Taxpayers, Trends and the Worldwide Web
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Transcript of Taxpayers, Trends and the Worldwide Web
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Taxpayers, Trends, and the World Wide Web
Larry WolfeSenior Vice PresidentIntuit Inc.
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Agenda
Waves of Technology Will Taxpayers Adopt? Roles Taming the Paper Tigers Public/Private Partnership Looking Forward
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The Creation of Empires
Internal Combustion Engine
Semiconductor
Internet
Auto industry Oil industry Fast food industry
Consumer electronics Enterprise software industry PC industry
Electronic Finance Many more to come . . .
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Internet Impact: There are waves…and then there is a tsunami
0
30
60
90
120
‘22 ‘30 ‘38 ‘46 ‘54 ‘62 ‘70 ‘78 ‘86 ‘94 ‘02
Use
rs (M
illio
ns)
Radio TVCable Internet
Source: Morgan Stanley.
Years to reach 50 million users
38 13 10 5
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5Source: Morgan Stanley Equity Research
Insurance & Fin Srvcs
Computer Soft/Hardware
Collectibles
Music/Video
Books
Flowers/Gifts
Consumer Electronics/Appliances
Office Products
General Sporting Goods
Tools/Home Repair
Home Furnishings
Cigars (it’s a 90s thing…)
Internet Opportunities for Various Product and Service Categories
Co
nsu
mer
Co
mfo
rt w
ith
Bu
yin
g O
nlin
eC
on
sum
er C
om
fort
wit
h B
uyi
ng
On
line
Internet Business OpportunityInternet Business Opportunity
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Waves of Technology
InstitutionInstitution Enterprise Computing
Automate the Back Office
CitizenCitizen Personal Computing
Automate the Customer
Connected Computing
Automate the Communication
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InstitutionsBusinesses
The Paper Chase
Consumers
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Phase One: the Computer
Businesses Institutions
Consumers
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Phase Two: the Internet
Businesses Institutions
Consumers
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Electronic Finance of the Future Will Be:
Connected
Interconnected
Delivered via the Net
Interconnecting key partsof the financial picture
Meaning
Meaning
Goal…save time, save money
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Internet Trends
Consolidating Force Search / News / Sports / Books
High Fixed / Low Variable Costs Volume Players Win
Requirements Size (Relative Scale) Speed (Time to Market)
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Will Taxpayers Adopt?
Wave 1: Desktop Software Personal finance Tax preparation Small Business
Wave 2: Web-based Software Credit Card Usage on the Net Financial Data on the Net Financial Activity on the Net
Access and Means
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Roles
Taxpayer Voluntary compliance
Return self prepared Return professionally prepared
Files tax returnElectronic, mail, telephone
Pays any tax dueVia paper or electronically
Technology Shifts:
Paper to PC to Internet
Recent growth of e-file
Paper to e-pay
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Roles
Professional Preparers Gathers data from
taxpayer Prepare tax return
for taxpayer File tax return Provide tax advice Provide support
Software Industry Technology investment &
innovation Tax preparation tools
Gathers data from taxpayer
Calculate, review return Access to tax help and
publications Tools for filing return Provide tax advice Provide support
Technology Shifts: Service Bureaus to desktop to Internet
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Roles
Government Collect revenues for public treasury Develop and oversee tax regulations Audit and enforcement Provide information and services to citizens
Technology Shifts: Paper and Telephone to Electronic Information Services over the Internet
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How Will This Succeed? Partnering.
Citizen
Citizen
BusinessesGovernment
FinancialInstitutions
Technology
The Old Days
The New Days
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Public/Private Partnerships
Government and Industry working together in Public/Private Partnership Cooperation, not competition
Common goals Mutual Commitment
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The Consumer Finance World
Banking Taxes
Mortgages
Investments
Bills
FinancialInformation/News
K
Insurance
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Banking
Mortgages
Investments
Bills
FinancialInformation/News
The Electronic Consumer Finance World
Taxes
Insurance
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The Income Tax Process
Checkbook
Taxpayer
IRS
States
Banks
Tax Preparer
Mutual FundsBrokerage House
Employers
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The Electronic Income Tax Process
TaxpayerIRS
States
Banks
Employers
Mutual FundsBrokerage House
ServerWebTurboTax
Tax Preparer
E-file Server
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Electronic Returns Filed
0
500
1,000
1,500
2,000
TY94 TY95 TY96 TY97 TY98
Retu
rns
(00
0)
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Electronic Returns Filed
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The Small Business World
Small Business States
Customers
Suppliers
Bank
DistributionChannel
U.S. Gov’t
Employees
Accountants
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States
Customers
Suppliers
Bank
DistributionChannel
U.S. Gov’t
Employees
Accountants
The Electronic Small Business World
Small Business
Small Business
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Lower costTaxpayer and government
Real-time information Instant record updates Zero data entry, improved accuracy
Taxpayer and government Taxpayer controls finances easily
Individual or business
Why Interconnected Finance?
Benefit
BenefitBenefitBenefit
Benefit
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Getting to E-File Goals
Eliminate ALL barriers Allow all returns to be e-filed Eliminate all paper requirements Enable electronic payments (debit & credit) Squash the perception of higher audit risk Implement electronic postmarks Simplify ERO signup process
Simplify application process Treat all preparers equally
Be careful about digital signatures
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Getting to E-File Goals
Provide incentives for taxpayers and tax preparers Warehouse electronic payments
Preferably until after April 15 Provide online customer service Reduce audit period for e-filed returns Enable electronic correspondence Allow direct account access and enhanced
status information Don’t speed up paper processing
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Where Is Industry Today?
As a result of innovation and competition, private industry has: 12 million individuals using tax software 200,000+ professionals using tax software Made tax preparation easier and faster Reduced the costs of tax preparation Simplified e-filing Started to make automated tax returns real
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Where Is Government Today?
Technology is enabling development of On-line information services for citizens On-line customer service capabilities
Web-knowledgebaseAccount information
On-line forms and publications Open model for electronic filing A host of internal services
(e.g., audit and compliance)
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Where Should We Be Going?
Public/Private partnerships Industry can and will innovate Government can and should facilitate
End result…..everybody wins Taxpayers, Government, and Industry
Competition results in better productsCompetition results in lower pricesMore returns are e-prepared and e-filed
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Example: Quicken Tax Freedom Project Donated Web-based tax preparation and e-file
services No charge to taxpayer or government
Partnership Recommendations: Public Awareness and Education Campaigns Agencies educating taxpayers about no-charge
preparation and e-file services Reference all providers of services
Public/Private Partnership