Department of Revenue Services

 

 

 

At a Glance

 

PAM LAW, Commissioner

Richard D. Nicholson, Deputy Commissioner

Tina M. Lawson, Chief of Staff

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 – 692

Recurring operating expenses – $61,826,855

Organizational structure – Nine Divisions: Administration, Appellate, Audit, Collection & 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.

 

Public Service

     During the 2006 income tax season DRS extended its telephone hours until 7 p.m. on January 30 and February 6 to assist taxpayers filing income tax returns.  On Saturday, April 15, the Hartford office was open from 9 a.m. until noon, and on Monday, April 17, the Hartford office remained open until 8 p.m. to assist taxpayers and to answer tax questions by telephone.

 

     Use of the DRS website at www.ct.gov/drs continues to grow.  An average of 211,335 visits were made to the DRS home page each month.  Recent News Stories on the homepage alert all visitors to tax changes and other timely information.

      Taxpayers can now receive email alerts with updates of the latest tax information. Taxpayers may register for any or all of the following email alerts:

·                     DRS-E-NEWS - Tax news and notification, legislative updates, and links to new publications and forms;

·                     Employer's withholding tax information;

·                     Press releases;

·                     Fast-File - information about our online business tax filing system;

·                     e-File (fed/state income tax electronic filing); and

·                     Top 100 Delinquent Taxpayer List

 

     During the past fiscal year, 192 e-alerts were sent out to registered subscribers.  Information about subscribing to e-alerts is included on all DRS publications and on various web pages on the DRS website.

 

Improvements/Achievements 2005-06

     Working with Accenture, DRS implemented the third of five phases of the new Integrated Tax Administration System (ITAS). The Data Warehouse component gives the Agency improved compliance and research programs, as well as improved functionality for Audit and Appellate. The new Auditor’s Workbench allows staff to directly access taxpayer information while working in the field. Through ITAS, the Agency also has:

 

·                     Replaced outdated programs previously serving DRS operations;

·                     Converted all business to the new system;

·                     Streamlined operations for greater efficiency

·                     Retired the 30-year-old system that supported business tax processing;

·                     Enhanced the way the agency manages audit case information; and

·                     Reduce physical storage requirements

 

     The final two phases of ITAS (Income Tax and electronic Taxpayer Service Center) are scheduled for completion in the fall. The electronic Taxpayer Service Center (TSC) will replace the present WebFile and Fast-File systems, giving taxpayers more autonomy in dealing with the agency and managing their tax accounts.

     Ensuring that state taxes are remitted accurately and fairly, DRS continues to work toward accuracy in reporting and collection of overdue taxes.  Some efforts undertaken by the Agency include:

 

·                     The Appeals/Litigation process closed 1,049 cases with a resolved dollar value in excess of $62 million.  Appellate reduced its inventory by 5 percent to 819 cases, while the average age of inventory declined by 11 percent to 318.  Of Appellate Division total determinations, 94 percent became final and were not appealed.

 

·                     The Audit Division’s Income Tax Subdivision undertook a reorganization that included the creation of a new audit unit called the Business and Employment Tax Audit, or BETA Unit.  The goal of this unit is to increase the accuracy and timely collection of taxes from flow-through entities and withholding tax.  Through specialized training, a group of 20 examiners has been assembled to address complex tax issues including abusive tax shelters and employment tax issues.

 

·                     The Audit Division Discovery Unit has begun an Affiliate Nexus Project whereby state agency contracts are reviewed to determine if all vendors and their affiliates are properly registered as required by law.

 

·                     Collection and Enforcement’s Bankruptcy Unit began to file electronic bankruptcy claims in the District of Connecticut effective August 2005.  These now represent 16 percent of all claims filed in all districts.  The advantages are reduced paperwork, reduced lead time, reduced mail cost and increased accuracy. For this fiscal year, a combined total of 929 bankruptcy claims were filed with a value of approximately $14,000,000.

