Digitize and automate tax return documentation to save costs

Solution Guides

Governments must fully digitize and automate tax documentation to gain efficiencies, reduce risk, and save money.

November 7, 20246 mins

Business challenges

Taxes involve massive volumes of documentation. Handling that volume with accuracy and agility is a challenge. Also, much of the tax return documentation is still in paper form, incurring significant costs. Those costs stem from storage, manual labor, errors, and document handling and retrieval and are elevated due to colossal document volume.

In addition, manual processes are inherently error-prone and slow. With volumes of tax returns coming through the mail from individuals, accountants, and big firms, manually processing those returns is a slow process. Delays in processing tax returns incur the cost of delayed payments.

To combat these high costs, tax documentation in all geographies is an area ripe for full digitization, intelligent information management, and automation.

Impact

Tax documentation is the source of revenue to keep government operations. Due to the massive volume of documentation, the inefficiencies in tax-related documents generate high costs, eroding government revenue. For example, in the U.S., during fiscal year 2023, the Internal Revenue Service (IRS) handled about 271.5 million tax returns. Each year, the IRS receives an estimated 76 million paper tax returns and forms and 125 million pieces of other tax-related documentation. On top of that, there are 1 billion historical documents currently in storage, which costs $40 million per year.

Errors, storage costs, manual labor, and inefficient document handling and retrieval compound costs. Manual processes are inherently error-prone. One source indicates a 21% error rate for paper tax returns versus a 0.5% error rate for electronic returns. With volumes of tax returns coming through the mail from individuals, accountants, and big firms, manually processing those returns is also a slow process. Delays in processing tax returns incur the cost of delayed payments and negative citizen experiences. In 2022, the IRS paid $3.5 billion in refund interest due to processing delays caused by errors, disputes, amended returns, and tax law changes.

Faced with costly consequences, government tax agencies need a better way to handle tax-related documents.

What if you could

Digitize all tax-related documents and records, increase responsiveness, improve accuracy, reduce storage and handling costs, and quickly access what’s needed when it’s needed. With minimal manual processing time and effort, you can streamline document management, fully digitize tax-related documents at scale, and create an efficient tax-related document management system.

You can overcome tax-related document management challenges by digitizing records into data you can organize, access, automate, and cost-effectively store to: