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State of New Jersey Experiences in Tax Processing

State of New Jersey Experiences in Tax Processing. State of New Jersey Division of Revenue. Making Technology Work Statewide. Steve Csogi August 17, 1999. Outline. Background DPS Project Scope System Architecture Forms Inscript Processing Results Next Steps. Background.

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State of New Jersey Experiences in Tax Processing

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  1. State of New JerseyExperiences in Tax Processing State of New Jersey Division of Revenue Making Technology Work Statewide Steve Csogi August 17, 1999

  2. Outline • Background • DPS Project Scope • System Architecture • Forms • Inscript Processing • Results • Next Steps State of New Jersey Division of Revenue

  3. Background State of New Jersey Division of Revenue

  4. New Jersey Division of Revenue • Formed in January 1997 • Tax and revenue functions transferred from • Division of Taxation • Division of Motor Vehicles • Division of Commercial Recording • Department of Environmental Protection • Department of Labor • State’s ‘Lock Box’ for revenue collections • State’s Imaging Center • 1998 Inscript Customer of the Year - Capture ‘98 State of New Jersey Division of Revenue

  5. Tax Processing in New Jersey • New Jersey Division of Revenue processes all tax returns and payments from New Jersey taxpayers • 8.6 million total returns filed each year • 3.5 million personal income tax returns filed • 1.6 million personal income tax returns filed in April • Annual processing requires: • 115 Permanent Staff • 400 Seasonal Staff • Outside Contractor to extract and ‘prep’ tax returns State of New Jersey Division of Revenue

  6. Where we were • Processes were manual with traditional data entry • Aging data entry equipment with excessive maintenance costs • “Heads Down” data entry resulting in Repetitive Strain Injuries and lawsuits • Data entry operators were being paid incentive • Shrinking labor market of trained data operators • Increased demand to “do more with less” • Paper returns were kept in files and stored State of New Jersey Division of Revenue

  7. Front End Modernization Project • Four Major Project Phases • Automated Mail Extraction (OPEX Corporation) • MPE 5.0 / System 150 / MPS 30 • 6,000/hour vs. 150/hour • Replacement of Data Entry System to open architecture (Unisys/DCR) • Integration of Image Enabled Remittance Processing (Unisys/DP500) • Full Page Image Processing - Document Processing System (Logicon/Northrop Grumman) State of New Jersey Division of Revenue

  8. Goals & Projected Return on Investment • Reduce seasonal employee hiring and salary expense • Less traditional data entry • Faster deposit of tax revenue • Faster refunds to taxpayers • Leveraging existing technology investment • DPS throughput of 38,000 income tax returns per day • Expand functionality to add new forms State of New Jersey Division of Revenue

  9. DPS Project Scope State of New Jersey Division of Revenue

  10. Project Scope - Size & Processing • Process 4 million returns annually • NJ1040s received in April must be processed through DPS by May 31 • DPS will operate over 2 shifts / 14 hrs per day • 12 person hours are available for manned operations such as scanning and verify • DPS is available 24 hours per day for unmanned operations such as deskew, OCR/ICR, system backup • Net peak DPS requirement is to process 38,000 NJ1040s per day to achieve a maximum 6-week refund turnaround State of New Jersey Division of Revenue

  11. System Architecture State of New Jersey Division of Revenue

  12. Functional Architecture • Image Capture • Data Capture • Data Export • System Services State of New Jersey Division of Revenue

  13. Functional Architecture • Image Capture Subsystem • Scan Tax Documents and Attachments • Assign a Document Locator Number and Form Codes • Handle Input Errors and Exceptions • Maintain Batch Integrity State of New Jersey Division of Revenue

  14. Functional Architecture • Data Capture Subsystem • Perform OCR on Machine Print Text • Perform ICR on Hand Print Text • Perform Review and Repair for Low Confidence Recognition, and Math/Edit Errors • Convert Image Fields to ASCII Data State of New Jersey Division of Revenue

  15. Functional Architecture • Data Export Subsystem • Accepts Tax Form Data from the Data Capture Function • Reformats Data into Mainframe Output File Spec • Transfers Image Data to Backend Imaging System • System Services • Overall System Control and Process Flow • Manages Workflow and Data Structures • Handles Batch Creation and Processing • Monitors Local Network Communications State of New Jersey Division of Revenue

  16. DPS Architecture State of New Jersey Division of Revenue

  17. Forms State of New Jersey Division of Revenue

  18. Joint Project between State and Logicon/Northrop Grumman Three Personal Tax Forms to Process NJ1040 Hand Print NJ1040 Machine Print HR1040 Hand Print (Homestead Rebate Only) State Establishes Policy and Form Rules Joint Team Designs Forms Northrop Grumman Implements Form and System Changes Post-implementation Changes for Production Forms Building Process - NJ1040 State of New Jersey Division of Revenue

  19. Forms Building Process • Hand Print NJ1040 Forms • Two pages/Four form-sides • Barcodes (2-of-5 Encoding) on each form side • Multiple Registration Points on each Form-side • Constrained Boxes • Number of Fields: 101 • Page 1 - 33 • Page 2 - 23 • Page 3 - 19 • Page 4 - 26 • Name and Address Block Processing for both Label and Non-label Returns State of New Jersey Division of Revenue

  20. Inscript Forms Definition • Hand Print NJ1040 • 2 Physical Pages - 4 Recognized form-sides • One FDF/form-side - 101 Total Fields • Implements 16 Math and 110 Edit Rules • Registers forms using pre-printed registration marks • Contains ICR and MarkSense fields • Recognition rate thresholds typically set at 85% • Page End Rule Block enforces cross-field validation • Output file passes through specific Unix processes then on to the Verify function State of New Jersey Division of Revenue

