The value of recovery Tax recovery analytics provides assistance in identifying improper Federal tax payments
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The value of recovery Tax recovery analytics provides assistance in identifying improper Federal tax payments

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The Improper Payments Elimination and Recovery Act of 2010 mandates that federal agencies eliminate waste, fraud, and abuse of approximately $125 billion annually from federal programs. One issuing......

The Improper Payments Elimination and Recovery Act of 2010 mandates that federal agencies eliminate waste, fraud, and abuse of approximately $125 billion annually from federal programs. One issuing bank of the federal charge card program has engaged Deloitte to provide an analytics-driven approach for the bank to be able to identify and recover prior improper indirect tax payments.

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  • 1. The value of recoveryTax recovery analytics provides assistance inidentifying improper Federal tax payments Abstract taxes that were incurred using the federal charge cards from The Improper Payments Elimination and Recovery Act of issuing banks. The technology-driven solution leverages 2010 mandates that federal agencies eliminate waste, Deloitte’s tax experience, dedicated federal consulting fraud, and abuse of approximately $125 billion annually practice, and federally-secured standard data analytics from federal programs. One issuing bank of the federal capabilities. A specific component of the solution, Deloitte’s charge card program has engaged Deloitte to provide an Federal Technology Center (DFed), offers a secure infrastruc- analytics-driven approach for the bank to be able to identify ture environment dedicated to federal government clients. and recover prior improper indirect tax payments. Advanced analytics are at the heart of the transaction tax recovery solution. Using predictive and forensic analytics, Challenge – Tackling erroneous payments of Deloitte is advising and assisting the issuing bank in its indirect taxes efforts to scrutinize past activities, monitor current behavior, In lean economic times, the federal government has and anticipate potential future problems. Forensic analytics increased its focus on ways to reduce and recover improper facilitate the analysis of large amounts of structured and payments and other cost cutting measures. Improper unstructured data to find potential anomalies such as payments by the U.S. government resulting from errors, improper tax payments. Beyond the capability of traditional inadequate controls, and even fraud totaled nearly $125 auditing techniques, forensic analytics can efficiently test billion in 2010.1 Federal law mandates that the federal virtually all of a population instead of just a sample. agencies reduce and eliminate waste, errors, and fraud in federal programs. Government agencies are working to Results – Processes improvements anticipated to more closely monitor payments and take the necessary speed recovery and help eliminate overpayments steps to detect, prevent, and control overpayments of This first-to-market approach was introduced through federal funds. Erroneous payments of indirect taxes (such a pilot program as part of a three-year engagement. as sales and use tax, gross receipts tax, fuel tax, telecom- Deloitte is now generating the first set of claims for the munications tax, etc.) may qualify as improper payments initial agency participating in the pilot program. Anticipated and are often overlooked by federal agencies. Although benefits include increased recovery value in a shorter the federal government is exempt from state taxation, timeframe and cost savings from the elimination of over- erroneous payments of taxes occur due to complexities of payments. Tax recovery analytics streamlines the claim indirect taxes, point of sale practices and the extraordinarily identification and preparation process and increases the high volume of federal spend. An opportunity exists to potential indirect tax recovery opportunity. The success of potentially recover these funds, and to identify and mitigate the initial pilot was recognized by the U.S. General Services future tax overpayments. Administration, resulting in new meetings with certain of the remaining issuing banks to propose a configurable tax Solution – Transaction tax recovery analytics recovery solution. Pursuant to the terms of a government contract, a large For more information, please contact: issuing bank of the federal charge card program engaged Deloitte to assist in providing tax recovery advisory services Suba Balasubramanian Linda O’Donohue to its federal agency customers. Deloitte was selected Senior Manager Tax Senior Manager because of its multidisciplinary knowledge and experience Deloitte Financial Deloitte Tax LLP in providing an innovative technology-based tax recovery Advisory Services LLP +1 703 251 1924 solution and its familiarity with the federal charge card + 1 214 840 1509 lodonohue@deloitte.com program. As part of the initiative, the Deloitte team is subalasubramanian@deloitte.com currently assisting federal agencies in reclaiming indirect 1 http://paymentaccuracy.gov/This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting,business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for suchprofessional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Beforemaking any decision or taking any action that may affect your business, you should consult a qualified professional advisor.Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for adetailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attestclients under the rules and regulations of public accounting.Copyright © 2012 Deloitte Development LLC. All rights reserved.Member of Deloitte Touche Tohmatsu Limited