TDEC Provides to State Tax Agencies What the IRS Needs to Resolve Its Paper Returns Backlog

While the regular tax filing season ended last Monday, the hard work of tax processing slogs on for the Internal Revenue Service (IRS). The chronically underfunded, understaffed government agency is already behind in processing past year tax returns. With millions of new returns now added to its workload, the IRS is overtaxed.

Among the many issues the IRS faces are the millions and millions of paper-based returns it continues to receive. The intensive manual labor required to process paper returns is not a new problem. State tax agencies have wrestled with this and found the solution: outsourcing. And TDEC has been in the forefront of providing such services.

Most of the states’ tax work is concentrated in time, making the use of full-time government employees economically unfeasible. For 42 years, TDEC has provided data capture, verification, imaging, and indexing services to state tax agencies, alleviating the states’ labor risk.  

And the proof is in the pudding. Until the state successfully transitioned to requiring businesses to e-file, Connecticut outsourced its paper returns processing to TDEC, resulting in accurate and on-time processing. Likewise, New Jersey and other states and municipalities have done the same with equal results.

“Opening mail, preparing documents, scanning and data entry are not inherently governmental functions,” said TDEC President Dennis DuFour. “And should be outsourced to private industry.” TDEC’s performance-based contracts have reduced the client states’ operational costs, improved taxpayer experience and scaled available resources. DuFour added, “The IRS has a concentration of labor risk. If they outsourced to vendors like TDEC from different geographical areas, it would mitigate that risk.”

Learn more about how government agencies can process paper tax returns in an economical, accurate and timely fashion.