 

·                     The Audit Division’s Excise Unit coordinates the International Fuel Tax Agreement (IFTA) audits for the Agency.  DRS is subject to periodic reviews of its IFTA program for compliance with the fifty-eight member Agreement (48 contiguous states and 10 Canadian provinces).  These reviews, called Program Compliance Reviews, are conducted by a team of representatives from other member jurisdictions and the IFTA, Inc. repository.  A review of Connecticut’s program was conducted on November 1 and 2, 2005 for calendar years 2001 through 2004.  The Department was found to be in good standing with the Agreement and has been deemed compliant with the Agreement’s governing documents for the registration, returns processing, revenue accounting, collections, and audit functions.

 

·                     The Suspicious Filer Exchange Program in fiscal year 2005-2006 successfully blocked 269 fraudulent state income tax returns from Chicago to Kenya, saving $832,446 in fraud refunds.  This is an increase of 34 percent in blocked returns and an increase of more than 45 percent in blocked or recovered refunds over the previous fiscal year.  Strategies developed during the year have been incorporated into the new ITAS Fraud Scoring System, which has even greater potential for detecting fraudulent refund claims.

 

     DRS saw a 38 percent increase in electronically filed returns along with a 40 percent increase in Fast-Filed (electronically-filed business) returns for the 2006 filing season.  Conversely, paper filing decreased by 23 percent.  The breakdown of returns and payments received by various filing methods for the 2006 filing season is as follows:

 

Telefile                                   88,000

Fed/State E-File                    800,000

WebFile                                67,000

Fast-File                                 754,000

Paper file                                2,200,000

 

     Of the 1.6 million personal income tax returns received by DRS, 60 percent were filed by one of the electronic methods listed above.  Paper accounted for a total of 327,000 estimated income tax payments, while 4,900 were received electronically.  CT-WH income tax withholding coupon payments account for 354,000 of the total Fast-File figure of 754,000.

     Electronic Funds Transfer accounted for $ 5.47 billion of total revenue received.

     During the 2006 filing season, tax practitioners that prepared more than 200 or more 2004 income tax returns were required to submit all 2005 income tax returns electronically. For the 2007 filing season, any practitioner that prepared 100 or more 2005 income tax returns, will be required to e-file the 2006 returns.

 

Strategic Planning/Business Planning

     DRS continues work on the final phases of ITAS. The third phase of the project was completed in the spring of 2006. The data warehouse provided the Audit Division with the Auditor’s Workbench, a method of providing the taxpayer’s filed returns electronically, downloaded from the main system to a laptop computer for field examiners to use to determine if the proper tax has been paid. The final conversion pieces, the Income Tax and the new Taxpayer Service Center, will be completed in the fall of 2006.  The full implementation of the ITAS system will provide numerous benefits aimed at streamlining current outdated functions, and eliminating redundant systems that do not interact.  Also, ITAS will enable the Agency’s highly trained workforce to maximize taxpayer information for the highest performance of tax administration.

 

Affirmative Action, Diversity and Equity

     DRS is proud of its accomplishments in developing a truly diverse workforce and an equitable environment for its employees. The Agency’s volunteer Diversity and Opportunity Committee (DOC), with employees from all levels of the organization, has been the catalyst for creating energy and excitement in the Agency’s planning process, and providing valuable assistance. DOC, along with its 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 achieved more than 52 percent of the Agency’s goal in helping employees in targeted populations realize career advancement opportunities. 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 DRS.

     DRS has an internal Speakers' Bureau, which utilizes diverse members of the staff to make presentations in communities, schools, colleges and for professional groups, thus emphasizing career opportunities for all. During the last fiscal year, the Speakers Bureau provided 22 speakers to various organizations and agencies, including the Connecticut General Assembly’s 4th District senior fair on October 25, 2005 in the Lowe Building at Manchester Community-Technical College.   Some topics requested of the Speakers Bureau ranged from legislative changes, composite income tax, income tax, farmer’s exemption, sales and use taxes, contractor bonds, motor vehicle fuel tax, real estate conveyance tax, and gift tax. 

     Taxpayer Services participated in the planning of the Small and Minority Business Showcase under the auspices of the Secretary of State's office on August 9, 2005 at Connecticut Grand Hotel and Conference Center at 3580 East Main Street in Waterbury. 

     On March 30, 2006, the Community Renewal Team, Inc. invited DRS Taxpayer Services to provide tax information for the 7th Annual Resource Fair at 555 Windsor Street in Hartford.

     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 the Agency’s mission of public service.