AMS to upgrade Missouri tax systems

Missouri Department of Revenue

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The Missouri Department of Revenue has signed an $11 million project with American Management Systems (AMS) Inc. to upgrade the state's tax collection and operating systems on mainframes to help find delinquent taxpayers.

The project will be implemented in phases, said Jonathan Light, vice president of the company's public sector group. In six months, AMS officials will implement the Strata risk-management decision tool, allowing tax employees to use statistical models to prioritize cases they're working on.

"There are many taxpayers who will pay voluntarily, but they slipped out of compliance and that was sort of beyond their control," he said. "They're absolutely good folks who want to go back into compliance. You can statistically determine who those people are."

The company will then install its Computer Assisted Collection System (CACS), a case management collection tool that can sort cases by age of the debt. CACS, to be implemented by spring 2005, can generate letters notifying delinquent taxpayers of past-due taxes or begin the process of legal action.

AMS, which has been in negotiations with Missouri for a year, implemented the state's current tax collection system in the late 1980s, Light said, adding that the system will be Web-enabled. Taxpayers will be able to fill out a self-service application to set up repayment conditions. "Taxpayers break their payment agreements less often when they set them up themselves," he explained.

The project is based on a performance-based contract, which means AMS will recoup its investment on a percentage of increased tax collections. The company, which has developed similar projects for four other states and other public-sector organizations, expects to makes its money back by June 2006, Light said.

More state governments, many of them mired in their worst budget crises in 50 years, are revamping tax systems to improve delinquent collections. Missouri is at the front of the next wave of states to enter into a performance-based contract for such a project, he said.

Nearly a dozen states have enacted legislation to allow for such financing deals and more will follow suit in the near future, Light said. "It takes time for these things to weave its way across the country," he said. "People were very focused on immediate crisis of budget shortfall in the last year. The size of the problem was so great, they couldn't deal with everything at once."

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