An identity-driven solution recoups millions in tax revenue
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Revenue lost from erroneous legal residence filings significantly impacts counties, often eliminating funds for key programs, such as education and public safety.
But by using new identity analytics technology to gain a broader picture of residence or homestead exemption claims, counties can fight erroneous claims and ensure everyone pays their fair share. Some pioneering tax and revenue agencies have recaptured millions of dollars in lost revenue using the technology.
Two examples include Fort Bend County, Texas and Charleston County, S.C. Both used the Homestead Exemption Fraud Detection Solution from LexisNexis Risk Solutions to detect anomalies, errors and erroneous filings in claimed exemptions across jurisdictional boundaries. The technology uses proprietary identity analytics to uncover erroneous filings and suspicious activity by cross-checking customer records against more than 20,000 public records and commercial data sources.
It reviews existing exemptions to ensure compliance with state laws to detect key indicators for illegitimate or erroneous claims, including duplicate exemption filings and family members receiving deductions under a deceased property owner’s name.
Fort Bend County uncovered more than $2.3 million in lost revenue by identifying and preventing 1,194 cases of erroneous — and sometimes fraudulent — tax filings. From a population of approximately 685,000, the LexisNexis Homestead Exemption Fraud Detection Solution identified 11,898 properties as being suspicious. Certified analysts with LexisNexis Risk Solutions worked with Fort Bend Central Appraisal District officials to research the identified homesteads to determine the legitimacy of their exemptions.
Charleston County used the Homestead Exemption Fraud Detection Solution to find more than $2.1 million in new revenue by identifying and reversing over 600 cases of erroneous approvals. The solution, which combined LexisNexis Risk Solutions public records databases with identity analytics technology and the investigative capabilities of Tax Management Associates, Inc., provided an additional layer of protection by helping Charleston County identify people whose circumstances changed after they applied, or who altered their documents and thus legally changed their domicile after they were approved.
Many local governments do not have access to the information technology they need for cross-jurisdictional information sharing or the capability to conduct large-scale data analysis with the data that is available. The cost of homestead exemption errors can add up to millions in lost revenue and result in tax increases for law-abiding residents. If local governments can detect illegitimate claims, they can potentially boost revenue by identifying debtors, rather than raising taxes.
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