installation of required servers and nearly 200 PCs. The first phase of the project will convert the sales and use, withholding, businesses entity and corporation taxes to the new, integrated information management system. This phase will be complete by December of 2003. The entire project is slated for completion in 2005.

Affirmative Action, Diversity and Equity

DRS is proud of its accomplishments in developing a truly diverse workforce and an equitable environment for our employees. Our volunteer Diversity and Opportunity Committee (DOC), with employees from all levels of the organization, has been the catalyst for creating energy and excitement in our planning process, and providing valuable assistance. DOC, along with our professional staff, assisted in implementing positive steps to build awareness of differences among the work population and greater understanding of the special needs of colleagues.

DRS was commended by CHRO for exceeding its contract set-aside goals for both small business and minority business enterprises, for its advisory committee activities, and for its mobility programs in support of affirmative action. For the first time in the Agency’s history, DRS met 100 percent of its hiring goals and met more than 70 percent of its promotion goals. DRS continues to make available the tools, training, and support which ensures that every employee is able to reach his or her career goals at the Agency.

Taxpayer Services participated in planning for the Small and Minority Business Showcase with the Secretary of State’s Office. The program provided small and minority-owned businesses with important state information.

Together, these efforts toward achieving diversity and equity throughout DRS have contributed to the outstanding success of the agency in retaining enthusiastic employees who are committed to our mission of public service.