Predictive Analytics Provides Returns for Tax Collection Agencies

The deadline to file personal income tax returns has come and gone, but the work of tax collectors never ends. Today, Predictive Analytics technology is making it easier for tax collection agencies worldwide to pursue and maximize returns on habitually delinquent accounts.

SPSS, a global provider of Predictive Analytics software and solutions, enables government agencies to become more efficient by reducing the number of audits performed on compliant accounts, and more effective by funding vital public service programs with recovered tax dollars.

In the area of tax collection, government agencies use SPSS Predictive Analytics software to quickly risk-assess accounts and accurately identify those with a high probability of delinquency. Predictive Analytics also helps determine the most profitable collection strategies and saves funds by focusing the limited audit resources on the most productive cases.

The Comptroller of Public Accounts (CPA), the government agency responsible for revenue management and compliance in the State of Texas, first deployed SPSS in 2003 for audit selection. Now, it uses Predictive Analytics to score and prioritize delinquent accounts based on debt size and likelihood to pay, which is determined based on dozens of behavioral indicators.

Dr. Daniele Micci-Barreca, principal at Elite Analytics LLC, an Austin-based consulting firm specializing in tax compliance analytics, said, "The use of Predictive Analytics in the tax compliance arena is definitively growing, both in the U.S. and abroad, and the foresight from progressive agencies like Texas CPA is creating momentum. SPSS is the de facto leader of Predictive Analytics software in this market segment, and has made this sophisticated technology very accessible and easy-to-use for the public sector."

SPSS enables all levels of government local, state and federal to analyze and identify patterns in multiple data sources, such as taxpayer profiles, previous filings, call center notes and audit history; and share these findings graphically across geographic and jurisdictional boundaries. This ability allows agencies to anticipate taxpayer behaviors and events and maximize limited resources.

"Government agencies that incorporate SPSS Predictive Analytics software into their overall IT infrastructure are making a wise investment with their taxpayers' dollars as the returns in better collections are high," said Jack Noonan, SPSS chairman, president and CEO. "By capturing the value within data, predicting behaviors and events, and then acting on that knowledge, organizations worldwide are able to improve business processes and extend the overall value of their IT systems."

Predictive Analytics is used universally by commercial and government organizations to better understand and predict future behavior by analyzing demographic, transactional and attitudinal data to attract and retain customers, grow revenue, reduce fraud and mitigate risk. All 50 U.S. state governments, and government organizations worldwide, use SPSS software for tax collection; fraud, waste and abuse prevention; homeland security; law enforcement; survey research; and e-government initiatives.