  21. State of New Jersey Division of Revenue

  22. Forms Building Process • Machine Print NJ1040 Forms • Supports 35 Tax Software Versions • One page/One side • Large Scan Band Recognition Area • Barcode on Page 1 • Scan Band Registration Corners • Number of Fields: 101 • Name and Address Block Processing of Machine Printed Address Data State of New Jersey Division of Revenue

  23. Inscript Forms Definition • Machine Print NJ1040 • One Physical Single-sided Page - One recognized form-side • One FDF - 101 Fields • Implements 15 Math and 96 Edit Rules • Registers form using corner of scan band • “Two-step” Processing • Column-mode • Field-mode • Page End Rule Block enforces cross-field validation and syntax checking • Output file passes through specific Unix processes then on to the Verify function State of New Jersey Division of Revenue

  24. State of New Jersey Division of Revenue

  25. NJ1040 Success Builds Foundation for New Forms DPS Now Processes Wage Reporting Forms (WR30) WR30 Dropout Form WR30 Plain Paper Spec (PPS) Form Processed Quarterly 180,000 Employers file each period 144,000 single-page forms 36,000 multi-page forms result in 130,000 imaged pages 1.3 million employee records processed/quarter Over 32 million fields recognized per year State’s data base used to validate employer and employee data each quarter and reduce manual data verification Forms Building Process - WR30 State of New Jersey Division of Revenue

  26. Forms Building Process • WR30 Dropout Form • Variable Number of Pages • Minimum One page/Two form-sides • Front-sides Pre-printed • Add Employees on Back • Barcodes (2-of-5 Encoding) on each form side • Multiple Registration Points and Constrained Boxes • Max Fields/page: • Front side: 68 and 100 • Back side: 28 • Pre-print 99 employees Max State of New Jersey Division of Revenue

  27. State of New Jersey Division of Revenue

  28. Forms Building Process • WR30 Plain Paper Spec (PPS) • Multiple Tax Software Supplier Versions • State-specified Printed Page Layout • Multiple, single-sided Pages • Maximum 99 employees • Text-line Registration • Max Fields/page: 108 State of New Jersey Division of Revenue

  29. Inscript Processing State of New Jersey Division of Revenue

  30. Inscript Environment • Inscript 7.0 • Fourteen (14) Pentium 333 MHz • 128 MB RAM • Windows NT Server Platform • Operates 24 hrs/day State of New Jersey Division of Revenue

  31. Inscript Performance Metrics • NJ1040 Page Processing Rates • 1997 Rates - Inscript 5 • Hand Print: 5-8 sec/page (4 pages) • Machine Print: 14-20 sec/page • 1998 Rates - Inscript 7 • Hand Print: 2-5 sec/page (4 pages) • Machine Print: 5-7 sec/page • Average Rate Increase Range: 120-180 % State of New Jersey Division of Revenue

  32. Inscript Performance Metrics • NJ1040 Field Recognition Rates • 1998 Hand PrintAverage 92.8 % • Page 1 - 93.7 • Page 2 - 85.3 • Page 3 - 96.5 • Page 4 - 95.1 • 1998 Machine Print • Page 1 - 98.1 % State of New Jersey Division of Revenue

  33. DPS Results State of New Jersey Division of Revenue

  34. 1998 Volumes & Throughput • Scanning • Exceeds 38,000 returns/day • 10 images/return equates to 400,000 pieces of paper and images/day • Inscript Processing • 90,000 Pages processed/day • 26,000 Machine Print • 64,000 Hand Print • Verify • 38,000 returns/day • 1/2 hour/batch vs. 2 hours/batch in conventional data entry State of New Jersey Division of Revenue

  35. Projected 1999 Volumes & Throughput • Scanning • 58,000 returns/day • Nearly 500,000 images/day • Inscript Processing • NJ1040 • 90,000 Form-sides processed/day • 3.8 M fields/day • WR30 • 64,000 Form-sides processed/day • 800,000 fields/day • Verify • 58,000 returns/day State of New Jersey Division of Revenue

  36. Expanding Technology Base Sub-system 1995 1996 1997 1998 1999 Scanners 3 6 8 8 9 CPU Modules 1 2 6 6 6 Inscript Server 6 9 14 14 14 Verify WS 10 20 33 63 63 State of New Jersey Division of Revenue

  37. Peak Performance • Scanning • 04/30/1998 50,300 page sized documents / 553,300 pages • Recognition • 04/27/1998 5.7 million fields • Verify • 04/27/1998 57,546 page sized returns • Image Committals • 04/28/1998 895,906 pages • 633,006 page sized / 262,900 coupon sized State of New Jersey Division of Revenue

  38. Next Steps State of New Jersey Division of Revenue

  39. Processing Changes • Implement the 1999 NJ1040 Income Tax Form • Continue Processing Wage Reporting Form (WR30) • Integrate Key-From-Image Functions • Implement Page-size Remittance/Document Processing • Implement Senior Citizens Property Tax Freeze Form • Provide Imaging-based services to other state agencies as a result of consolidation efforts State of New Jersey Division of Revenue

  40. Upgrade DPS Components • FormWare software • Add Formware 2.5 Capabilities • System Software • Operating System • Kodak Capture Subsystem • Expand System Configuration • Adjust for increased workload and throughput • Allow for additional levels of redundancy • Adjust for added functionality • Year 2000 compliance (complete 8/1999) State of New Jersey Division of Revenue

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